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10 Steps to Buying a Home

The 10 Steps to Buying a Home: Realtor’s Advice

Buying a home can be quite overwhelming.  Whether this is your first home purchase or not, there are questions that we have listed below that come up daily that we address with our clients.

Step 1. What’s the First Step to Purchasing a Home?

The first and most important step is to speak with a mortgage professional. They can help you not only understand how much you can afford but also, how much you really want to spend on a monthly payment. They can also go over scenarios of down payment options and what’s the best plan for you to take from a financial perspective. Knowing that an increase in sales price of $10,000 will change your mortgage payment by a certain amount is very helpful when you’re able to spend more, yet you’re thinking of paying less to keep your monthly payment down. This process does not take long at all and we can easily help get you connected with a trusted mortgage professional in North Atlanta. They are a very important piece of this process and we need to make sure you are using someone that is knowledgeable and ultimately, will help you finance and close on your new home.

Step 2. When Should We Meet?

Next Step to purchasing a home: Once you know your numbers from the mortgage professional, then it’s time for us (you and the realtor) to meet! Based on what your approval rating and budget, we’ll take that information and build an awesome home-buying gameplan. Not only do we need to know your budget, but we also need all of the other important criteria like area, property type (single family or townhome/condo), space information and more! We’ll then help set up a home search, help identify properties that would meet your needs and meet to show you them in person.

Step 3. How Long Does it Take to Buy a Home?

Once you have find the right home, made an offer and go officially under contract (all parties agree in writing), then it typically takes 30 days to close on a home. Sometimes we can push that time frame out and sometimes we can shorten it – depending on the situation at hand.

Step 4. What is Earnest Money?

Earnest money is money that you put down as soon as you go under contract. Typically, this is 1% with resale homes. New construction is different and depends on the builder’s requirements and usually more than what is expected in the resale world. This money gets deposited immediately and held in an escrow account. It is then used at closing (upon the direction of your lender to the attorney) and will be used towards your bottom line number due at closing.

Step 5. Should I Buy a New Home or a Resale?

A new home is not necessarily better than a resale. In fact, new homes are averaging more per sq ft than a resale. With a new home, you are the first owners, and everything is brand new. With a resale, you may be the 2nd owner or more. The beauty of the resale home is the previous homeowners have done things to the home and property that may not have been done when they purchased such as blinds, landscaping, outdoor entertainment and fencing. All of those items add up and can become a benefit to you to purchase as a resale vs new. However, we do find there are certain home buyers that need new and sometimes that’s for allergy reasons or other things. So, bottom line, whatever is best for you! We can assist with any new home or existing (resale) home and will always be looking out for your best interest in the home purchase.

Step 6. What Happens if the Home Doesn’t Appraise?

With a resale, you will have an appraisal contingency of anywhere between 21-30 days (whatever is negotiated when you make an offer and go under contract). The lender will need to have the appraisal performed with the report back and delivered to you before your appraisal contingency has expired. If in the event the appraisal came in lower than the sales price, we can go back to the seller and request a reduction in sales price. That is all negotiable as well. The seller may agree or may request that you assist with some of the difference. You have the ability to walk away if you cannot come to an agreement and receive a full refund of your earnest money if you are within your appraisal contingency period.

Step 7. What are Closing Costs?

Your mortgage professional will share with you all the numbers for closing costs. Closing costs are lumped into two categories in their mind which are the fees you pay for the mortgage side and the fees that are paid to set up the escrow accounts (pre-paid taxes and insurance) if you are not putting down 20%. You can still escrow if you put down 20% yet you do not have to. So, when a real estate agent says, “closing costs” the agent is referring to all the fees so make sure that the lender has broken down all of your fees that could be part of your closing. This will help you understand what money you will need to bring to closing above and beyond your down payment and will help us if we want to negotiate that the seller pays some of your closing costs as part of the transaction.

Step 8. How Much Can I Negotiate Off the Price of the House?

That’s a great question! When you use a buyer’s agent to represent you, they will research information on properties that have recently sold. We pull comparable sales as far back as 6 months, yet try to use any we can find within 3 months. The reason we want to pull the most recent sold homes is that the market changes. We have been in an appreciating market for several years now. If the property has just been listed, the chances of getting much off of the price of the house is highly unlikely. That’s where the comparable information is valuable. If we are able to identify that the home is listed for sale too high, we may be able to show the Seller proof of that in the comparables and negotiate accordingly off the price of the home. Each real estate transaction is different and know that when you use a buyer’s agent from our team, you are in great hands.

Step 9. Will the Seller Pay My Closing Costs?

When you make an offer, you are able to request for the seller to contribute an amount of money towards your closing costs. Your lender will need to give you the exact amount of closing costs (which are lender fees as well as the fees to set up taxes and escrows). When you do ask the seller to pay $5,000 as an example, just know that they are looking at the offer as a net amount. Asking for money off the price as well as closing costs may be too much? Depending on what the comparables show, we will help you put together an offer to get as much seller paid closing costs as we think is possible.

Step 10. How Do I Know I’m Making a Good Purchase Decision?

By choosing to work with a Buyer’s Agent and specifically one from our team, rest assured that we have your best interest at heart. There are things to take into consideration that will help with the future value of your home. A few of those are the Location, Schools, Overall floor plan and lot. When we help you purchase a home, we will point out items about the properties that are good for resale. If there are items that we believe could hurt your resale value in the future, we will point those items out as well. We always think Re-sale and want you to make the best financial decision.

 

 

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