The 9 Steps to Home Ownership

Step - 1 Make the Decision to Buy

It seems obvious, but it's good to note that the first step to buying a home is making the decision to buy. Consider the reasons you want a new home and write them down. Determine how long you want to live in the new home - does buying still make good financial sense? Can you afford a home that will meet your list of requirements? A good rule of thumb is your mortgage payment should not exceed 1/3 of your net monthly income.

Step 2 - Seek Professional Guidance

I recommend to meet with a professional to go over the reasons you want to buy a home and your plans for the future. We'll talk about factors liable to affect the market today and tomorrow, as well as how you would like your home and neighborhood to grow with you.

At this time, I will also recommend several local lenders that can do a good job.  You can talk with each of them and determine which feels right for you.  Getting pre-qualified for a mortgage loan is one of the first steps and is a very important step in the process. Pre-qualification is a written statement from a loan officer indicating his or her opinion that you will be approved for a mortgage loan up to a certain amount. The fact that you are pre-qualified will help us when we are negotiating the deal.  We generally attach a copy of your pre-qualification letter to the offer to assure the sellers that you are qualified to buy their home.

Step 3 - Begin the Hunt

After our initial meeting, I'll search all my resources for homes on the market that fit your criteria. I'll preview these homes if time permits and when possible to eliminate the duds. Then, I'll schedule appointments to tour the homes with you at times convenient to you.

As we tour homes, I'll point out positive features and negative features. I'll ask you to tell me what you like and what you don't like. You'll probably amend your "wish list" as we tour homes.  Some things will become more important and others less important. With this new information, I'll refine our search criteria to narrow in on the home of your dreams.

Step 4 - Know the Market

My knowledge of the local market is an essential factor in the home search. I'll let you know when the market in a particular neighborhood is "hot" and requires immediate action or when the market is "cool" and allows for thoughtful consideration.

As we tour homes, I'll let you know when the asking price has negotiating room and when the home is "priced to sell". My unique market knowledge will keep you a step ahead of the "home hunting competition".

In a "seller's market". It is not unusual to see multiple offers on a property, full-price offers and even above-price offers surface at times. On the flip side, during a "buyer's market" there are more homes for sale than buyers. This gives us more negotiating room as homes are taking longer to sell.

Step 5 - Find Your Dream House

I'm confident we'll find your dream home. When we do, I'll put together the purchase offer tailored for your needs including appropriate contingencies (such as obtaining financing, favorable home inspection, clear title, etc.).

The offer is normally presented with "earnest money". This "earnest money" is to show a home seller your sincerity in buying their home.  It is typically held in the listing company's trust account.  A check for this amount is then taken to closing and given to the closing attorney.  It is applied toward any monies that the buyer may need for closing costs. Once the seller accepts the offer, generally closing is held 30 - 45 days from the offer date (generally dependent on the turn around time of your mortgage financing).  Closings can be done in less than 30 days as well as some require longer due to a variety of issues. It is necessary to communicate with your lender to be certain that they can meet your expected closing date before obligating a date.  Penalties can be applied at closing if you are not able to close at the time stated on the offer and contract so be clear on how the contract reads pertaining to the closing.

Step 6 - Negotiate the Deal

It is not uncommon to receive a counter offer when the initial purchase offer is submitted. Don't let this discourage you. We will discuss the counter offer and decide whether or not to accept the counter offer, submit our own counter offer, or reject the counter offer and move on.

Market conditions will play a role in how aggressively we negotiate the deal. We will also work within your limits. Emotions can lead to buyer's remorse. It is better to set limits prior to negotiating an offer and stick to these limits.  This is why creating a plan in the beginning is so important.  It allows you to stay focused and not make quick decisions that don't fit your plan.

Step 7 - Get a Loan

Most likely you have already met with a lender prior to making an offer on a home.  At that meeting, the lender most likely went over the process, advised you of the items they will need to process your mortgage loan, as well as gave you a price range to search for a home.  Throughout the process, you will be working with your mortgage lender to provide any documentation they need for the loan.  Since you pre-qualified for the loan before starting your home search, you will be that much closer to the end. I'll gather the necessary property information your lender will need for close the loan as well as work closely with them to be sure we are ready to close on the date specified. 

Step 8 - Close the Deal

You will receive a "Good Faith Estimate" of closing costs at the time the loan application is submitted to the lender. The estimate is based upon the expenses that are generally found in each specific area so they may vary and may not include all the closing costs. I will be glad to review the "Good Faith Estimate," answering questions and highlighting missing costs and estimates I believe to be low.  

Closings are held at attorney offices in our market with the buyer, the buyer agent, the seller's agent, and sometimes the lender being present. Sellers generally do not attend unless they are the builder of new construction.  Once docs have been signed, money has been received by the closing attorney, and the lender (if one is getting a mortgage) has approved everything, the closing attorney records the deed and deed of trust at the court house. This is the final step which allows the property to become yours! 

Step 9 - Move In

Congratulations! You're a new home owner!  Moving into your new house will be an exciting time. To help prevent overlooking anything, I have put together a checklist to help you remember the numerous details that will make your moving day a pleasure.