Styer Real Estate agents take pride in patiently guiding our clients through each step of the buying process. For most of us, a home is the most expensive thing we’ll ever buy, and the process can be long and complicated, so it is of the utmost importance to have a trusted local REALTORⓇ to guide you through the process.
1. Hire the Best REALTORⓇ You Can Find
Styer Real Estate agents take pride in patiently guiding our clients through each step of the buying process. We know that this is one of the biggest purchases most people make in their lifetime, and we don’t take our responsibilities lightly. We can provide you with meaningful resources and contacts, like mortgage lenders, insurance companies, credit repair programs, inspection companies, contractors, and local housing authorities. Our knowledge of the home buying process, legal contracts, negotiating skills, and familiarity with the area you want to live in are extremely valuable. And best of all, it doesn’t cost you anything to use a REALTORⓇ – they’re compensated from the commission paid by the seller of the house. Click here to find an agent ready to serve you!
2. Meet with a local mortgage lender
Before you start looking for a home, you will need to know how much you can actually spend, and the best way to do that is to get prequalified for a mortgage by providing a lender with general income and debt information. To get pre-approved for a mortgage, you will need to provide more in depth financials including W-2 statements, paycheck stubs, bank account statements, etc. Your credit will be one of the key factors in your approval, and it will help determine your interest rate and possibly the loan terms, so check your credit report BEFORE you begin the homebuying process and review for accuracy! We have a lender in our office that is here to assist you with any questions you may have.
3. How much money do you have, and how much do you want to spend?
In addition to saving for a down payment, you’ll need to budget for the money required to close your mortgage, which can be significant. Closing costs generally run between 5% and 6% of your loan amount. You can shop around and compare prices for certain closing expenses, such as homeowners insurance, home inspections, and title searches. Once you’ve saved for your down payment and budgeted for closing costs, you should also set aside a buffer to pay for items like furnishings, appliances, fixtures, paint, and any mechanical improvements that may come up in the first couple of years. There are lots of mortgage options out there, each with its own combination of pros and cons:
*Conventional mortgages conform to standards set by the government-sponsored entities Fannie Mae and Freddie Mac and require as little as 3% down.
*FHA loans are insured by the Federal Housing Administration and permit down payments as low as 3.5%.
*VA loans are guaranteed by the Department of Veterans Affairs and sometimes require no down payment at all.
*USDA loans are guaranteed by the Department of Agriculture and require no down payment at all.
Use the loan our calculator to see what your monthly payments could look like.
4. Get educated on the areas you are interested
Before you start looking for a home, you should study the areas you are interested in by reviewing maps, touring neighborhoods, researching schools, and determining the proximity to work. Look at local safety and crime statistics. Map the nearest hospital, pharmacy, grocery store, and other amenities you’ll use. Drive through the neighborhood on various days and at different times to check out traffic, noise, and activity levels. The desirability and resale value of your home-to-be depend more on location than any other single factor. Your Styer Real Estate agent can help with research on home sales in the area, current housing inventory, and what the market trends are, but it is up to you to decide where you want to be. Below are some links to websites that can help!
5. Know What You’re Shopping For
Once you know where you want to be, it’s time to find out what is most important to you. List the features that you want in a home before you start shopping, and share this list with your Styer Real Estate agent. Look for homes that meet your needs first, and fulfill your desires second. Shop only for homes in your price point, but if you plan to start or expand your family in the near future, it may be more cost effective and preferable to buy a larger home now that you can grow into. Consider your future needs and wants and whether the home you’re considering will suit them. As you’re on the search for your perfect house, make a checklist that you can bring to each showing.
6. Find the Perfect Home for You
The next step in the process of buying a house is one of the most exciting. Once you’ve completed steps 1-5, you’re now ready to begin shopping and visiting houses that are for sale! The internet has made it extremely easy to shop for houses, however it also provides a lot of information that is unreliable, so always defer to your REALTORⓇ for guidance. Your Styer Real Estate agent will be able to set up a customized home search for you that is tied directly into the local multiple listing service (MLS). When you are viewing homes online, it is helpful to do aerial and map views so that you can see the neighborhood, location, and property lines. Drive-bys can also help save you and your agent hours of planning and touring homes that can be easily crossed off the list. Make notes as you walk through the home, and let your experienced buyer agent point out the good selling features and potential issues. When you think you’ve found “the one,” it’s time to get this buying train in motion!
