Home Ownership

Home Ownership: The Complete Home Buying Process

down paymentMany people hesitate to purchase their own homes because of the many risks involved. Buying a home is a gigantic step in life that is financially demanding. However, with the right guidelines, you can purchase your home within 60 days and bid your landlord goodbye.

1. Put Your Finances in Order

Financial capability is a core determinant of home ownership, and you have to put your financial situation in order before embarking on a house hunt. You cannot just wake up one morning and buy a house without proper finances. You have to get your credit report and determine how much you can acquire regarding a mortgage loan and how much down payment you can put up for your new home.

Additionally, you must find a credible lender who offers the best interest rates. This can be a credit union, a banking institution of even FHA loans. Once you find a good lender, you should request for a pre-approval letter from them to ascertain that indeed you qualify to purchase a home.

2. Hire an Agentreal estate agent

Buying a home without a professional agent can be a daunting task that can take months or years to finalize. The advantage of getting a buyer’s agent is that they act as a fiduciary and get you the best home within your budget. Agents are also more familiar with home-buying procedures and can thus expedite this process without overlooking anything.

You can inquire from your social circles and get a referral to a trustworthy real estate agent. It is better to get an agent who is from the area you intend to purchase a home. Such an agent is likely to guide you to the best homes in your area of choice.

3. Do Your Research

Finding a great home might necessitate you to trawl the internet and even roam through the neighborhood. You should request your agent to subscribe you to a multiple listing services (MLS) which will enable you to access multiple listings in your area. You should also visit open house viewings around your neighborhood and do not shy away from foreclosures and fixer-uppers.house for sale

You ought to prepare a list of the things you want in a home. This can include the number of rooms, the size of the kitchen, appliances, yard size, and flooring or fixtures amongst other things. This checklist should guide you in your home search.

4. Write a Purchase Offer

Once you get the house of your dreams, you must write a purchase offer. This should be done after researching on the prices in the market and the specifics of the house. Houses that are overpriced and have been in the market for a long time can fetch lower prices. For homes with desirable features in great locations, you must write purchase offer quickly lest other buyers get the house before you.

In some instances, your purchase offer might be rejected and to avoid a repetition of this, it is necessary to discuss the reasons for the rejection with your agent. This will help you avoid any mistakes on your part that can lead to rejection of your offers.

5. Negotiate and Counter Offer

If your purchase offer is counter offered, you have to enter into negotiations with the property seller. Again, you have to consult with your agent regarding the prices before making your new offer. You should also use any misfortunes or family situation to compel the seller to accept your offer

6. Earnest money deposit and Ordering Titles

When the seller approves your offer to buy the home of your dreams, you will need to deposit an earnest money check with a third party that you trust. The check cannot be made payable to the seller because you still have to inspect the house and get everything else in order before you close the deal. You should also request your agent to order for your title or open an escrow account for your transaction. This information comes in handy for insurance and lenders.

7. Appraisal and Lender Requirementshome for sale

You also have to order for an appraisal from a neutral third party. Low appraisals can also cause a few monetary problems, and you have to discuss with your agent on whether to get a new appraisal or move forward with the appraisal. Before the appraisal, you might have to pay a fee to your lender. After the appraisal, the lender may request for more information, and you have to comply with this. After appraisals are done and the files are approved, your lender will request for an underwriter approval.

8. Inspections, seller disclosures and home insurance

Your seller disclosure documents must be read carefully. You must also raise questions where you are unsure of this disclosure. Once you have read through the disclosure, you have to call in a qualified inspector to check out the home for any pest infestation and health hazards. You should also simultaneously order for a home insurance policy. This can be obtained from your car insurer or special home insurers.

9. Repairs and removal of contingencies

In case the inspection officer discovers any issues that had not been raised on the seller disclosure, you have to contact the seller immediately and request for immediate repairs. While no house is perfect, you need to particularly look out for safety concerns around the home and make sure these are tackled before you close the deal.

10. Closing the dealnew home

The final step is to ensure that your loan has been approved, and appraisal accepted before removing any contingencies from your loan. You can then sign the contract, get your title, close your escrow account and deposit a certified check in the seller’s account.

Although every state has its home acquisition rules and regulations that define the steps to home ownership, these ten steps discussed above can help every new potential home owner in the US to acquire the property of their dreams.