Thinking about purchasing your first home? If so, you are not alone. Over the past few years, with interest rates at historic lows, higher inventories of homes available, and budget friendly prices, more individuals than ever before are making the American dream become a reality! However, good company doesn't make the process any less intimidating!
If you have never purchased a home before, where do you go for advice and who do you look to for the answers to your questions? With the internet, there is an enormous amount of information available 24 hours a day, 7 days a week and it can be a great resource for you to utilize. However, to truly get the guidance that you need to make the whole process easier and more enjoyable, you should decide right now to work with a Realtor. A Realtor who is working for you as a Buyer's Agent will be representing you, working with you and for you every step of the way from the first house that you walk into to the moment you get the keys to your new home. As real estate professionals, we have walked through this process multiple times and are ready to put that experience and knowledge to work for you. The purchase of a home is the largest investment that you will make in your lifetime; it makes sense to align yourself with someone who is looking out for your best interests and are there to protect you as a home buyer.
As a first time home buyer, typically you will have a lot of questions. Where do you start? This website will provide you with a lot of valuable information, but we encourage you to reach out to us for a no-obligation, one on one consultation. We can talk with you about the process and give you guidance on the steps to take in order to make your home purchase a smooth one. Here is an overview of some of the questions commonly asked by first time home buyers embarking on their home purchase.
The first question that you will want answered is "How much home can I afford?" We can run numbers with a mortgage calculator to give you a ball-park figure of the home purchase price that would fall within your budget, but the best way to find the answer to the question is to consult with a mortgage professional. A mortgage professional/loan officer can talk to you about the loan products that they have available and what product would work best for your particular situation, the down payment and closing costs that you would need to make a home purchase, and the interest rate for which you qualify. In order to determine this information, the loan officer will gather information from you and will run a credit check in order to get an idea of your credit score. Once your loan officer has a pretty accurate picture of your financial situation, he/she can issue you a pre-qualification or a pre-approval letter, meaning that you qualify or are conditionally approved for a loan of a stated amount as long as the information given was accurate and nothing changes with regards to your financial situation. It is important to obtain a pre-approval letter as you will need one in order to submit a purchase offer on a home and also will help your buyer's agent determine the price range of home that you can afford. We work with a number of great mortgage lenders and would be happy to refer a few for you to consult. One of the most important parts of the equation is to make sure that you can work with the loan officer that you choose; it is important that they communicate to you clearly and effectively and are willing to answer your questions. We also advise you to work with local lenders; it is more convenient in that you can meet with them personally, they know the local laws and practices, and you will typically receive better service as the loan officers rely on referrals from satisfied clients for their business.
Once you have a good idea of your financial situation and how much home you can afford, the next step is to meet with us for a personal consultation. At that appointment, we will talk about the home buying process in greater detail and find out more about what you are looking for in a home. That is the time to pull out your wish list! We will ask a lot of questions, so be prepared. How many bedrooms and baths do you need? What is your price range? Do you want a basement? What size yard or lot do you wish for? Do you want a fixer upper or a turn key home? What neighborhoods do you like? Once we get a better picture of what you are looking for in a home, we will set up a home search for you through this website that will allow you to view all of the homes that meet your search criteria and will notify you when new homes are listed that fit your search. Once we have a short list of homes that you would like to view, then the fun begins! We will take you to look at properties at that point. Rest assured, we will never push you into the first home we see unless it is absolutely the right one for you! We are patient and will take the time to try to find the right home for you and for your budget.
When we find the right home for you, we will sit down with you and show you a home valuation for the property. By looking at comparable homes and neighborhood market activity, we can get a pretty good picture of home pricing. At that point, we will give you strategy regarding your initial offer and walk you through the paperwork necessary to put that offer together. Once we have the paperwork written and signed by you, we will submit that paperwork, along with a copy of your pre-approval letter, to the listing agent for the property. Negotiations begin at this point. This is a stressful time for both the buyer and the seller, but remember that this is a business transaction, so do not take the responses to your offer personally. There are three ways that a seller can respond to your offer: they can accept it as written, reject it totally, or counteroffer on any point of the contract. If there is a counteroffer, you as the buyer have the same options in response to the counter: accept the counter, reject the counter and walk away, or counter back again. We may go through several rounds of negotiations before both parties agree to all of the terms and conditions of the offer. Once everyone is in agreement, changes will be made to the paperwork, reflecting the agreed upon terms and conditions and both buyers and sellers must initial and sign the changed paperwork. In Ohio, a verbal agreement to terms and conditions is not considered a contract. It is only a contract when it is in writing and both parties have signed and initialed any and all changes.
Once we have the signed/initialed contract, we will forward that contract to your lender so that they can get to work on your loan application and get the appraisal and title work ordered. We will also encourage you to contact a home inspector to do a whole house inspection on your property. You will have the option of just doing the whole house inspection or doing the whole house and adding other inspections as well, such as a wood destroying insect inspection, radon inspection, and well and/or septic inspection if warranted. Some loan products will require a wood destroying insect inspection, so please be aware of the type of mortgage product that you are using and if there are any additional inspections required by the lender. The clock starts ticking for your inspection period once the contract is signed, so the sooner that you get your inspections scheduled, the more time you will have if you need to follow up getting estimates from contractors for repairs. Before your inspection period ends, we will sit down together, go through the inspection report, then put together a Post Inspection Agreement, which is a request for the seller to make specific repairs to the property for defects found during the inspection. This is the last step of negotiations and another time that it is important for you to have a Realtor representing you during this time.
Once the Post Inspection Agreement is negotiated and the appraisal is back, the closing will happen once your lender has had a chance to review your file, title work has been completed and reviewed, and underwriting has given you approval for your loan. The closing is then scheduled with the title company. The closing is simply the time that you meet with the title company and sign all of the paperwork for your loan. The seller will also sign a few documents, including the deed transferring ownership of the property to you. From contract to closing, the process usually takes from 30 to 45 days, depending on the type of loan that you are using and how quickly you are able to get the necessary documents to your lender. At closing or the agreed upon occupancy date, you will receive keys to your new home!
There is a lot involved in the process of purchasing a home, but we are here to assist you and help make the process as smooth and easy as possible. This is not a complete and comprehensive review of the home buying process, but an overview so that you will gain a little more understanding of the players involved in the transaction and the steps along the way. Please do not hesitate to call and ask us questions...we are here for you and are looking forward to helping you make your dream of home ownership a reality!