Purchasing real estate is likely to be the biggest and most complex financial transaction a person will make in their life. A trusted real estate professional is a strong advocate who understands the information and emotional support that buyers need throughout the process of finding and acquiring a home. As an expert with local market knowledge, we are prepared to guide buyers through all the practical details and potential obstacles that may occur during the purchase process.
Step 1: How much can I afford?
Your first step in buying a home is to fully understand your finances. It's not as fun as looking at homes, but it's important and necessary to determine how much you can afford.
Step 2: Down payments and PMI
Typically, buyers put down anywhere from 5% to 20% of the purchase price but there are loans available that can be as little as 3% down payment and even some with 0% down. If you make a down payment of less than 20%, you'll have to pay PMI (Private Mortgage Insurance) each month until you build up 20% equity in your home. This is a question you will want to discuss with your lender so you can fully understand your best options.
Step 3: Working with your Lender
Buying that new home can seem overwhelming, but your lender can help. Talk to your lender and find out what you can expect as well as what they will expect from you at ever stage of the process. Being informed is the best way to decrease any stress or obstacles you might encounter in the journey.
Step 4: Finding your Real Estate Professionals
Many people will be involved in the homebuying journey from the Lender you choose to the Realtor® you decide on. Having the right people by your side is important to embark on your journey. People that can help you achieve success and make the journey easier is the goal.
Step 5: Finding the right home
Now that you have been pre-approved for a loan and know how much you can afford and decided on your real estate professional it is time to start looking for that perfect new home. This is the exciting time as you begin narrowing down the areas, amenities and must-have features you want in your new home.
Step 6: Making Your offer
You’ve found that perfect place and now you are ready to make an offer. Your real estate professional will guide you through this process and address any questions or concerns you might have. Realtors® will offer you information on sold properties in the current market similar to the one you are interested in and give you advice on the price and terms you want to offer. Once you have decided on the price and terms your realtor® will determine how to negotiate for you while making sure you stay within your budget. Once all parties have agreed upon the terms your Realtor® will help walk you through the rest of the process along with your Lender to make the journey less stressful and more enjoyable.
Step 7: Finalizing the offer
You’ve done it! Your offer and terms have been accepted and all parties have signed the contract. Now what? Now is the time to stay in contact with your lender and realtor® and provide any documentation that might be required to move the process along smoothly. In your negotiations you will probably have chosen to have an “option period” (which is a time the seller removes the property from the market for you “the buyer” to have inspections completed). Now is the time to contact an TREC licensed inspector and your realtor® will coordinate with you, the inspector and agent for the seller will set the date and time the inspection will take place. Any concerns that arise from the inspection should be addressed by you and your realtor and any other professionals that might be required to dispel any questions about deficiencies or issues discovered by the inspection during the option time.
Always remember communication between your real estate team is essential to make this an exciting and enjoyable experience.
Step 8: Closing the Deal
Success! You’ve found the perfect new property, you’ve secured your loan and now it is time to close the deal. You and your real estate professionals will all meet at the Title Company to sign all documentation that your lender and Title Company will require to transfer the ownership of the property. A photo ID will be required for the notarization of your signatures and the lender will let you know if any funds will be required at closing. Title Company will give you instructions as to how to wire the funds prior to closing if required. Papers signed, keys in hand and your real estate team by your side, success!