For first time homebuyers, the home buying process can seem like a daunting experience. While it does take time and effort, the process itself should be fun and exciting. The decision to switch from renting your abode to owning it is the first step in becoming a first time homebuyer. In this blog I will share the steps to receiving the keys to your first house! On a side note this is not just for first time homebuyers, homeowners can use this as a review course in choosing the right home-sweet-home
The first step in the home buying process is to interview a realtor to help you. Most realtors will invite you into their office and conduct a buyer’s consultation. During the buyer’s consultation the realtor will ask you questions about how many bedrooms, bathrooms, square footage, and amenities that you will require. He/she should also go over the steps of the home buying process and any special services that they offer. If you are very busy with work or live out of the area that you are moving to, it might be beneficial to hire a realtor that does video showings. It is important to also have a list of questions you may have to ask the realtor. This consultation should set the expectations for both you and your realtor. You’re realtor will ask you if you have been pre approved for a loan. This can be done before or after the consultation, but should be done before you tour homes. This will give you an idea of what you can afford, and will help your realtor select homes for you.
At the end of the consultation, if you both decide to work together, the realtor will ask you to sign a Buyer Broker Agreement. The Buyer Broker Agreement is a contract between you and your broker or the realtor’s broker that states that you both agree to work together. This contract also states the duties that both you and your realtor will perform throughout the process. It is important that you agree to the contract as it creates a professional relationship. If after the consultation you feel like you need to interview more realtors, please go ahead and do so before signing a Buyer Broker Agreement. After all it is your experience and you want to make sure you feel as comfortable as possible with your realtor.
After you have chosen to work with a realtor, you are then ready to tour homes. Your realtor, or their showing assistant will select homes that they feel fit your criteria. It is important to review all homes and select the ones that you like the most. Do not expect to view 25 homes, although your realtor may be willing to show you that many. If your realtor is selecting the right homes for you, you should tour no more than 10 homes. It is important to tour homes that make sense and are right for you. Otherwise you will be wasting your time. Plan to view 3-5 homes a day.
If you have children it might be best to take them with you on a second tour of the homes. While it is important that your children like the home, it is best for you to check the home out before bringing them as some houses are not kid friendly. Keep in mind if you like a house, do not wait too long to put an offer on it. Especially in a seller’s market, you never know who else is putting an offer on or at what price they will offer. A rule of thumb is that if you like the house, there is a great chance that someone else likes it just as much.
Once you have selected the home you like and feel at home in, it is time to write and offer! This is where your realtor really steps in. While the realtor cannot tell you what to offer, they may make a suggestion as to what they would offer. It is best to also consult with a financial aide. You’re realtor will give you a list of comparable homes so you can judge what houses in the neighborhood are going for. Remember that most homes go for somewhere around market value. Don’t expect to get a “steal”, as it is very rare. Make sure you have enough money saved for an earnest money deposit and down payment. Once your offer has been accepted you will need to consult with your mortgage lender and lock in your loan and interest rate. Make sure that your mortgage lender explains to you all of the stipulations of your loan, and that you have a clear explanation of what you will be owing, and restrictions if any. If your offer was not accepted but counter offered, you must then decide if you want to counter back or accept the offer.
Now that your offer has been accepted or your counteroffer has been accepted, escrow will open. You will need to shop for homeowners insurance and order a home inspection. Your realtor may or may not have hired a transaction coordinator, which will help make sure that everything is in on their correct deadlines. You will also need to order an appraisal of the home at the request of your mortgage lender. If during the home inspection, the inspector or yourself finds repairs, you must submit a request for repairs. Keep in mind your realtor and transaction coordinator will be guiding you through this whole process.
After all requests and inspections have been performed your agent will remove all contingencies and you will be on the road to closing escrow! You are usually given 17 days to get everything done before contingencies must be removed, unless specified in the purchase contract. After your deed has been recorded in public records, escrow will close and you will be in possession of your new home, unless specified in the contract.
Congratulations! You are now a first time (or second, third, etc.) homebuyer!