How Do I Begin the Process of Buying a Home?
Ideal Lending has helped thousands of first-time buyers make their dream of buying their first home come true. So how do you begin the home-buying process? The most important thing you can do is to get yourself organized and get a solid education about the process of buying a home. After all, this is going to be a big investment and the place you come home to each day, so you want to get it right without regret.
How Do I Know if I’m Ready to Buy a Home?
There are some things you need to think about to make sure that homeownership is good for you and your lifestyle. Here are some points to ponder:
- Do you have a source of income and is it reliable?
- Do you have ideas about where you would like to live?
- Another consideration is whether or not you want to live in that area for a reasonable period of time.
- Have you demonstrated the ability to pay your monthly obligations on time?
- Are you ready to maintain a home? When you own a home and something breaks, you either need to fix it or hire someone that can.
What is on your home “wish list”?
One of your first priorities is to establish a “must-have list” and a “wish list’! We would all love to have the house of our dreams on the first run! And while this may work for a few people, it is likely you’ll have to come up with a list of what you really need and what you would like to have.
Once you’ve sorted out some possible locations, your next task is to consider how big or small you want it to be, the bedrooms, bathrooms, and other types of living spaces that are important to you.
Think about the amenities that are part of your must-have and wish list. These are items such as fireplaces, game rooms, lot size. All can play an important part in your daily life.
What you must have and what you wish for deserve some thought before you start looking at a home to purchase.
Selecting the Right Lender & Real Estate Agent
After you’ve considered a few areas that you might like to live in, it’s time to talk to your mortgage lender before you start looking at properties. They will help you figure out what you can afford based on your individual financial circumstances. That not only gives you a great sense of comfort in shopping, it will also help your negotiation with the seller.
Once you have talked with your lender and have your pre-approval letter in hand, it’s time to find a Real Estate Agent to help you find your dream home. Finding the right Real Estate Agent is an important decision. I’m happy to suggest some agents that I think may work well with you in the areas you are searching.
Buyer’s Agent vs Seller’s Agent?
What some new buyers are unfamiliar with are the terms “buyer’s agent” and “seller’s agent”. A buyer’s agent works for the buyer but is paid for their services by the commission they earn on the property they sell. This commission is most often paid by the seller. A seller’s agent works for the seller. So even though the seller compensates both of the agents, one agent, the buyer’s agent, has your best interests in mind vs. the seller’s agent who has the seller’s best interest in mind. This is an important distinction when choosing someone to assist you in the homebuying process
What Should I Look For when Walking Through a Home?
Now that you have narrowed down the areas you may want to live in and secured your mortgage loan financing, it’s time to start looking for your dream home!
Here are some questions you may want to consider.
- Is there enough room for both the present and the future?
- Are there enough bedrooms and bathrooms?
- Is the house structurally sound?
- Do the mechanical systems and appliances work?
- Is the yard big enough?
- Will your furniture fit in the space?
- Is there enough storage space?
- Does anything need to be repaired or replaced?
- Will the seller repair or replace the items?
- Imagine the house in good weather and bad, and in each season.
- How do you like the neighborhood? Feel free to drive around at different times of the day and talk to people who live there.
I Found a Home! Do I need a home inspection?
Now comes the exciting part! You found a home and you’re ready to make it your own. A private home inspector will inspect all of the details of the home such as safety, structure, construction, mechanical, and repairs that may be needed.
For a very small home, you could pay as little as $124, while a very large home may cost as much as $1,000+ for an inspection. It is well worth it as they offer you experienced opinions about the home condition and potential issues.
Before you sign a real estate contract to purchase your new home, make sure that you have the right to a home inspection. You want to make sure you are purchasing the house of your dreams and not the house of your nightmares!
How Do Property Taxes Work?
Property taxes are another key consideration. Every property has property taxes, but some communities have lower taxes than others. Taxes are disclosed in the property listing. You can use this information to compare the taxes from one community to another. You might be surprised by how much they vary!
An important thing to remember is that taxes can and usually do go up each year. When this happens your house payment can go up too! This can be a big shock to first-time buyers, so it’s good to be prepared for an increase.
Do I Really Need Homeowner’s Insurance, and If So, How Do I Get the Lowest Rate?
Yes, it is! I recommend shopping around for rates but also paying attention to the details of the policy. Some first-time buyers are surprised to learn that their deductible is high. So just like car insurance, if you have a home issue, you want to make sure that you can afford the deductible.
If your property is located in a flood zone, you are federally mandated to get flood insurance. It’s not the Lenders requirement, it is the law. Verify this before you make an offer on a property to prevent any surprises!
I am Ready to Make an Offer! – How Do I Determine the Initial Offer?
A popular question is “how do I know what to offer?” There is no right or wrong answer to this question, and your Real Estate Agent should be able to guide you based on comparable properties that have been sold in that area.
Where this becomes a bit tricky are areas where there is a high demand for property and a low inventory. We call this a “seller’s market” and the price may have to be equal to or more than what the property is listed for. On the other hand, the area may have a low demand for property and a high inventory, which makes it a buyer’s market. In that case you may be able to offer quite a bit less than the list price. That’s why finding a real estate agent with experience to guide you through the process is key.
Ideal Lending is a local mortgage lender based in South Florida. Our experienced loan officers will explain loan programs and offer competitive rates so you can meet your homeownership goals. We are here to help you afford the American dream! Let’s talk about your options today!
Buying a new home or refinancing your current loan? Our experienced team of loan originators is dedicated to making that a reality. At Ideal Lending, you will work one-on-one with a dedicated mortgage loan officer who can explain loan programs and offer great mortgage rates to meet your financial goals. Contact us today!