So, you want to buy a home. Where do you start? The process may seem overwhelming and cluttered. Or maybe you know absolutely nothing about the process at all. This home buyer’s guidebook is here to help! It will walk you through each step from your initial thought of homeownership to unlocking your front door for the very first time. Which by the way, is something you will never forget. So let’s answer the ever so common question. “How do I buy a house?” Let’s get started!
I may be biased… but I happen to personally know a great one! (Cough, me, cough) All jokes aside this is a very important step! The entry into Real Estate is easy for lack of a better term. Every agent is going to be different and give you a different experience. We are talking about a personal guide through the biggest financial decision of your life. You want a professional that you feel comfortable around and can lean on in tough times. This process isn’t always rainbows and butterflies. It can get stressful and overwhelming at times.
This next sentence is extremely important. Even if you personally know a Realtor, DO YOUR RESEARCH and make sure they are the right fit. Don’t ever feel obligated to use someone because your family member told you to use them. Do your due diligence and make sure they will perform to your needs. Especially if this is your first time buying a home, you are going to want a knowledgable agent who has been in your shoes and has helped countless first time home buyers. If you learn anything from this home buyers guidebook I hope it’s that you understand the importance of a good Realtor.
Just like choosing the right Realtor, choosing the right lender is also very important. A good Realtor will give you a few options of lenders that they have worked with in the past multiple times and had great experiences. Again, a good lender in your corner is also key to a smooth process from pre-qualification to closing. They make sure you are using the right loan program and let you know how much you can afford based on a few things. I won’t get too in-depth on this as it’s not the most exciting part of buying a home but it’s very important. Let’s dive into some of the main components.
Such as a W2, 1099, and any other income sources like rental properties for an example. This step will be different for most people depending on what you do for a living. They will also need your two most recent tax returns.
Most of the time 60 days worth of bank statements for any accounts you are using to get approved for the loan. Also, retirement and brokerage accounts. Including two months of statements from IRA’s, investment accounts, CD’s, and the last quarterly statement from your 401(k).
Monthly debt payments. Lenders examine your payment obligations to calculate your debt-to-income ratio. List all monthly debt payments, including student loans, auto loans, mortgage, and credit cards. Include each creditor’s name and address, and your account number, loan balance, and minimum payment amount. If you have no credit history, utility bills or records of other regular payments may be used to help you qualify for a mortgage.
Like I mentioned, everyone’s pre-approval process will be different depending on your situation. Things like divorce, bankruptcies, and down payment gifts add a few more steps to the process which is why it is so important to use an experienced lender you feel comfortable with.
After you are knowledgable about how much you can afford without being house broke, it’s time to start finding your dream home! Like I said earlier, not all Realtors are the same. So I am going to breakdown how I help you find properties when you choose to use my services.
First things first we need to nail down your criteria. Your must-haves, preferences, and price range. Once we have this down and are on the same page, I will set you up on an auto-search through our local MLS (Multiple Listing Service). This step is important either way, but VERY important in a market like we are in now. Homes sell fast and relying on public websites like Zillow, Trulia, and Realtor.com will simply not work. These public websites are usually about 48 hours behind the MLS. By the time you see one you like and send me the address to see in person, it will most likely already have an accepted offer. You can start a search for fun to see what is out there right here—> Property Search.
When a property hits the market in your criteria, you will immediately get an email letting you know with a link to the listing. I can get you into the property the same day to see if it’s a perfect fit. On average, my buyers go on 10+ showings before finding the perfect one for them. Sometimes it’s the very first home we see! You never really know when the perfect one will hit the market and we want to be quick in a market like this.
You found the perfect home! You even went on a second showing with some family members or friends to make sure it’s the perfect home! Your Realtor thinks it’s a great buy and your lender tells you it’s within your budget! Now what?? There are multiple aspects to writing a good offer and it will vary depending on your personal situation. I won’t go into crazy details here as I could talk all day about different scenarios and how to win in multiple offer situations. In short, there are many ways to strengthen your offer other than throwing more money on the table and I will educate you on all of these different options when the time comes. Once we have your offer written up and signed, I send it in to the listing agent and there is a bit of a waiting game.
The best-case scenario is me giving you a call with some great news. Offer accepted! The next step is tackling the contingencies. The sale will be contingent upon a property inspection among other things. You will meet with the inspector at the property and go over a VERY detailed report on the home. This is great for peace of mind and everything is negotiable at this point. Again, I will go into much more detail in a real scenario with you but I am just touching on the most important parts of the home buying process.
You found a home, offer got accepted, moved past inspection period, and now the property is officially pending! One of the last steps to buying a home is your lender ordering an appraisal for the home. This ensures it is priced right and the market value matches your offer value. Once the lender gets the appraisal back and the home is priced right, your lender will offer a clear to close based on your financing.
Again, I am keeping this short, as I could go all day explaining this process since everyone’s situation is unique in itself. This is a best-case scenario and doesn’t always happen this perfectly but at the end of the day, we get the job done and make sure you get into your dream home. The last step is sitting at the closing table and signing multiple documents that your title company will explain page by page. Once everything is signed and the money is good to go… You are now a homeowner!!
Congratulations! You invested in yourself, in your future, and have something to call your own that you can personalize and update however you want! There is truly something special about that first time you walk into your home and think of all the possibilities. Don’t get me wrong, homeownership is a lot of work, but is always worth it.
If you have a goal of homeownership, please feel free to reach out to me. Even if it’s a year from now or further. I want to make sure you are planning for success and are ready to go when the time comes. Also, If you don’t live in MN I can still help! Let me do the research for a good agent in your area. Odds are there is a great EXIT agent close by that can help you through the process. At the end of the day this is going to be one of if not the biggest financial decisions you have made in your life to this point. It is SO IMPORTANT to be represented by a team of professionals you can count on.
Category: first time homebuyer, home buyers guidebook, home buying, prior lake, real estateTags: first time homebuyer, home buyers guidebook, home buying, how to buy a home, how to buy a house, Pankonin realty, prior lake, Spencer pankonin