Brett Aroneck, Broker, GRI., ABR.
Mobile: (904) 514-1247
Office: 904-261-9444
Fax: (904) 261-9479
brett@amelia.com
A Step By Step Look at Home Buying
Buying a home is an intense and elaborate process that, at times, can seem overwhelming. However, when it is broken down into a series of steps, the home buying process is actually a simple process. These basic steps will give you a good idea of what to expect and with my guidance, we'll be able to get you in your new home in a short amount of time.
Step 1: Consultation. This is where we sit down for a few minutes and do some preliminary work. Most importantly, this is when you will explain to me the purpose of buying a home; your expectations of me as your agent and what you need and want the home to feature.
Step 2: Loan Qualification. When we meet during the consultation, there will be some forms that we can fill out and provide to multiple lenders on your behalf. If you have not been qualified for a loan prior to consultation, the forms that we fill out will take care of that. Qualifying is important because it will tell us exactly what you can afford in a home. We must get you qualified prior to searching for any homes
Step 3: Home Search. After we get you qualified, it will be time to search for your home. Nowadays, over ninety percent of homebuyers search the internet prior to meeting with a real estate agents. Because of this, I already know that you will probably have found some properties online that are of interest to you; please forward me the information on any properties that you have found and I will arrange for us to take a look at it, if it is still available.
Step 4: Home Selection. After we view some homes that are of interest to you, you may decide that one of them meets your expectations. When you decide this, it will be time to make an offer on the property.
Step 5: Offer, Negotiations, and Contract. When you have selected the home that you want to buy, we will write an offer on the property. The offer (or bid) will be submitted to the seller and the seller will consider the offer, based on price and terms- terms is an industry word that we use to describe everything except price (seller concessions, closing cost, closing date, etc.). If an offer is returned by a seller with a change to the price and / or terms, then this is considered a counter offer. Counter offers are when the buyer and seller are negotiating- it could be price, closing date, closing cost or any other term. If an offer or counter offer is accepted by both parties, we will then have a contract. This is when our work will truely begin. Time is of the essence as all contracts are time sensitive and we must work diligintly to complete all of the task prior to closing.
Step 6: Pre-Closing Task. There will be numerous task for us to complete prior to closing, however, will good communication between us and diligent work, we will "breeze" right through it. One of the task will be a home inspection; as the buyer, it is our responsibility to set up the inspection. We will meet the inspector at the property and they will examine the home. The home inspector is not trying to determine if anything is broken. Thier job is to determine if the home's components are in working order- working in the manner in which the product was designed to work. If any components are not working properly, we must deliver written notice to the seller and the seller may have to bring those items into working order. Another task that we will need to complete are the lender requirements; the lender will need your most recent pay stubbs and your past two (2) years of tax returns. It is not uncommen for lenders to "misplace" their documents- we may need to resend certain documents in order to meet the lender requirments. Also, during this time, the lender will facilitate the appraisal. The property must appraise, at a minimum, for the contract price.
Step 7: Closing. This is when you sign the documents and become the new owner of the home. There will be various task to complete during this stage, however, most of the major task will have already been completed by this point.
1. Don't Make a Major Purchase
If you are depending on a mortgage to move in, don’t make any major purchases until after the closing on the home (fight the urge to get a new car to put in your new driveway). An increase in your debt to income ratio reduces the amount of monthly income available for your mortgage payment. Using cash to purchase the car could also create a problem, since banks consider cash reserves when approving your mortgage. If you must make a major purchase before closing, talk to your loan officer before you do it.
2. Don't Change Jobs Unless It's Necessary
Lenders like to see a consistent job history. They aren't usually as nervous if you change jobs within the same field, but it's better to stay put until the keys to the house are in your hand.
3. Don't Let Your Emotions Take Over
Be realistic. No home is perfect, especially older homes. If the seller refuses to do a small repair, don’t let it kill the deal on a home you truly love, realize It's not unusual for new owners to take care of some repairs themselves. Keep a cool head during the entire home buying process, especially during and after an inspection.
On the other hand, don't fall so much in love with the house that you'll buy it no matter what needs to be done--unless you're absolutely sure you can handle it emotionally and financially. Decide what type of repairs you can realistically tackle, then stick with the decision.
