How to buy a house
Buying a home is one of the biggest financial commitments you'll ever make and a lot of homebuyers are unsure of the process. So I thought it would take a few moments and go over the basic steps on how to buy a house. Doesn't matter if you're a first-time homebuyer or someone who's bought several homes, hopefully this will help to show you the process once again.
First thing is to choose a realtor. I know what you're thinking here he goes pitching himself, true to a certain extent but not really. As a licensed real estate agent I feel I bring a lot of value to the table when it comes to helping a buyer purchase a home. You can look independently all you want and you are privy to all types of information with the way the Internet is set up now. The one thing you can't get is the experience and understanding that I bring to the table to help you organize everything and purchase a house. When looking for a realtor interview several. All of us are different and all of us bring different things to the table. Choose someone that you feel will best represent you, by being honest with you in providing you all the information you're going to need.
After you find an agent you want to get a preapproval letter. Meet with a loan officer or lending institution and get prequalified for a home mortgage. The reason you want to do this ahead of time before you start physically looking at homes is, it reaffirms where you are financially and allows you to know how much home you're qualified to purchase. More importantly by knowing where you want to be with your house payments you know about what house price you going to qualify for. The less you want to do is be house poor and purchase at the very top of your approval.
One sees first two items are in place that you want to sit down with your realtor and talk about refining your search and what you're looking for. Expect this to change over time because I found that when homebuyer start looking at houses they start to realize that some of the things they thought were important at one point are no longer important. And other things they never even considered now take a front seat and are very important when considering buying a home. You can let your agent know what areas you want to live, size and style of home, amount of square footage and all the other amenities that are important to you as a home buyer. Taking time for this step will make a difference when you're looking at properties and keep you from looking at homes that are going to work for you and focusing on houses that will work for you.
Once everything is set up now it's time to go out and start looking at homes. I always suggest to my buyers that we look at a minimum of five homes every time we go out searching. This will give you contrast of the marketplace and allow you to see values in different homes and what people are asking pricewise. It also helps you to weed out houses faster so that you don't focus on homes that are going to work for you. At the end of that first day of looking at homes. I will often say to my buyers if you had to buy one of the five homes today which one would it be? This helps you discard the houses that are good to work so the next time that you go out and look at another five homes, you can compare those against the best one from the first time that you went out looking. This will help keep you focused and on task when looking at these different homes. If you don't have a way of weeding properties out after about 15 most buyers think they all start to look alike without a system. Some people will look at 50 homes some people will look at just one there's no right answer. Everyone is different so when you walk into the house that is the right home for you you will know it.
So now you've chosen the house it you want to purchase the next step would be to make an offer. A lot of things go into making an offer in the more that your real estate agent knows a Q and what you're looking for the better they will be able to serve you. Some of the things I do for a buyer before we write a purchase agreement is to pull comps of the area that have sold over the last three or four months. This will help you to see exactly what's going on in that area and that neighborhood and will help you to figure out what type of offer you would like to make on that home.
Negotiating the purchase agreement takes time. There is no set time period for this some people are able to negotiate a purchase agreement in a couple of hours. Other people you can take weeks. You have to be patient and allow the process to work. Once you're able to come to a reasonable agreement between parties you have a signed purchase agreement. It's important to remember that everything in a purchase agreement is negotiable. This price is always important to sellers but there are other things are can be equally as important. Maybe they're relocating and have to close by a certain date or they can't pay seller paid closing costs. Whatever the issues are this is when you work through everything.
Once you've gotten to the point where you have an accepted purchase agreement the next step would be to have a home inspection. This is something as a buyer that you're going to definitely want to do. Not only will the inspector show you potential problems or risks with a home that you're buying they also will show you how the home functions. They will share with you where the gas line and waterline shutoffs are. They will also show you general maintenance of the home from an annual perspective as well as all the other things that make up the use and enjoyment of your house. You have to be careful who you hire for this task. You do not have to be a licensed inspector in the state of Minnesota so anyone can claim to be a home inspector. Look to your real estate agent to give you some names of inspectors that they've worked with in the past. You're looking to work with someone who has a background in structural engineering, framing and building or the very least have been doing home inspections for a very long time.
After all of the financing has been worked out with your loan officer and loan company and your moving closer to your closing you go to want to do a final walk-through. This final walk-through could be nothing more than a formality but at the same time can play a very important role in this process. What you typically looking for here is if there was anything in the contract that stated that the seller would be doing some work to be completed before closing, here's your chance to make sure that all of the work has been done and that they have given you all of the proper paperwork. Plus you want to see that they're actually making an effort to move out of the house so when you show up at closing and you hand over your money and sign the paperwork you get your keys get to move in. Some people will do a final walk-through the morning of the closing. I prefer to do it 24 to 48 hours before closing. That way if any last-minute problems arise you have plenty of time to resolve them before closing.
One of the last things to do is attend the closing. Lotta buyers want to understand how day works so here are the basics. Your closing agent that works for the title company of your choice along with your real estate agent will attend closing with you. The seller will have their agent and their title people there as well representing them. Each side will be signing paperwork at the same time to finish up all the closing paperwork and documents. This process typically takes about an hour to complete and is held at the buyers title company. You was a buyer will need to bring your drivers license and any money that you need to put down that day. After you sign over paperwork the home is now yours.
All that's left now is to move into your new home! Sounds pretty silly to even mention this but it's worth noting in a couple of situations. Most purchase agreements the buyer and seller agree that the buyer takes possession of the home immediately after closing. But if you're purchasing a foreclosure this is not always the case. You want to know as a buyer that the banks typically will not allow you to take the keys and take possession of the home and moved in and tell they've reached the term at funding. What that means is that after the closing is done all of the money and paperwork including the HUD is sent back to the bank. The bank reviews everything to make sure that all of the items have been taken care of as per instruction and that the dollar amount and all the other stuff match. At that point they will say to the listing agent were satisfied give the keys to the buyer can now move in and take possession of the home. This can sometimes take up to three business days after closing. So it's important to strategize with your buyers agent beforehand to try to minimize this timeframe and actually get into the house the day of the closing. For more information on that please watch the video.
Thank you for taking the time to read this blog watch the video for more detailed information and leave a comment I'd love to know what you think.