Buying a home usually represents your single biggest investment – and debt.
The home buying process is one of the most exciting, and frequently stressful, experiences you’ll ever go through. This holds true whether you’ve bought many homes or you’re looking to buy your first. It’s also true whether you’re in the market for a new primary residence, an investment property, or that perfect vacation getaway. As such, this article outlines important first steps and provides a free, downloadable guide to buying a home.
Today’s real estate market offers more opportunities and risks than ever before. There are a multitude of factors to consider and decisions to make. When buying, it’s crucial to have all the available resources necessary to make a well-informed decision. It’s important to enlist the help of a trusted real estate professional, especially if you aren’t from the area. Good real estate agents provide expert guidance and save you time and money by educating you throughout the process.
Finding and purchasing a home includes the following steps: (More in-depth explanations in the free guide to buying a home. Get it here.)
Be prepared
Buying a home is a big step. Because it’s such a big undertaking, it’s very important to educate and prepare yourself as much as possible. This means clearly determining the reasons you’re buying and what kind of home you’re looking for. It also requires examining your current financial situation and projecting how much you can afford.
After you’ve answered these questions, even tentatively, you’ll be in a better position to research housing and mortgage options. From there, you can create an action plan and timelines for moving forward. Although you can do this yourself, most people benefit from consulting an experienced real estate agent right from the start.
Contact a Real Estate Professional
Buying real estate is a complex matter with many factors to consider. No two homes or transactions are alike. With all the unique opportunities and potential pitfalls of the current market, it’s more important than ever to contact a real estate agent once you’ve decided to buy. They do more than negotiating a contract. They’ll guide you through the property search, financing, negotiation and transaction processes. As such, you should consider their local market knowledge, experience, and track record. (Shameless plug for our agents, all of whom grew up in the Finger Lakes Region and know this area well!)
Help Me Buy A Home
Get pre-approved for a loan
We highly recommend that you get pre-approved for a loan before you start viewing homes.
The pre-approval process involves speaking with a lender and authorizing them to examine your current financial situation and credit history. If all goes well, the lender provides a document detailing the amount you can borrow to buy a home.
You should know two things: How much you CAN qualify for, and how much you WANT to spend. Consider looking online to see what different lenders offer, or contact your local bank or credit union.
Why is getting prequalified so important?
- You’ll know what you are eligible to receive and be able to plan accordingly in your home search.
- As a qualified, motivated buyer you’ll be taken more seriously when you make an offer.
- Lenders can tell you if you qualify for special programs that will help you afford a better home. This is especially great for first-time buyers!
Real estate financing is available from many sources. Your real estate agent can suggest lenders with a history of offering excellent mortgage products and services.
Find “The One”
Simply put, the key to the home search process is knowing what you’re looking for. Among other things, that means distinguishing between “must-haves” and “like-to-haves”. (Define your home preference priorities—check out the Home Search Worksheet on page 23 of the guide to buying a home you already downloaded.)
That said, here are a few recent facts about the search process that might put your experience in perspective:
- 92% of buyers use the internet or mobile apps to search for homes.
- The typical buyer searches for 12 weeks and views 12 homes.
- Experienced buyers and first-time buyers alike know real estate agents are important in the home search process. Our agents know a property is on the market before it is posted online. This means that even though buyers can do their own online research, they’re more likely to be the first to a property if they have a real estate agent working with them.
There are many benefits to starting the search process at a real estate website. You can view many homes and their details, take video tours and access neighborhood info.
However, it’s also important to view homes in person. While the property details may seem similar online, layout, design, workmanship and other aspects are often drastically different in person. Ideally, you should view homes with the help of an experienced real estate professional. They’ll notice things you might miss, provide expert analysis, and act as an impartial sounding board.
Making an offer
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Once you’ve found the home you’d like to buy, it’s time to make an offer. Your agent has access to regionally used, property-specific real estate contracts. You’ll specify various terms of the purchase here. (Think closing and possession dates, your deposit amount, and other conditions in the contract, which your agent will draft on your behalf.)
Be clear about your needs with your real estate agent and don’t be afraid to ask questions about the contract. In addition to drawing up the contract, your agent will be happy to address all of your questions about the offer process.
Subsequently, your agent will present it to the seller and/or the seller’s representative. The seller can accept your offer, reject it, or counter it to initiate the negotiation process. However, so can you if the seller comes back with terms you don’t like!
Negotiations involve many factors specifically relating to different market conditions, homes and sellers. Here’s what NOT to do when negotiating for a home you love!
Secure your financing
Once your offer is accepted, it’s time to return to your chosen lender to finalize your loan details. This means finalizing your down payment, interest rate, regular payment schedule and all other financial conditions associated with the closing.
As the saying goes, ‘let the buyer beware’. Unfortunately, too many buyers suffer negative consequences from not fully understanding their financing decisions. Thus, it’s crucial for you to work with people you trust. In this regard, a good real estate professional can become a true friend for life. (We certainly hope so!)
Close the deal
Key steps to the closing, also referred to as the “escrow” or “settlement”, include:
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- Getting a title search. Your attorney reviews the property’s history of ownership to ensure there are no claims against the title of the property. Lenders also purchase Title Insurance for protection. This is in case there are errors in the records or mistakes in the review process. Owner’s Policies are optional for the buyer but can be beneficial. Discuss with your attorney to determine whether you should purchase an Owner’s Policy for your own protection.
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- Your attorney (yes, required in New York) will be reviewing all title documents and the survey as well.
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- The final walkthrough. You will be given the chance to look at the home one last time to make sure it’s in the same condition as when you signed the sale agreement.
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- The settlement. Typically, on the Closing Date, you’ll meet with your attorney. They will verify and sign all the paperwork required to complete the transaction. The settlement will include paying your closing costs, legal fees, property adjustments, and transfer taxes. At that point, you’ll receive the property title and copies of all documentation pertaining to the purchase.
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- Oh, and one more thing – you’ll get the keys!
Provided courtesy of Realtor.com