Steps to Home Ownership
Step – 1 Deciding to purchase a home
The first step in buying a home is deciding to go ahead and taking the necessary steps to achieve your goal, consider and write down the reasons you want to own a home, decide if buying makes good financial sense and if you can afford the home that meets your requirements. A good rule of thumb to guide yourself by is that your mortgage payment should not exceed 1/3 of your net monthly income.
Step 2 – Seek Professional Guidance
We can help you! We are professionals with many years of experience in the Real Estate and the Mortgage Business; we can guide you in all the aspects of finding, negotiating and obtaining a fully executed contract for the purchase of your new home and provide you with a loan to conclude the purchase at the best possible interest rate and the lowest down payment in today’s financial market.
We can schedule an appointment to meet with you and discuss the area of interest and the features of the home you would like to purchase. We’ll also discuss the surrounding neighborhoods, schools and economic factors liable to affect the market today and tomorrow, as well as how you would like your house and neighborhood to grow with you. At this time, we will also ask you for the necessary documents we will need for a pre-approval for a mortgage loan. A pre-approval is a written statement from one of our loan officers indicating that in his/her opinion, after analyzing your financial capabilities, you are approved for a mortgage loan up to a certain amount. The fact that you are pre-approved will help us when we are negotiating the deal.
Step 3 – Begin the Hunt
After our meeting, we will search all data bases for houses on the market that fit your criteria. We will preview these houses to determine if all aspects fit your needs and eliminate the ones that do not so as to avoid wasting any time. Then we will schedule appointments to tour these homes at times that are convenient for you. While touring these homes, we will point out positive and negative features and we’ll ask you to tell us what you like and don’t like of each one of them and at that time you may likely amend your original wish list. As we tour more homes, you will realize new things you didn’t think about previously with all new information and possibilities and some things will become more important and others less important. This will then help us refine our search criteria and better narrow down on the house of your dreams.
Step 4 – Know the Market
Our experience and knowledge of the local Real Estate market is a critical factor in the search for homes. We’ll let you know when the market in a particular neighborhood is “hot” and requires immediate action or when the market is “cool” and allows for thoughtful consideration. We’ll also let you know when the asking price has room to negotiate and when the house is “priced to sell” quickly. Our distinctive knowledge of the market will always keep you one step ahead of other buyers hunting for homes. In a “seller’s market”. It is not uncommon to see multiple full-price offers and even offers above the asking price. On the other hand, during a “buyer’s market”, there is an abundant amount of homes for sale and fewer buyers out there looking. This then gives us more negotiating power as homes take longer to sell.
Step 5 – Find Your Dream House
Working with us you can be assured we’ll find your dream home. Once we do, we’ll construct a purchase offer tailored to your needs including the proper contingencies (for example) obtaining financing, precise home inspection, clear title, etc. The offer is typically presented with “earnest money deposit”. This is a deposit made to secure an offer to buy the property. This amount is applied to your down payment, closing costs etc., once the seller accepts the offer, the closing usually takes place within 30 to 60 days from the offer date, called effective date, (this is dependent upon the turnaround time of your mortgage financing).
Step 6 – Negotiate the Deal
Many times an offer is accepted when initially submitted, however, it is not unusual to receive a counter offer which doesn’t mean it’s to be considered a turn down or a means for discouragement, it is just that the seller is looking to achieve a higher price. We will discuss the counter offer together and help you decide whether or not to accept the counter offer, submit a counter of our own, or reject their counter offer and move on. Market conditions are the key to the aggressiveness of a negotiation on a deal, therefore, we must work within our limits and not let emotions get in the way of our capabilities, it’s better to set limits prior to negotiating an offer and stick to them.
Step 7 – Good Faith Estimate
At the time of pre-approval which is done by our Company for all buyers before we start searching for a home in order to know ahead of time the amount of a monthly payment a buyer can afford, you will receive a “Good Faith Estimate” of the cost of closing on a loan. This estimate may not be completely accurate since we don’t really have the actual home pinpointed and even then, we’re estimating the sales price and we do not yet have any information regarding the taxes and insurance, which can only be obtained once we locate the property.
Step 8 – Getting a Loan
From the date of acceptance of your offer (Effective Date) our Mortgage Company will elaborate the loan application and disclosures for the specific property we now have under contract for you to sign and submit to close the loan. Since now we have a property to base our figures on you will receive a second “Good Faith Estimate” which will give you a much more accurate estimated amount of cash you will need to close and what your total mortgage payment will be every month.
The Title Company which is your closing agent will conduct a lien search to make sure there are no liens pending and if any are found to make sure and have the seller pay them all off at or before closing, additionally they will gather all other necessary property information needed to close the Loan and since you were already pre-approved before you started searching for the home, you are steps ahead of many buyers and much closer to closing. We will also be in constant contact with the underwriter to obtain any additional conditions required if any, and will work with you to fulfill any of them that might come about.
Step 9 – Move In
Congratulations! You are now a home owner! It’s time to move into your house and make it your home! Enjoy this exciting time.