FirstTimeHomebuyers

As a real estate professional, I understand that buying a house, whether you’re a first time home buyer or buying your third house, is a daunting process.

Whenever I show houses, I can tell instantly if the buyer likes the house or not. It is amazing viewing a property with someone, and see them light up because they have just found “the one.”

In the real estate world things are always changing. Rules, requirements, and the market are not the same as they were even a day ago. It is so easy for even the seasoned professionals to get confused, so the uneasiness of a prospective buyer is understandable.

My first recommendation, while it may sound easy and like a no-brainer, is to get an amazing real estate agent and loan officer. Both of these key people will make or break the deal for you. These people have to be knowledgeable and willing to answer all your questions, and to make you feel at ease throughout the process. Most people have a horror story when buying or selling a house and it has to do with the agent and lender. Do not let that person be you. Interview agents and lenders to make sure you feel comfortable with them. To most you’re prospective commission, so they just see dollar signs. Make sure this person seems interested in your wants, needs and your budget.

Almost 80% of home searches begin on the Internet. With just a few clicks of the mouse, home buyers can search through hundreds of online listings, view virtual tours, and sort through dozens of photographs and aerial shots of neighborhoods and homes. The internet is a great resource for buyer as it can make them realize what they want in a home or where they want to live; however, most online information is inaccurate and most buyers will get a skewed vision of price points when looking online. It is truly best to just have your realtor set you up on your local MLS (multi-listing service) for your search parameters. You can see everything that is available, and then go see the properties. I have had so many clients searching on Realtor.com, Zillow or Trulia and they find their “dream house.” Then when I look on the MLS, it is pending or maybe even sold. Not only is the client most likely upset, but I think they may become a bit skeptic of the process.

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When viewing houses, I recommend:

  • Bringing a digital camera and begin each series of photos with a close-up of the house number to identify where each group of home photos start and end.

  • Take notes of unusual features, colors and design elements. What are your likes and disklikes?

  • Pay attention to the home’s surroundings. What is next door? Investigate your neighbors. Do you like the location? Is it near a school or the main road?

  • Immediately after leaving, rate each home on a scale of 1 to 10.

  • Do these things instead of bringing your entire family. This way you can show them pictures and talk about your likes and dislikes with them. However, the choice ends up being yours and not someone else’s.

The basic steps for buying a property are:

  • Select a real estate agent

  • Obtain a pre-approval

  • Analyze your needs with your agent

  • Select properties

  • View properties

  • Write an offer (in this market, it’s guaranteed you will be writing more than one)

  • Negotiate terms of offer

  • Finalize purchase agreement

  • Have inspection

  • Apply for your mortgage

  • Lender required appraisal (all deals except cash)

  • Proceed through the underwriting process

  • Obtain clear to close

  • Close on your home!

Most buyers see the mortgage process as daunting and be advised there are a multitude of steps and plenty of paperwork. The mortgage process alone can take anywhere from 30-60 days.

  • Pre-approval: this tentatively approves you a certain loan size pending credit and employment check.

  • Application: a loan officer will gather the rest of your information, like your tax returns and pay stubs.

  • Processing: the loan officer will turn your loan over to their processor. The processor will then verify all the information you have provided to them such as: employment, bank account review and tax review. They will most likely have questions and need more documentation. The quicker you can get the documentation to them, the quicker they will be able to process the loan.

  • Conditional Approval: after all information is given to an underwriter, a conditional approval is issued and the appraisal, title policy and survey are ordered.

  • Final Approval: At this time the conditions, verifications of funds and the appraisal are submitted to the underwriter. The underwriting process can take anywhere from 5-14 business days. Once everything is reviewed by them, they will issue a clear to close. They may also have questions or request any paperwork they need for your file.

  • Closing Date: After the clear to close has been received a closing can occur in 72 hours. Closing dates cannot be set without the clear to close.

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There are a few things that a buyer should absolutely not do when looking to purchase a home:

  • Change jobs

  • Apply for new credit cards

  • Buy a car or a boat

  • File for divorce

  • Make large deposits without copies of checks

  • Transfer any money to a different or new account

  • Take out cash advances

  • Cosign a loan for a family member or friend

  • Make a huge purchase on a credit card

And while it may seem silly to point out, but please make sure to pay all your bills, including rent payments, on time as this will affect your credit report and the possibility of obtaining financing.

Once you find that dream house and go through the mortgage process you will finally get to the closing table.

Key items to bring to close:

  • Cashier’s check made payable to the title company

  • Your drivers license

  • Paid receipt for homeowners insurance

  • And your spouse if you’re both on the loan (yes, it needs to be said)

Buying a house is an exciting time in your life. Don’t be discouraged with the process when searching for your Home Sweet Home.

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The author can be reached at anwohlg2@gmail.com.

Photo Credit: Katherine Lee