Creating your home wish list
Before the home search begins, your real estate agent will want to know as much as possible about the features and amenities you desire. To help your agent better serve you, analyze what you want and what you need in a home's features and amenities.
Age: Do you prefer historic properties, or newer ones?
Style: Do you have a special preference for ranches, bungalows, or another style of construction?
Bedrooms: How many?
Bathrooms: How many? Are they updated?
Living and Dining Areas: A traditional, formal layout, or a more open, contemporary plan?
Stories: How many?
Square feet: How much space?
Ceilings: How high?
Kitchen: How big? Recently updated? Open to other living areas?
Storage: Big closets, a shed, an extra-large garage?
Parking: A garage or carport? Room for how many cars?
Extras: Attic or basement?
Patio, deck, or porch
Eight steps to buying your home
1. Decide to buy.
Although there are many good reasons for you to buy a home, wealth building ranks among the top of the list. If you are paying rent, you very likely can afford to buy. Buying a home doesn't have to be complicated - there are many professionals who will help you along the way
2. Hire your agent.
The typical real estate transaction involves at least two dozen separate individuals- mortgage brokers, underwriters, inspectors, appraisers, escrow officers, seller's agents, title researchers, just to name a few. The actions and decisions have to be orchestrated in order to perform in harmony and get a home sale closed. It is the responsibility of your real estate agent to expertly coordinate all the professionals involved in your home purchase and to act as the advocate for you and your interests throughout.
3. Secure financing.
While you may find the thought of home ownership thrilling, the thought of taking on a mortgage may be downright chilling. Follow a process to securing the financing for your first home.
Choose a loan officer (or mortgage specialist).
Make a loan application and get preapproved.
Determine what you want to pay and select a loan option.
4. Find your home.
You may think that shopping for homes starts with jumping in the car and driving all over town. And it's true that hopping in the car to go look is probably the most exciting part of the home-buying process. However, driving around is fun for only so long-if weeks go by without finding what you're looking for, the fun can fade pretty fast. That's why we say that looking for your home begins with carefully assessing your values, wants, and needs, both for the short and long term.
5. Make an offer.
When searching for your dream home, you were just that-a dreamer. Now that you're writing an offer, you need to be a businessperson. You need to approach this process with a cool head and a realistic perspective of your market. The three basic components of an offer are price, terms, and contingencies
6. Perform due diligence.
Unlike most major purchases, once you buy a home, you can't return it if something breaks or doesn't quite work like it's supposed to. That's why property inspections are so important. Your major concern is structural damage.
Don't sweat the small stuff. Things that are easily fixed can be overlooked. If you have a big problem show up in your inspection report, you should bring in a specialist. If the worst-case scenario turns out to be true, you might want to walk away from the purchase.
The final stage of the home buying process is the lender's confirmation of the home's value and legal statue, and your continued credit-worthiness. This entails a survey, appraisal, title search, and a final check of your credit and finance. Your agent will keep you posted on how each if progressing, but your work is pretty much done.
You just have a few pre-closing responsibilities:
-Stay in control of your finances.
-Return all phone calls and paperwork promptly.
-Communicate with your agent at least once a week.
-Several days before closing, confirm with your agent that all your documentation is in place and in order.
-Obtain certified funds for closing.
-Conduct a final walk-through.
8. Protect your investment.
Throughout the course of your home-buying experience, you've probably spent a lot of time with your real estate agent and you've gotten to know each other fairly well. There's no reason to throw all that trust and rapport out the window just because the deal has closed. In fact, your agent wants you to keep in touch. Even after you close on your house, you agent can still help you:
Help your friends find homes.
Keep track of your home's current market value.
Attention to you home's maintenance needs is essential to protecting the long-term value of your investment.Home maintenance falls into two categories:
Keeping it clean: Perform routine maintenance on your home's systems, depending on their age and style.
Keeping an eye on it: Watch for signs of leaks, damage, and wear. Fixing small problems early can save you big money later.
Deciding how much house you can afford
Your lender decides what you can borrow but you decide what you can afford. Deciding how much you can afford should involve some careful attention to how your financial profile will change in the upcoming years. In the long run, your own peace of mind and security will matter most.
Lenders are careful, but they make qualification decisions based on averages and formulas. They won't understand the nuances of your lifestyle and spending patterns quite as well as you do. So, leave a little room for the unexpected - from furnishings, to landscaping, to repairs.
Historically, banks use a ratio called 28/36 to decide how much borrowers could borrow. An approved housing payment couldn't be more than 28 percent of the buyer's gross monthly income, and his or her total debt load, including car payments, student loans, and credit card payments, couldn't be more than 36 percent. As home prices have risen, some lenders have responded by stretching these ratios to as high as 50 percent. No matter how expensive your market though, we urge you to think carefully before stretching your budget quite so much.