7. Making an offer
Making an offer may seem simple on the surface, but there are actually many decisions you’ll have to make before putting your offer in writing. One of the most important decisions is how much to offer for the house. No home buyer wants to pay more than they have to for a house, but it’s virtually impossible to know how little a seller is willing to take for their house. There is a fine line between making a strong purchase offer and an insulting purchase offer, so it is important to be cautious and considerate when determining your offer price. We recommend that you lean heavily on your agent’s expertise and the current comparable properties that have sold in the area, and know that a property appraisal is typically required by your lender to protect their investment.
The price you decide to offer for a house is not the only decision that you will make! There are many terms and deadlines that you’ll also include in your purchase offer:
What will the target closing date be?
How large of a deposit should you make?
What common contingencies will you include? Inspections? Do you have a house you need to sell to buy a new one?
Do you need to ask for seller assist with closing costs?
The price that a buyer offers is obviously very important to a seller, but the terms and deadlines can also make or break a deal. It’s critical that as you’re making your offer that you fully understand what each part of the offer and what each contingency means. This is another stage when you’ll want to lean on the expertise of your REALTORⓇ.
8. Complete Inspections That Apply
The first step after making an offer and having it accepted is to complete any inspections that the offer was contingent upon. You must complete all elected inspections within the specified amount of calendar days, or risk losing the right to inspect. The main purpose of a home inspection is to understand how the home operates and to identify any major material defects that the seller may not have been aware of, so it is important as a buyer that you attend inspections, pay close attention, and ask questions. Aside from a standard home inspection, other popular inspections to consider when buying a home include a chimney inspection, radon test, pest inspection, septic inspection, water tests, and structural inspection. Inspections are paid for out of pocket and are non-refundable. Once you have inspection reports, they are shared with the seller, and your REALTORⓇ will help you prepare a reply either accepting the property in its condition or asking for the seller to credit or make repairs. Buyer and seller either agree on repair negotiations or the property goes back on the market and you go out shopping again.
9. Complete Formal Mortgage Application & Work Closely With Lender
The next step to buying a house is to complete the formal mortgage application with the lender and to select the loan program that is right for you and the home you have chosen. At the time of application, you’re going to need to provide many important documents including your previous two years’ tax returns, recent bank statements, recent pay stubs, and contact information for your employer so a verification can be completed. During the formal application stage, you can also expect to pay for the bank appraisal and have the opportunity to lock in your interest rate. Make sure that you ask your lender about rate locks and understand what it means to you as the borrower. Once you’ve formally applied for your mortgage, don’t expect to be done interacting with your lender. Over the next month or so, your lender is going to request specific documents to satisfy conditions of your mortgage commitment. It’s fairly common for mortgage lenders to request updated bank statements, updated pay stubs, and letters of explanation on items that may appear on a credit report or large deposits into a bank account.
10. Bank Appraisal Is Completed
A bank appraisal is performed by a third party that’s hired by the lender to perform an evaluation of the subject property. Their primary responsibility is to determine that the sale price that a buyer and seller have agreed to is a fair for the current market and also to ensure there are no safety issues with the house. Similar to a REALTORⓇ completing a comparative market analysis, an appraisal compares the subject property to at least 3 recent sales in the area, while making adjustments if necessary. As for the safety issues, an appraiser will be on the lookout for things such as peeling paint, broken windows, missing handrails, roofs in poor condition, and a handful of other potential safety problems. Repairs resulting from the appraisal often times must be completed and re-inspected prior to the lender approving the funding for the borrower.
11. Perform Two Walk-Throughs
The Agreement of Sale grants buyers two pre-settlement walk-throughs. One can be performed upon the completion of agreed-upon repairs, and the second is typically performed immediately before settlement and is your chance to ensure the house is in the same condition that it was when you wrote your purchase offer. The final walk through also provides you the opportunity to make sure any repairs that were agreed upon from any inspections have been completed. At the time of the final walk through, your REALTORⓇ is going to recommend testing the HVAC systems, plumbing, lighting, and also take final meter readings for utilities just in case there are any discrepancies after the closing. If something at the final walk through is not satisfactory, it’s critical to work with your REALTORⓇ immediately so that a resolution can be made before the closing date and time.
12. Go To Closing And Obtain The Keys To Your New House
CONGRATULATIONS! You have made it to Settlement Day! Buying a house is one of the most exciting events in life, and closing day is when you’ll receive the keys to your new house. At closing, you’ll be signing quite a few documents that finalize the sale of your new house Make sure before closing that you understand exactly what documentation and identification you’ll be required to provide. Once all the documents have been signed, you will receive all the keys to the property. Again, congratulations, you’ve completed the purchase of your new house!