If you are a first time home buyer, OR if it's been a long time since you've been through the process, this step by step guide is definitely something you need! I include this list in my buyers packets as a guide and refer to it often.
- Hire a Realtor-You can sit up all night searching site after site on the internet, drive through the neighborhoods you would like to live in looking for signs, check the classifieds in your local paper. OR- you can hire someone to do the searching for you. Make sure it's someone you like and interview them for the job. You want a good fit for you, they'll be in our lives for at least a month. They'll also know the process, the forms, negotiating, and all about protecting your investment.
- Find a good lender. Every Realtor has someone they work with regularly- and it's not just because they like them personally. A good Realtor will use a lender that is consistent and closes on time. Time is always of the essence, and a reliable lender is key in every real estate transaction.
- Find your home and make an offer. Your realtor will do the research to make sure it's priced right, and together you can prepare an offer. Depending on the market- they will give you their best advice on writing an offer that fits your needs and is desirable for the seller. A few things you should consider in your offer:
- Down Payment- Your down payment always depends on your lender and the loan program you decide to use. It can be $0, or it can be up to 20% of the loan.
- Earnest money- this is usually 1% of the amount of your offer. So if the home is $300,000.00, earnest money is $3,000.00. This is essentially a deposit on your home. It gives the sellers consideration and is deposited into an escrow account to be settled when you go to closing.
- Option- The option period is a given amount of time you can purchase to terminate the contract for any reason. That means if you find something out about the property during inspections- you have the ability to negotiate or walk away. Or if you decide that you just no longer want to buy, you have the unrestricted right to leave the contract for any reason. The option period is usually $10.00 per day for up to 10 days.
- Survey- if they have one great! If they don't, this is another point in the contract to negotiate.
- Home warranty- a 1 year home warranty averages between $475.00 and $550.00 and this may be negotiated into the contract.
- Closing Costs- closing costs are paid for at closing and are separate from the down payment. For some loans and different programs there are ways to roll them into the loan or they can be negotiated to be paid for by the sellers.
- Closing date- normal close time is from 30-35 days, but this can be negotiated to fit your needs or the sellers needs.
So that's it. Simple right? This is why you hire a Realtor. They can walk you through the process and smooth out the bumps along the way!
Got a question? I'm here to help!