A Step By Step Look at Home Buying

Some real estate laws and customs differ depending on where you live, but there are many home buying steps that are standard, even though they might not be accomplished in the same order in every location. Here are some steps to buying a home that we hope will get you started.

1. Get Your Credit and Finances in Order

Your credit report and credit score are primary factors in determining what interest rate you will receive and how much the financial institution might be willing to loan you toward the purchase of the property, so make sure you check your credit reports and ensure there are no issues before starting the property search process. Know your financial history before you apply for a mortgage, as errors on credit reports are common and often require a lot of time to clear up.

2. Get Familiar with the Mortgage Industry

Have at least a bit of background about the loan process before you talk to a lender. If you are not familiar with the process consult with your realtor who can assist you. Find a ender that you are comfortable with and that fits your needs.

3. Get Pre-Approved for a Mortgage

Once your credit and finances are in check, apply for a pre-approved mortgage to establish how much house you can afford. Getting pre-approved also helps if you are involved in a bidding war for a property, the potential buyer that has already been pre-approved will usually get preferential treatment from the seller.

4. Determine Your Wants and Needs

Grab a piece of paper and divide it into three columns. If you'll have a co-owner, have that person make a list too, but don't share ideas just yet.

In column 1 list features that you consider "Must Haves". For instance; if the house must be located in a specific school district, if the house must have 3 bedrooms, a 2 car garage, a large kitchen, a view or if the house must be one level with few or no steps. Also list if there must be no restrictions against a home-based business or if there are neighborhood restrictions against parking vehicles such as RV's or boats. In other words, list every feature that you feel is an absolute must!

In column 2 list the features you would "Like to Have". These are features that would be a plus but you would be willing to be flexible about. These features could include a basement or a deck, whirlpool tubs, walk-in closets, gas heat, central air conditioning, a certain type of architecture, a pool, gas or electric cooking.

In column 3 list the features that you absolutely "Do Not Want". List all of the features that you cannot accept. These could be a home located next to a highway or in a congested area, certain types of architecture or homes that need a great deal of work.

Review your list. If your co-owner made a list, compare them to see if your priorities match. If they don't, you'll need to compromise, revising your lists so that both of you are happy. Making a list is a great exercise because it forces you to think about your wants and needs. But, keep in mind, that this list will probably change and evolve when you actually begin to look at houses. Even home buyers with an unlimited budget rarely find the "perfect" home.

5. Select a Qualified Real Estate Agent

Basically, there are many agents who all adhere to the same professional standards or code of ethics established by the National Association of Realtors, but here are some things you should consider in finding an agent and why you should do business with The Stimmel-Brooks Team:

Its important to feel comfortable with an agent's personality, professionalism and ability to serve or assist you in your home buying/selling process. You should also find an agent who has a good website that provides you with ample educational resources, information about the area, offers you services and has a good MLS search and detailed information on listings you are interested in. Find an agent who will offer you prompt professional service and who is knowledgeable and will help guide you through the real estate process.

Ask us for referrals. Don’t do business with The Stimmel-Brooks Team because we have a nice website, let our previous customers tell you how we serviced them! Make an appointment and interview us, ask us about our marketing practices, affiliations, placement in MLS, services offered, commission rate, etc. Get a feel for our knowledge and experience of the industry and the area and more!

6. Start Searching for a Home

As Real Estate Agents, we have many tools at our disposal to help you through the process. We can help you by searching the multiple listing service (MLS) system to find listings that match your desired criteria, lending our knowledge of the area, school systems and more.

You can also pick up House For Sale magazines and read classified ads in your local newspapers, surf the Internet for homes and plan afternoon drives to preview neighborhoods. The Stimmel-Brooks Team website has multiple listing searches that you can utilize and then we can show you any property in the area that is of interest.

Begin by looking for two types of real estate; houses that seem to match the one you'd like to buy and houses that are similar to your current home. Use the list that you made in Step 4 to assist you.

7. Making an Offer

The following are some tips that can help you get the best deal when it is time to make an offer on a home. No matter what your strategy is, you should have a good idea of the home's market value before you make an offer.

Low-balling - Be realistic, some seller's take a lowball offer as a personal insult and may not be as anxious to deal with you on your next offer. That is fine if low is all you will go, or if the property is truly overpriced, but low-balling can create problems with future negotiations.

Being generous - Come in too high and you may not find the seller's low point.

Helpful advise from your Agent - One area that The Stimmel-Brooks Team can help you with is to provide you with enough information and advise to assist you in determining the best price to offer. We can run comparables for you and will be involved in offer strategies.

Finding Sales Information, Local Tax Collector's Website/Courthouse - Ask the staff to explain how to decipher deeds or other records that indivate sales prices, find out the selling history of properties in the area and often get sketches and facts about a home's structural components.

Asking Prices - Advertising gives you a feel for average asking prices, but your focus should be on sales prices. You will find them recorded as explained above or on multiple listing recaps of sold properties.

Should You Have an Appraisal - Order an appraisal before making the offer, but make sure the results will not be shared with others (and keep in mind that opinions from different appraisers can vary).

Tax Values - Tax valuations are not a good measure of a property's market value. Your community might have a general guideline, such as tax value = 80% of market value, but the figures are not usually reliable. Ask your local tax assessor for details about your specific area. Take a look at a home's tax value, but never assume it matches the market value of the property.

Other factors that can affect price are:

How long has the house been on the market? (If only a short time the sellers might not be too motivated).

How does the house compare with others for sale in the same neighborhood?

Is the house in need of repairs or massive updates? Updating items such as insulated windows, plumbing and electrical systems, kitchens, and bathrooms can be costly.

How much time is left in the roof?

What about the neighborhood, do you foresee home values climbing, staying the same, or possibly taking a downturn?

The bottom line is analyze each home's condition and compare it to others on the market, but your final offer will likely involve a good deal of gut instinct. Is it the house for you? If you have been searching for a home for a while, you will probably know the answer to that question the minute you walk in the door.

8. Home Inspections and Other Tests

In some states, home inspections are accomplished before the final purchase contract is signed. In other states, inspections take place after an offer is finalized. No matter when you do them it is critical to decide which inspections and tests you want to perform. The Stimmel-Brooks Team would be happy to advise you when home inspections should be handled and if additional types of testing are important for your specific area. For more home inspection information click here.

9. Avoiding and Correcting Last Minute Problems

As your closing date nears, everyone involved in your real estate transaction should check its progress on a daily basis, because staying on top of things means you'll know immediately if there's a problem that must be dealt with. Here's a bit of information that focuses on a few common problems that home buyers must deal with before they close on a house.

10. You're on the Way to Closing

Most of your home buying problems are behind you now and you're on your way to closing, also called settlement, which is the event that transfers ownership of the property to you. Here the realtor and the closing agent (can be a broker, lawyer, or closing specialist) will help guide you to your new home!

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