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When buying a home, it is important to understand the process even if you are enlisting the assistance of a real estate professional. Of course the process starts by speaking with a lender or two and having them "pre-qualify" your purchase. This is done by calculating your monthly debt and income to determine the amount you are qualified to spend for a home.
The second step is to find a real estate agent who is a full-time agent working in the area and price range that you will be searching. The agent should arrange showings for the homes that meet your search criteria. If you find that the agent is only showing you homes that are listed with the agent's company - instruct them that you want to see all the homes that fit your criteria.
Of course, it is not realistic to expect a home to meet all of your criteria, but once you have found a home that you like, it is important to inform the agent of such. Many a buyer loses his first choice by waiting too long to make his offer. If the home is not listed and you are purchasing "by owner" you will want to hire an attorney to prepare your offer.
When making an offer on a property, the agent will advise you of property values for the subject property's neighborhood and any considerations needed for determining your offer. Unless it is a "hot" market, you will want to make an initial offer that is less than the asking price. The agent should advise you on what a reasonable offer would be. Trying to "low-ball" a seller can backfire. Use good judgement.
Once the offer is negotiated it is time to have a home inspection done on the property. The home inspection is designed to uncover latent defects in the property. Do not use the report as a "work list" for the seller. Asking for too many incidental repairs can kill the deal.
At the same time as the home inspection process, you will be also exploring and applying for your financing. If you used a real estate agent, request 2-3 references that you can evaluate or revert back to one of the lenders who performed your initial pre-qualification.
Loan processing requires 2-3 weeks. The lender will order an appraisal for the home, verify your income and credit and prepare the lending package. The lender works with the title company to assure a clear title and once everything is prepared, you will either close at the title company or at a "round table closing" depending upon the state where you reside. Once the transaction is closed, either by title company or round table - you are the owner of a new home!
|Jennifer Mathes, Ph.D.|