Step 1, Get Your Finances in Order
- Your credit reports are an ongoing look at how you manage your finances. You must know exactly what your credit reports say about your financial history before you apply for a mortgage, because the reports play an important role in the mortgage approval process and in determining the interest rate and other loan terms that a lender offers you.
- If you haven’t looked at your credit reports, you might be surprised at their contents, because errors are common.
Step 2, Get Familiar with the Mortgage Industry
- Finding the right loan and lender is crucial to your home buying success. The more educated you become the better you will come out. Be sure to find a mortgage professional you feel makes you informed about every aspect of your loan and what you are getting into.
Step 3, Get Pre-Approved for a Mortgage
- Do you know how much house you can afford? Probably not, unless you’ve talked with a lender.
- Pre-approval helps you in other ways. Consider this scenario. A home seller gets two similar offers. One is accompanied by a letter from the buyer’s bank that states she is pre-approved for a mortgage in the amount of the offer. The other has no supporting documents. Which offer do you think the seller will consider first.
Step 4, Determine Your Wants and Needs
- Buying a home isn’t as difficult as you might think, even if you’re short on funds, but the process will go a lot smoother if you get familiar with your real estate market and narrow down your wants and needs before you start looking at houses.
Step 5, Learn to Work with Real Estate Agents
- Real estate agents represent buyers, sellers, or both–and in some states they can work as neutral facilitators for either party. It’s essential to understand agent duties and loyalties before you make that first phone call. There is no charge to the buyer for the services of a real estate professional it has already been negotiated by the sellers agent. Also be sure to bring your own agent as the seller’s agent generally only works in the best interest of the seller and expects to split the commission on the house anyway.
Step 6, Start Searching for a Home
- Your agent will give you multiple listing sheets to study. I’m sure you’ll also pick up House For Sale magazines and read classified ads in your local newspapers. You’ll probably spend time surfing the Internet for homes. You might even plan afternoon drives to preview neighborhoods. Those are all excellent ways to see what’s available. Here are some tools to help you narrow your home buying search.
Step 7, Handle Pre-Offer Tasks
- Deciding whether or not you want to buy a house involves a look at its structure and its features, but there are many other topics that are every bit as important to your purchase. Be sure to discuss these with your agent.
Step 8, Make an Offer
- If you have found the house you want, it is finally time to make the offer This can either be accepted as is and start the nest step or it can be the beginning of the negotiating process. Your agent will be invaluable if you do require negotiation as they are very experienced at helping you see tools you didn’t realize have.
Step 9, Home Inspections and Other Tests
- In some cases, home inspections are accomplished before the final purchase contract is signed. In others, inspections take place after an offer is finalized. No matter when you do them, it’s critical to decide which inspections and tests you want to perform. Talk with your real estate agent or other advisor to find out when inspections should be handled and if additional types of testing are important for your specific area.
Step 10, 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. Although frustrating this is common and if handled correctly is nothing to concern about.
Step 11, 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, the event that transfers ownership of the property to you. Generally the day after you sign
the transaction will record and funds will be dispersed. You are now a homeowner!