The Purchase Process
Home Buying 101
Buying a home may seem intimidating, but with some planning, anyone can do it. You don’t even need any cash. The more you know about who the players are and how they work, the easier it is to make your dream come true.
You may not be ready to go out and buy a house tomorrow, it’s good to familiarize yourself with the process first. The big picture looks like this:
- Thinking About Buying A Home:
- Rent vs Buy: are you better off renting? Here are some of the rewards and tradeoffs of homeownership.
- Home Counseling Centers: even if you don’t know the first thing about home buying, there are programs to help you get ready to buy
- Get Your Finances in Order: first, you need to know how much money you can spend on a property. The more you have your finances documented, the easier and faster the mortgage process will be:
- Budget: you need to know how much you are making and how much you are spending each month
- Credit: you need to check your credit report so you have time to correct mistakes in your credit history
- Required Documents: you’ll need to start gathering your tax returns, bank statements and other documents together
- Develop a Plan: think about when you want to buy a home and learn about what you’ll need to do to get ready:
- How Much Can You Afford? figure out how much you can spend on a house, and the reasons behind the numbers
- Down Payments: you don’t need a ton of cash, check out the many ways to buy with little or no down payment
- Closing/Settlement Costs : An overview of possible fees and some ways to help keep them manageable
- Start the Mortgage Application Process: you should have at least a Prequalification, and better yet, a Preapproval, before even talking to an agent or looking at house.
Here is an easy to understand overview of what you need to know about mortgages: - Find an Agent: it’s best to find an agent you trust before looking at houses, they will help you target your search and that way you have representation when you find the home you want to bid for.
- How Agents Work: information to help you find the right agent for you
- Determining Your Specific Needs
- Agent Interview Checklist: a list of questions to help you find a good match
- Find the Perfect Home: everything is lined up, now it’s time to hit the listings and start visiting those Open Houses.
- The Perfect Home Checklist: which features are most important to you and anyone else who will live in the home?
- Comparable Sales: check out recent sales in the neighborhoods you are interested in to see how houses are priced
- Write an Offer: you found a place you love, the next step is to work with your agent to write an offer and negotiate with the seller and seller’s agent.
- If your offer is accepted, a whole bunch of things happen at once. You and your agent need to:
- Complete your Full Mortgage Application for the actual loan
- Arrange for a professional Home Inspection
- Arrange for the home value Appraisal
- Consider a Home Warranty
- Open an Escrow Account
- Select Homeowner’s Insurance
- Select a Title Company
- Set aside the cash for your Closing Costs
- Set a date for the final walk-through
- Make moving arrangements if you plan to move immediately
- Closing & Settlement: you will need to set a date for the final closing of escrow, when you will sign the papers, hand over a big certified check and become new homeowners. First American can help!
- Get the keys, move in, and start enjoying your new home!
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