THE STEPS TO BUYING A HOME
Buying a home can be one of the most significant investments in your life. Not only are you choosing your dwelling place, the place in which you will bring up your family, you are most likely also investing a large portion of your assets into this venture. The more prepared you are at the outset, the less overwhelming and chaotic the buying process will be. The goal of this page is to provide you with detailed information to assist you in making an intelligent and informed decision. Remember, if you have any questions about the process, we're only a phone call or email away!
DO SOME RESEARCH
It's important to start researching what you want in a home as soon as you can. Look at listings online, look at the different housing types and options and make notes of the kind of properties you're interested in. Try to get a sense of the local housing trends by seeing how long certain kind of homes stay on the market.
You should get your credit checked while getting a feel for the kind of home you want. Your bank may allow you to view your current credit score, or you can get a free copy once per year at Annualcreditreport.com. You can get a better loan with a higher credit score, so it's important to dispute any errors you find on your credit report.
DETERMINE HOW MUCH YOU CAN AFFORD
The general recommendation when you're looking for a home is to look for something costing no more than 3-5 times your annual household income. This is under the assumption that the buyer plans to put down 20% for the down payment and already has a moderate amount of debt from other sources.
There are plenty of calculators available to help find the best monthly mortgage payment for you; everyone's financial situation is different so the general recommendation may not be the best one for you. There are quite a few costs that go into buying a home, such as the actual buying of the home, a down payment, closing costs, and any attorney or appraisal fees. You may also want to leave room in the budget for furniture or remodeling. It's for reasons like these that it's recommended to look for a home less than your calculated spending cost, to help make sure you have leeway for the other expenses.
GET PREQUALIFIED/ PREAPPROVED WITH A LENDER
It's a good idea to have an idea of how much you can be lent for a home loan before you start looking for one. Try to get pre-qualified for a mortgage through a mortgage banker, also known as a lender. A lender will review your financial information (usually including your income, amount of savings, and any investments you have) and give you an idea of how much they can lend you. This will help give you an idea of the price range you can look at for homes.
Keep in mind that it's easier to keep the ball rolling by getting a lender local to where you're moving. A distant lender could cause issues with communication down the road and slow down the home buying process. If you're working with or plan to work with an agent ask them for any recommendations they have. Lenders aren't allowed to compensate agents for referrals, so an agent is only going to refer you to a lender they know will get the job done quickly and efficiently.
It's also worth it to get pre-approval from your mortgage lender as well. Being pre-qualified gives a good idea of what you can afford, but getting pre-approval will give you an even better idea of the size of the loan you can qualify for. You could even go ahead and get full approval before you start home shopping. Being fully approved will make the sale go much quicker and make you look more appealing to potential sellers.
FIND THE RIGHT REAL ESTATE AGENT
A Real Estate Agent is an important partner for buying a home. An agent can provide you with information not readily available to the public, and they can find new listings before they become available online. Using an agent doesn't cost you anything as a buyer, an agent is compensated from the commission paid by the seller of the house. If you're working with an agent keep it clear; if you speak to a listing agent or visit an open house be sure to let them know you already have an agent.
If you're looking for an agent local to Port St Lucie we at Century 21 Al Professional can help. We have a number of agents available in St Lucie County and can help find the right agent for you. Visit our agents page or contact us to get an agent to help with the home buying process.
SHOP FOR YOUR HOME
By now you should have a good idea of what kind of home you want. From the number of bedrooms and bathrooms to the living space and neighborhood. An agent can use this information to narrow down the search to homes that better meet your criteria and can even line up several homes for viewing fairly quickly.
Withhold judgement of a home until after you've toured it fully, you'll find that some issues you have can be remedied with nothing more than a paint of coat and nice furniture.
When you make an offer, do so at a price you think the seller will accept, or at the very least counter. Get input from you agent and see if that price would even be considered. Your agent can help verify the price of the home and help prepare a reason why the seller should accept (or at least consider) the lower price.
After you put in an offer on a home it is important to get an inspection of the property done. This will help you find any damages or repairs that need to be taken care of. A real estate agent can normally help arrange an inspection soon after the offer is accepted by the seller. You'll be able to renegotiate or withdraw your offer with no penalty if the inspection finds significant damage that wasn't known before.
You and the seller will both get the inspection report. You can work with the seller from there to get some things fixed on the property before closing. You'll get the chance to have another look at the home afterwards to confirm the changes and repairs have been made. From here the closing can be finalized.
A lender can provide an appraiser to give an independent estimate of the value of the home. The appraisal is not directly associated with the lender (and is usually a third party company) and they make sure you're paying a fair price for the home.
Contracts for purchase tend to contain a provision for an appraisal. If the home doesn't appraise for the offered amount, you won't be required to complete the transaction and can pull out if desired. Receiving a low appraisal doesn't always mean you should bail, it might be worth it to discuss with the seller alternative options to leave you both satisfied.
If you paid for the appraisal you're entitled to a copy of it.
CLOSE THE SALE
Closing the home involves a lot of paperwork, for both the buyer and the seller. Your lender can help with some of the paperwork by having it handled by a title company. It generally takes a couple of days after the paperwork is finished for any loan to be funded. Once it's all taken care of and the loan approved, you just need to decide on a closing date and get ready to move into your new home.