5. Don't Forget to Switch Utilities
That sounds simple, but you'd be surprised how many people forget to apply for utility service at their new home. Call the utility companies as soon as you have a contract. Find out how many days lead time they need to switch the service, then get back with them when you have a firm closing date.
Don't forget to discontinue services at your old home.
6. Line Up Your Hazard Insurance
A no-brainer, right? Acquire hazard insurance as early as possible, as it’s another often-forgotten task that buyers scramble to take care of at the last minute. Lenders will ask to see an insurance binder showing you have coverage at the closing.
In some locations, additional types of insurance coverage might be necessary. Talk to your lender about insurance requirements well before the closing date.
7. Don't Become Best Friends with the Seller
While it's great to be friendly, but don't get into too many long discussions with the sellers, because it could cloud your judgments.
Remember, this is their home. A casual statement about "ripping up that ugly carpet" might be enough to keep the seller from negotiating with you about repairs or other issues that crop up.
8. Don't Panic if the Appraisal Comes in Low
At least not at first. There are some things you (and your agent) can do to correct the problem.
9. Don't Go It Alone
As your agent, it's my duty to track many of the day to day details that involve the lender, the seller, or the seller's agent.
10. Don't Ignore Lender Requirements
Know what is expected of you and take care of it. For instance, a Certificate of Eligibility is required to move forward on a VA loan. That's something you must handle yourself. Answer lender questions and provide required paperwork as quickly as possible--your closing depends on it.
Advice for 1st Time Home Buyers
Even for experienced home buyers, it can be a confusing process, but can be especially intimidating for the 1st Time Home Buyer, so here are some tips to help guide you through the process
Get Prepped in Home Buying Basics
Before you begin, get educated about the home buying customs where you live. Relatives or friends who live in another state might have some good general advice for you, but chances are the process is very different in their area, so avoid the mistake of relying solely on their advice to make important decisions.
So How Do You Learn the Basics?
Talk to a real estate agent for advice about the typical home buying scenario. This does not mean you have to sign an agreement for the agent to represent you, but it is a good opportunity for you to gain some knowledge off of an expert who deals with these transactions on a continuous basis and allows you to get a feel for me as your potential agent when you are ready to make that decision.
You can also talk to a bank loan officer or mortgage broker, they look at home buying from a different perspective, but can usually give you a basic overview of the process.
Home Buying Questions to Ask
- Will the agent help you compose your offer to purchase a home? If not, who does help?
- If the agent uses fill-in-the-blank forms, ask for a blank sample copy to take home and study.
- What types of disclosures are sellers in your area required to give to buyers? Can the agent give you a sample copy of typical disclosures?
- What types of home inspections are standard in your area? Are there other inspections that the agent recommends?
- How much do the inspections usually cost? Are they regarded as a buyer expense?
- When are inspections done?
- Is a survey required for most transactions? If so, who typically pays for it, the buyer or the seller?
- Does an attorney or title company do a title search to verify that the deed is problem free? What's the average cost for that service?
- Who acts as settlement agent, the person who puts together final paperwork for you to sign? (attorney, title company personnel, real estate broker, other)?
- Other than loan costs, what's the average total cost for other closing fees?
- Taxes, settlement agent fees, etc.
- How long does it usually take to close on a home once an offer is accepted?
That's a good start. After you have the answers to those questions, you'll have a better feeling for the basic customs in your area.
Understanding Your Local Real Estate Market
It's important to study your local real estate market before you seriously look at houses so that you can make educated decisions through out the process.
As your agent, I can get you a report of sold comparables and we can look at what current listings are being priced at to reveal the mindset of sellers in your market.
Start browsing the real estate market in your town now, before you talk to a real estate agent or for sale by owner seller.
- Browse listings on the my website of the entire MLS market
- Pick up real estate for sale books in your area.
- Read real estate ads in the local newspapers.
- Take adventure drives and look for For Sale signs. Note which neighborhoods you like the best.
- Make changes to your Wants & Needs list if necessary.
Step 1 - Get Your Credit/Finances in Order