October 18, 2017
Buying a home can be an overwhelming process. Whether it’s your first home or fifth home, you have a lot at stake and have many decisions to make before signing on the dotted line. There are seven steps for buying a home that include learning how to separate whims from true needs, how to research effectively, choose wisely, finance appropriately, and survive the home buying process with a smile on your face.
Step 1: Establish your Needs and Wants
First, list the necessities – the things you must have in your next home. Then list additional features you want – the things that would be nice to have. Prioritize your list.
Have everyone involved in the home purchase decision create their own list. Once the lists are completed, compare each person’s list. Look for areas where you have agreement and areas of difference. Determine where you can compromise and what features you can and can’t live without, so that everyone is on the same page. Investing time at the beginning of the home buying process to define your needs and wants will result in more peace of mind later on.
Step 2: Determine how much you can afford
Set a budget for yourself and decide how much you are comfortable with and how much you can afford to invest. Be realistic. Most lenders suggest that your payments be no more than 28 percent of your total monthly income. Don’t forget to include taxes and insurance if you plan to escrow.
With a payment range in mind, it’s time to talk to a lender to investigate your financing options and begin the pre-qualifying process.
Step 3: Get pre-qualified or pre-approved by a lender
A lender can let you know what specific loan programs are best for you and help you to understand what it takes to qualify for the loan. By taking a look at your financial situation and looking at your credit history, a lender can give you a good idea of the loan amount in which you qualify for. Many lenders call this process “pre-qualifying the buyer”.
To make certain that you can be approved for a loan, you may want to be “pre-approved.” In the approval process, all of your documentation is completed and submitted to an underwriter often before you find the home you want to purchase. The pre-approval that you will receive is an actual loan commitment from a lender – your guarantee of loan approval.
Ask your lender to explain the differences and to discuss limits and obligations under both the “pre-qualifying” and “pre-approval” process.
Step 4: Find a good real estate agent to help you
Your real estate agent can be your most valuable asset in the home buying process. Their expertise and know-how can help you find a good lender, locate the right home, get your through the negotiating process, and manage the steps from contract to closing.
Get references from friends and family and ask whom they would recommend. Make sure you interview several agents. Ask as many questions as you can up front. Ask about their experience and what they will do to help you find the right home. Ask them to explain the steps in finding and buying a home, and how they will represent you throughout the home finding and buying process. Within a few minutes, you will probably be able to determine if an agent’s style is in line with yours.
Finding a good agent will save you huge amounts of time, effort and frustration.
Step 5: Find a home that meets your needs
Step 6: Make an offer to buy a home
Step 7: Complete the home purchase
Your partnership with your agent is critical at this point in the transaction and good communication is essential to make sure everything progresses as smoothly as possible. Keep in touch with your agent during this stage of the sale. Complete all your tasks in a timely manner. Stay on top of the details, keeping everyone in the loop.
Most importantly, keep focused on the goal of moving and settling in to your new home, and you will survive the home buying process with a smile on your face.
At Berkshire Hathaway HomeServices Hodrick Realty, no matter what you real estate needs are, we strive to make the process as smooth and stress-free as possible.
Our brand stands among only a few organization entrusted to use the storied Berkshire Hathaway name representing strength, integrity, trust and universal respect. As important, Berkshire Hathaway HomeServices Hodrick Realty offers you a wealth of real estate tools to help you buy and sell a home.
Once you are ready to take the next step in selling your home or finding the perfect home, we are here to help and that’s “Good to Know™”!
Founded in 1991, Hodrick Realty is one of the premier full-service real estate firms in north central Pennsylvania. It operates offices in Williamsport, Lock Haven, Lewisburg and Danville, serving the counties of Lycoming, Clinton, Snyder, Sullivan, Union, Northumberland, Montour and Columbia. For additional information, visit www.bhhshodrickrealty.com and like our Facebook page at www.facebook.com/BHHSHodrickRealty.
Are you looking for a new home? You can search online for available HUD homes on www.HUDHomeStore.com. This database allows you to search by state, county or zip code. For additional information on the HUD process visit www.HUD.gov
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