If purchasing a home is your dream you’ve got lots of company. The vision is shared by millions of Americans. And if you didn’t know where to start, you’ve come to the right place. The following is a step-by-step guide from dream to reality.
The first part of your interaction with a lender will give you a price range in which you would tentatively qualify based on your annual income. Add that to your down payment, and you will arrive at the purchase price of your home. (For loan perimeters see the article entitled Residential and Commercial Lending.) As you move through the home-buying process, you will have to supply documents that verify your income including paystubs, tax returns and bank account statements, and liabilities such auto loan and credit card balances and monthly payments.
Pick a couple of areas you like
Drive around neighborhoods you would like to live in and write down addresses of houses shown for sale. Most cities have a Multiple Listing Service (MLS) that is accessible by the general public through the Internet. In addition to the asking price, the listing will give you a host of valuable information and, many times, pictures of the property. If you don’t have access to the Internet, or if MLS is not available in your area, a real estate agent can provide listing information.
Choose an agent
Especially first-time homebuyers, but everyone, can benefit from the services of a good real estate agent. Ask friends and family for recommendations. Notice whose name appears most often on the signs in neighborhoods you are interested in. Often realtors focus their efforts and specialize in certain areas, which can be invaluable to homebuyers. Interview a couple of agents to find one you feel will do the best job.
Make a list of wants and needs
This list will give your agent an idea what amenities are most important to you. Then based on purchase price and desired area, together you can decide which ones to focus on.
Take a look around
Once you and your agent have come up with a list of houses that meet your criteria, you will begin the actual house hunting. These walk-throughs also give the realtor a better idea of exactly what you’re looking for. If you don’t happen to find your new home on the first trip together, your agent can preview other properties and select those to show you that will most closely match your specific wants and needs.
Once you’ve pretty much decided on a house, take a second look before making an offer. Put on your can-I-see-myself-living-here glasses and decide if it still works for you.
Make an offer
You make an offer to purchase a house through a contract, which spells out the specifics of the deal. In addition to the purchase price, this document contains such details as what personal property will convey with the real property, closing date, down payment amount, the deadline by which to respond, etc. If the seller accepts your offer, congratulations. What is more likely is that the seller will counter-offer. Where you go from there depends on host of different factors such the seller’s motivation and the local real estate market. Your real estate agent will be an excellent guide through this process.
Work to close the loan
After providing the mortgage broker with a copy of the sales contract, work with the lender to ensure you meet the conditions required for the closing of the loan.
Have an inspection done
You will want to make sure you have an inspection performed by a qualified home inspector. These professionals are trained for find flaws in the construction of the home that may not be obvious to the naked eye, such as electrical or plumbing issues.
Sign the papers
Once the inspection report has come back clean, it’s time to close. During the closing you hand over the down payment and sign documents transferring the property to you, as well as the loan documents. After the title has been recorded, you will receive the keys to your new home. Congratulations!