The correct steps to take before buying a home.
When making life-changing decisions like buying a home, There has to be proper research and due diligence to achieve optimal results and favorable outcomes. We’ve ransacked our experience portfolio and have compiled a list of 10 steps if done correctly will improve not just your ability to get your dream home but also acquire the most favorable terms.
Step 1: Evaluate your Finances
Long before researching, walking potential homes, and reaching out to real estate professionals, there needs to be a serious audit of your finances. Inquiring about your credit reports should be the very first step. Understanding your financial habits and credit scores will provide you insights on how to manage your money, what creditors to pay off, and what needs to be fixed on your credit to improve your score. These are critical for the loan approval process. Your credit report and credit scores determine if your loan is approved by the lender and at what rates and terms. Controlling this measure at the beginning of the process gives you enough time to take corrective actions to fix your credit and pay down debt.
Step 2: Always start with the money
We see it all the time; a customer gets inspired to acquire a home and starts the process by walking model homes and contacting realtors. They build this vision and dream of how it would feel to own a bigger space they can call their own. They might even go as far as finding the home they dreamt of and started the negotiation process. That is the worst way to find a home. Buying a home is an emotional process, and the last thing you want to do is build up anticipation on the idea of the house before speaking with a lender. A much better option would be to research and learn about the loan processes, then reach out to a lender. We recommend working with a mortgage broker as opposed to just any lender because of their ability to analyze several lenders at once for the most favorable terms for your mortgage loan.
Step 3: Get a Mortgage Pre-approval
Before starting to look for a home, you need to know how much home you can afford. Talk to a lender and get a pre-approved letter for a loan. With that letter, you’ll know how much you can qualify for and allow you to plan better for what you can afford. Having a Pre-approval letter makes the real estate agent you choose to work with taking your loan more serious. It also makes your offer more credible to the seller.
Step 4: Decide on the Right Real Estate Agent
With how important and crucial this decision is, you need to have someone experienced and knowledgeable in this field as your partner. Real estate agents can help you find a home that might not be accessible to you. They provide you with additional information and present you with a wide range of offers, that is fitting for your goals. We recommend you interview no less than three real estate agent to see which better suits your personality and understands our goals.
Step 5: Find out your Needs and Wants
Now that you know how much of a house you can afford, and that you have found the right partner to help you find your dream home, it’s time to determine what you want and what you need. An excellent real estate agent should help you with this process. They conduct a fact-finding meeting to determine what you want in your new home and where you want to be located. We find that this meeting helps in really solidify a good picture of what you want and should set expectations of what to expect as it relates to budget.
Step 6: Search for your dream home
Finally, it’s time to look for your home. There are plenty of choices, but with your needs and wants sorted out, it should help focus your efforts towards a more specific range. Your agent might start sending you listings on possible house options, and you should also look for yourself. Check “House for Sale” magazines, or read classified ads in your local newspaper. You might surf the internet, or even drive around your neighborhood and look for homes for sale. Here’s a tip: Make notes for homes that you may select, and compile it. Take pictures, ask around for information, investigate the neighborhood, and also, find out why the house is for sale. It is also essential to determine the condition of the home utilities.
Step 7: Make an Offer
With the help of your real estate agent, arrange an offer that's based on the worth of comparable houses in a neighborhood. Base your offer on the home value, and find out what comes with the house, may it be furniture, appliances, easements, or amenities. Also, talk to your real estate agent about seller disclosures. These will help you to decide on how much you are going to offer and how much you want the offer. When you and the seller have agreed about the price, the property then goes into escrow, which will allow for the rest of the steps to be completed in the home buying process and close.
Step 8: Have the House Inspected
Your realtor will typically help you to arrange a house inspection for any forms of structural damage or parts of the house that may need touch-ups or fixing. Once you receive the analysis of the inspection, you and the seller can then agree on who would fix the damages before officially closing the sale.
Step 9: Dealing with Eleventh-hour Problems
Before the settlement or the closing day, problems may arise. That is why it is essential to check the progress and the update on the home buying process and attend to the problem as soon as possible. When having your home appraised, it is also essential to be knowledgeable of the available possibilities, for when instances like having to back out of the deal are necessary, without losing your money.
Step 10: Settlement
The home buying process is finally coming to an end. At this step, you will be dealing with insurance and title searches, and having a final walkthrough of your new home to confirm that it is in the same condition as you had expected it to be.
If you are searching for your dream home and planning on buying, we at Vibrant Mortgage Group are here to help guide you through the mortgage process and help you acquire your dream home.