Buying a home is an exciting yet sometimes stressful time. This will most likely be one of the largest investments you'll ever make. As there are many steps in the process, here's a brief overview to guide you onto the right path.
Preparation is the Key to Success
When you begin the process of buying a home be sure to prepare financially. First and foremost, you will need a good credit score. If yours isn't good, do everything you can to increase it by paying off debt, resolving any errors and paying bills on time. In the eyes of a lender, having a stable work history and income will be a great asset. Your mortgage company will look for a certain debt-to-income-ratio depending on what type of mortgage you apply for. Consult with a mortgage lender to prepare a plan for success.
Get Qualified for a Mortgage
Your mortgage loan officer will prepare a "good faith estimate" for you which will state almost all of the costs involved in buying a home. Your lender will have a list of items you'll need to submit to get pre-qualified for a mortgage. This will include copies of your tax returns, your year-to-date paychecks, bank statements and more. You will need a pre-qualification letter to submit with your offer to purchase a home. Your lender will recommend the type of loan they believe is best for you, the price range you are approved for and they should work closely with your real estate agent throughout your home buying process.
Find the Right Real Estate Agent
Find and qualify a local, experienced real estate agent to aide in your search. Be sure your agent is a member of the local multiple listing service (MLS); a service they can use to search homes available for sale in your market. Ask your friends for references, use agent matching sites such as UpNest or Homelight and be certain to interview prospects. It's important to have a good rapport with your agent.
Search For a Home
Most often these days, homebuyers will often search real estate sites such as Zillow or Realtor.com to find homes that meet their criteria. Be sure to let your real estate agent search the MLS as these sites don't always have all the available properties that match your criteria. Key criteria when searching is price, location, type of property (single family or attached home), number of bedrooms and bathrooms, etc. Once you've identified the homes of interest, your agent will set up a "showing" for you to visit each home on the list.
Make an Offer and Negotiate
The next step is working with your agent on an offer for a home. Your agent will prepare a market analysis for you to ensure the home price is in line with the home values of similar homes nearby. This will help to ensure you aren't paying too much. Your agent will present your offer and negotiate it on your behalf until you and the sellers agree on the terms.
Contract to Closing
Your agent and your lender will work with you on the final steps including scheduling a home inspection, scheduling an appraisal and working through any contingencies there may be before the loan is able to be funded.
Finally, the highly anticipated closing day comes. You will go to "closing", sign all of the necessary documents, receive the keys to your new home and begin your move.