8 Steps to Buying A Home

Buying a home is a big decision and there are a lot of criteria to evaluate and weigh in finding the right home for you.  Read below for 8 Steps to buying a home.

1.  Decide to buy

Although  there are many  good reasons for you to buy a home, the potential for wealth building  ranks among the top  of the list. We call home ownership the best  accidental  investment most people ever make. However, when it is done right (and if the economy cooperates), home ownership becomes an intentional investment that  lays  the foundation for a life of financial security and personal  choice.  There are solid financial reasons to support your decision to  buy a home, and, among these, equity buildup, value appreciation, and  tax  benefits stand out.

Base your decision to buy on facts, not fears.

  1. If you are paying rent, you very likely can afford to buy
  2. There  is never a  wrong time to buy the right home. All you need to do in the  short run  is find a good buy and make sure you have the financial  ability to hold  it for the long run
  3. The lack of a substantial down payment doesn’t prevent you from making your first home purchase
  4. A less-than-perfect credit score won’t necessarily stop you from buying a home
  5. The best way to get closer to buying your ultimate dream home is to buy your first home now
  6. Buying a home doesn’t have to be complicated- there are many professionals who will help you along the way

2. Hire your agent

The  typical real estate  transaction involves at least two dozen separate  individuals:  insurance assessors, mortgage brokers and underwriters,  inspectors,  attorneys, appraisers, escrow officers, buyer’s agents, seller’s  agents,  bankers, title researchers, and a number of other individuals  whose  actions and decisions have to be orchestrated in order to perform  in  harmony and get a home sale closed. It is the responsibility of your  real estate agent to expertly coordinate all the professionals involved  in your home purchase and to act as the advocate for you and your  interests throughout.

Seven main roles of your real estate agent

  1. Educates you about your market.
  2. Analyzes your wants and needs.
  3. Guides you to homes that fit your criteria.
  4. Coordinates the work of other needed professionals.
  5. Negotiates on your behalf.
  6. Checks and double-checks paperwork and deadlines.
  7. Solves any problems that may arise.

3. Secure financing

While  you may find the  thought of home ownership thrilling, the thought of  taking on a  mortgage may be downright chilling. Many first-time buyers  start out  confused about the process or nervous about making such a  large  financial commitment.

From start to finish, you will follow a six-step, easy-to-understand  process to securing the financing for your first home.

Six steps to Financing a Home

  1. Choose a loan officer (or mortgage specialist).
  2. Make a loan application and get preapproved.
  3. Determine what you want to pay and select a loan option.
  4. Submit to the lender an accepted purchase offer contract.
  5. Get an appraisal and title commitment.
  6. Obtain funding at closing.

4. Find your home

You  may think that  shopping for homes starts with jumping in the car and  driving all over  town. And it’s true that hopping in the car to go look  is probably  the most exciting part of the home-buying process. However,  driving  around is fun for only so long. If weeks go by without finding  what  you’re looking for, the fun can fade pretty fast. That’s why we  say  that looking for your home begins with carefully assessing your  values, wants, and needs, both for the short and long terms. Check out our page on this website about creating your home wish list.

Questions to ask yourself

  1. What do I want my home to be close to?
  2. How much space do I need and why?
  3. Which is more critical: location or size?
  4. Would I be interested in a fixer-upper?
  5. How important is home value appreciation?
  6. Is neighborhood stability and priority?
  7. Would I be interested in a condo?
  8. Would I be interested in new home construction?
  9. What features and amenities do I want? Which do I really need?

5. Make an offer

Once you have selected a home that you feel will fit your needs the next step will be to write an offer.   This process needs to be approached with rationality and a realistic perspective regarding the market. The  three basic components of an offer are price, terms,  and contingencies.

Price- The right price  to offer must fairly reflect the true market value of the home you want to buy. Your Realtor’s market research will guide this  decision.

Terms-  The other financial and timing factors that will be included in the offer. Terms fall under six basic categories in a real estate offer:

  1. Schedule- a schedule of events that has to happen before closing.
  2. Conveyances- the items that stay with the house when the sellers leave.
  3. Commission- the  real estate commission or fee, for both the agent who works with  the  seller and the agent who works with the buyer.
  4. Closing  costs-  it’s standard for buyers to pay their closing costs, but if you  want  to roll the costs into the loan, you need to write that into the   contract.
  5. Home warranty- this covers repairs or replacement of appliances and major systems.  You may ask the seller to pay for this.
  6. Earnest  money deposit-  this protects the sellers from the possibility of your  unexpectedly  pulling of the deal and makes a statement about the  seriousness of your  offer.

6. Perform due diligence

Unlike  most major  purchases, once you buy a home, you can’t return it if  something  breaks or doesn’t quite work like it’s supposed to. That’s  why  home owner’s insurance and property inspections are so important.

A home owner’s insurance policy protects you in two ways:

  1. Against loss or damage to the property itself
  2. Liability in case someone sustains an injury while on your property

The property inspection exposes the underlying issues a home might hide, so you know exactly what you’re getting into before you sign your closing papers.

  • Your major concern is structural damage.
  • Don’t sweat the small stuff.  Things that are easily fixed can be overlooked.
  • If  you have a big problem show up in your inspection report,  you should  bring in a specialist. If the worst-case scenario turns out  to be true,  you might want to continue your home search.

7. Close

The  final stage of the  home buying process is the lender’s confirmation of  the home’s  value and legal statue, and your continued  credit-worthiness. This  entails a survey, appraisal, title search, and  a final check of your  credit and finance.

You just have a few preclosing responsibilities:

  1. Stay in control of your finances. Don’t run up the balances on credit cards or make any new purchases.
  2. Return all phone calls and paperwork promptly.
  3. Communicate with your agent at least once a week.
  4. Several days before closing, confirm with your agent that all your documentation is in place and in order.
  5. Obtain certified funds for closing.
  6. Conduct a final walk-through.

On closing day, with the  guidance of a settlement agent and your agent,  you’ll sign documents  that do the following:

  1. Finalize your mortgage.
  2. Pay the seller.
  3. Pay your closing costs.
  4. Transfer the title from the seller to you.
  5. Make arrangements to legally record the transaction as a public record.

As  long as you have clear  expectations and follow directions, closing  should be a momentous  conclusion to your home-searching process and  commencement of your  home-owning experience.

8. Protect your investment

Throughout  the course of  your home-buying experience, you’ve probably spent a lot  of time with  your Realtor and you’ve gotten to know each  other fairly  well. There’s no reason to throw all that trust and  rapport out the  window just because the deal has closed. In fact, if they are like us they want you to keep in touch!

Even after you close on your house, your Realtor can still help you:

  1. Find contractors to help with home maintenance or remodeling.
  2. Help your friends buy or sell homes.
  3. Keep track of your home’s current market value and send you useful reports.

Attention to your home’s maintenance needs is essential to protecting the long-term value of your investment.

Home maintenance falls into two categories:

  1. Keeping it clean: Perform routine maintenance on your home’s systems,   depending on their age and style.
  2. Keeping an eye on it: Watch for signs of leaks, damage, and wear. Fixing small problems early can save you big money later.

 
We are experienced Sacramento Real Estate Attorneys and Sacramento Realtors. We are a unique and powerful combination and can help you buy Sacramento Real Estate homes or sell Sacramento Real Estate homes with proven results, legal advice and the strategy needed to give you the results you want. Contact us today by clicking HERE or by calling 916-378-5760. We look forward to helping you with all of your Sacramento real estate needs.