A Step By Step Look at Home Buying

Some real estate laws and customs differ depending on where you live, but there are many home buying steps that are standard, even though they might not be accomplished in the same order in every location.

These are the 11 steps to buying a home.

Step 1. Have Your Credit/Finances in Order

Your credit reports is a primary factor in determining what interest rate you will receive and how much the banks are willing to loan you toward the purchase of the property, so make sure you check it and ensure there are no issues before starting the property search process Know your financial history before you apply for a mortgage, as errors on credit reports are common and often require a lot of time to clear up.

Step 2. Become Familiar with the Mortgage Industry

Knowledge of the loan process is helpful before talking with a lender. If you need mortgage background information, consult with your realtor who can assist you in the process. Next, find a lender who has the services you need and has a personality that blends with yours.

Step 3. Apply for a Pre-Approval Mortgage

Once your credit/finances are in order, apply for a pre-approved mortgage to establish how much house you can afford? It also helps if you are involved in a bidding war for a property, since the potential buyer who has pre-approval may receive priority consideration from the seller.

Step 4. Determine Your Wants and Needs

Divide a sheet of paper it into three columns. If you have a co-owner, that person also makes a list, but don't share ideas just yet. Below are examples of features to consider:

Column A. List Must-Have Features

• If the house must be located in a specific neighborhood or school district.
• If the house must have 3 bedrooms, a 2 car garage, a large kitchen, a view.
• If there must be no restrictions against a home-based business.
• If the home must be one level, with few or no steps.
• List every feature you feel is a must.

Column B. List Features You Would Like:

• A basement or a deck.
• Whirlpool tubs, walk-in closets.
• A certain type of architecture.
• Single level or two levels
• View of ocean, golf course, marsh
• List all features that are important to you--but that you might be flexible about.

Column C. List Features You Do NOT Want:

• A home located next to a highway or in a congested area.
• Certain types of architecture.
• Homes that need a great deal of work.
• List all features you absolutely will not accept.

Review your list. If your co-owner made a list, compare them to see if your priorities match. If they don't, you will need to compromise, revising your lists so that both of you are happy.

Making a list is a good exercise because it forces you to think about your wants and needs; however, when you actually begin to look at houses, your list may change. Even home buyers with an unlimited budget rarely find the "perfect" home.

Step 5. Select a Qualified Real Estate Agents

Basically, there are many agents, all adhere to the professional standards or code of ethics established by the National Association of Realtors, but here are qualities to consider when you are looking for in an agent.

• Find an agent that you feel comfortable with in their personality, professionalism and ability to serve or assist you in your home buying/selling process.
• Find an agent who has a good web site that provides you with ample educational resources, information about the area, offers services and has MLS search and information on listings of interest to you.
• Find an agent who will offer you prompt professional service
• Find an agent who is knowledgeable and will help you through the real estate process.
• Ask for references you may call to discuss their experience with the agent.
• Make an appointment and interview me, ask me about my marketing tactics, placement in MLS, services offered, commission rate, etc. ???????for my knowledge and experience of the industry and the area and more

Step 6. Start Searching for a Home

As a REALTOR® , there many tools at my disposal to help you through the process. I can help you by searching the multiple listing service (MLS) system to find listings that match your desired criteria, provide you with a Comparative Market Analysis (CMA) report, and provide my knowledge of the Island. When you begin your search, look for two types of homes: ones that seem to match the one you would like to buy and those that are similar to your current home.

Step 7. Handle Pre-Offer Tasks

Deciding whether or not you want to buy a house involves a look at its structure and its features, but there are other areas that are equally important in making your decision.

Step 8. Make an Offer

These are tips that can help you obtain the best deal when it’s time to make an offer on a home. No matter what your strategy is, you should have a very good idea of the home's market value before you make an offer.

Low balling:
Be realistic. Your REALTOR® is obligated to present all offers, but also be aware that a low offer can create problems during negotiations with the seller. Sellers usually react to a low offer in one of several ways: they may consider it a personal insult and reject your offer without making a counter offer or they may consider your offer disingenuous and counter back with the list price.

Being generous:
Come in too high and you may not find the seller's low point.

Helpful Advice from your Agent

One area I can help you is to provide you with enough information and advice to assist you in determining the best price to offer. I can run comparables for you, and will be involved in offer strategies.

Finding Sales Information – Courthouse/Local Tax Collector Web site

Ask the staff to explain how to decipher deeds or other records that indicate sales prices, find out the selling history of properties in the area and often get sketches and facts about a home's structural components.

Asking prices

Advertising gives you a feel for average asking prices, but your focus should be on sales prices. You'll find them recorded as explained above or on multiple listing recaps of sold properties.

Should You Have an Appraisal?

Order an appraisal before making the offer, but make sure the results will not be shared with others (and keep in mind that opinions from different appraisers can vary).

What about tax values?

Tax valuations are not a good measure of a property's market value. Your community might have a general guideline, such as tax value = 80% of market value, but the figures are not usually reliable. Ask your local tax assessor for details about your specific area.

Take a look at a home's tax value, but never assume it matches the market value of the property .

Other factors that affect price

• How long has the house been on the market? If only a short time the sellers might not be too motivated.
• How does the house compare with others for sale in the same neighborhood?
• Is the house in need of repairs or massive updates? Updating items such as insulated windows, plumbing and electrical systems, kitchens, and baths can be costly.
• How much time is left in the roof?
• What about the neighborhood, do you foresee home values climbing, staying the same, or possibly taking a downturn?

Bottom line

Analyze each home's condition and compare it to others on the market, but your final offer will likely involve a good deal of gut instinct. Is it the house for you? If you've been searching for a home for awhile, you will probably know the answer to that question the minute you walk in the door.

Step 9. Arrange for Home Inspections and Other Tests

In some states, home inspections are accomplished before the final purchase contract is signed. In other states, inspections take place after an offer is finalized. No matter when you do them, it's critical to decide which inspections and tests you want to perform.

Talk with your real estate agent or other advisor to find out when inspections should be handled and if additional types of testing are important for your specific area.

Step 10. Avoid and Correct Last Minute Concerns