If you’re thinking about pulling the trigger on buying your dream home in 2020, here are the steps you need to take.
I work with many first-time home buyers and one of the first questions I typically get is about the home buying process as a whole.
Below is a comprehensive process that breaks down the general steps of buying your first home. When you take each of these steps, the process can be much less daunting.
1. Start saving a down payment
This may seem obvious but it is very important that you take a look at your finances to determine how much you can put down on a home. Your downpayment could range between 3%-20%. If you are looking to buy in the next few months, your current savings toward a downpayment can really help determine your home-buying budget.
2. Check your credit score
A healthy credit score is an important factor in getting pre-approved for a home loan. Make sure that you have addressed any major credit card debt or other debts before going to meet with your lender.
3. Find a lender that you trust and get pre-approved
Finding a lender that you trust is a very important part of the home-buying process. I recommended asking your real estate professional for advice on who to use. Chances are, they have a lender that they work with on a weekly basis who they know will work hard to make sure that you close on time. This will guarantee that you have a smooth transition to your new home. Realtors do not receive any kickback from lenders that they recommend, so you can be sure that you are using a lender who has your best interest in mind.
4. Find a real estate agent
Here is where I come in! When deciding who to use for your realtor, I recommend using someone that you trust and know will work hard to represent your needs and wants. People tend to use friends and family because they already know and trust them on a personal level. Always ask around to friends or family for recommendations as well. If they had a wonderful experience with their Realtor, chances are you will too!
5. Start shopping!
Now the fun begins! You are pre-approved, you have your agent and now all you need to do is find your dream home. Your Realtor can set you up on an email search so that you get listings that you may be interested in sent directly to your inbox. There are also some great apps that you can download: Homespotter, Realor.com and Zillow to name a few.
6. Make an offer
Making an offer can seem like a scary process. Once you find a home that you love, your Realtor will help you construct an offer that you are comfortable with and competitive with the current market. Sellers will either accept, decline or counter your offer.
In most cases there will be some negotiating between your Realtor and the seller’s agent. Your Realtor should communicate with you through every step of this process and ensure they have your approval before any negotiations are made.
After an offer is accepted on your new home, you will have 10 days to complete any inspections that you want to do. Like with the lender, your Realtor will have inspectors that they trust and work with frequently and will be happy to recommend. You are also welcome to use someone that you found.
If there is anything found on the inspection reports that you want addressed by the sellers, your Realtor will help you negotiate to get those items fixed before the agreed upon closing date.
8. Get an appraisal
Once inspections are complete, your lender will order an appraisal not he home. An appraiser will come out and take a look at the home to determine its value. They base their assessment on the condition and features of the home as well as other comparable homes in the area.
9. Closing time
Shopping, negotiations, inspections and appraisal are all complete! Your loan is in and everything is good to go. You will meet at the title company with your title agent, your Realtor and your lender for the closing. Get ready to sign your name about 40 times!
10. Moving day!
The most fun part of the whole process! Grab your friends and family and go make your home your own. You did it!
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