Buying a home is one of the most exciting yet stressful undertakings in life. As a first-time homebuyer, the process can feel overwhelming with all the financial decisions, paperwork, negotiations, and coordinating that are involved.
Getting Pre-Approved for a Home Mortgage
Before you search for your dream home, the people at Mortgage Maestro say it’s imperative to get pre-approved for a home mortgage. This means meeting with a lender to determine the loan amount you qualify for based on your income, assets, credit score and history, and down payment funds. Having a pre-approval letter in hand strengthens your negotiating position with sellers.
Sellers prefer buyers who have the financing lined up since it ensures their ability to purchase the home. The pre-approval process also helps you set a realistic home budget based on what you can afford. When shopping for mortgage lenders to pre-approve you, compare interest rates and closing costs. Consider both national lenders and local banks or credit unions. As you secure the home mortgage, lock in an interest rate as soon as possible since rates can fluctuate frequently.
Choosing the Right Real Estate Agent
An experienced real estate agent who specializes in your local market can simplify the buying experience exponentially. Ask friends and family for recommendations of responsible agents they enjoyed working with. Choose an agent that makes you feel comfortable and addresses all your questions and concerns thoroughly. Look for someone highly responsive whenever you inquire about new property listings that meet your criteria.
Real estate agents have access to more complete housing inventory than what you see online yourself. The ideal agent leverages their relationships with sellers’ agents to learn about houses coming on the market. They can then arrange showings immediately for their clients. As you make offers, a skilled agent will provide sage guidance on pricing strategy based on comparisons to recently sold homes.
Defining Your Home Criteria
Before the house hunting begins, it’s important for you and your real estate agent to sit down together and get aligned with what you want in your new residence. Factors like price range, number of bedrooms/bathrooms, neighborhood, school district, commuting distance to work, and amenities should all be discussed upfront. This prevents wasted time looking at properties that don’t actually match your needs and family’s lifestyle.
Making Your Offer
Once you’ve found a home you love, it’s time to make an offer and get into contract negotiations with the sellers. Real estate agents use Comparative Market Analysis reports to determine fair asking prices for homes. Your agent will suggest an offering price and structure based on what similar neighborhood houses recently sold for. Be prepared for some back-and-forth counteroffers until you settle on an amount. Remember that many variables beyond just price come into play too, like closing costs, inspection contingency clauses, possessions terms, etc.
Most real estate purchase contracts include contingency clauses that must get met before the sale becomes official. Common examples include home inspections, appraisals, and financing contingencies. The home inspection performed after an accepted offer determines if any safety issues, structural damages, infestations, faulty systems, etc. exist that the seller must then repair. If major deal-breaking problems arise, buyers can back out based on inspection contingency terms. Appraisals also protect buyers from overpaying by verifying the property’s fair market value matches the agreed upon price.
Buying a home is an exciting yet complex process, but being prepared and having the right support makes all the difference. While there will likely be bumps along the way, taking the right steps from the start helps ensure you end up with your dream home.