7 Steps To Buy A Home
7 Steps To Buy A Home
Seven steps to buying a home in the Twin Cities. Buying a home in Minnesota is an adventure; however, you need a plan before you dive into the housing market. Buying real estate is a journey, and the road to homeownership is rarely a straight line from point A to point B. Often the route is a winding mountain road with hills and valleys, twists and turns but worth the effort to reach the top. Having your path mapped out from start to finish will help you avoid obstacles and delays. Completing each portion of the journey before proceeding to the next will build confidence in the process. Here are my 7 Steps for a successful home buying experience.
Shop For a Mortgage
Now it’s time to find a lender. Of course, your first instinct is to secure a mortgage at the lowest possible rate. Don’t get me wrong that is extremely important. But customer service also matters. The variety of programs offered will make finding a loan that meets your particular financial situation easier.
Obtain a Pre-Approval
A mortgage banker will review your financial documents and run your credit. Then she can tell you how much you can borrow, the rate, terms, and estimate of closing costs. You are going to gather two years of tax returns, 1-2 months of pay stubs, 1-3 months of bank statements, other asset documentation, debt statements, a copy of your driver’s license, proof of residence of the last two years for your appointment. Hopefully, you will walk out with a preapproval so you can start shopping for a home.
Choose the Best Real Estate, Professional
There is no good reason for a buyer not to work with a professional when buying a home. Find one with experience, excellent online reviews, and a personality similar to your own, and let them be the guide on your home buying journey. The best real estate agents will help you avoid the bumps and the potholes in the road as you maneuver through the process of buying a home in several ways. By being an excellent resource for other professionals you may need along the way, by answering your questions about the buying process and the community, by drafting your purchase offer, negotiating terms, and working as your team leader every step of the way to the closing table, the professional’s service will be invaluable.
Choosing an agent is so important; we wrote an entire article on selecting the best Realtor.
Shop For Your New Home
Shopping for a new home is fun, and it's great that your finances are in order. Call your realtor if you see one online that you think you will like. Be the first home buyer through the house and make a quick yet informed decision.
Writing a Purchase Agreement
If you haven't already, now is when you pat yourself on the back for your wisdom in choosing a seasoned professional. Using comparative market data, your Realtor will help you craft an offer that is competitive yet protects your interests as a buyer. Your agent will submit your request to purchase to the seller, along with your approval letter from the lender and earnest money. Then you wait. While you should be excited, be aware that if you love the house, chances are someone else does too. At the least, your offer will most likely be countered or even rejected in favor of a better one. If it doesn’t work out, be ready to pick yourself up and carry on your search. It’s not unusual to lose out to a higher bidder on a desirable home in today's market.
Get a Home Inspection
Things are now getting serious. Before you agree to a long-term commitment to this house, you want to look into all the nooks and crannies with a professional inspection. It is crucial to hire an inspector that is thorough and honest. You can ask your agent for a recommendation. You should be present at the inspection, and it would also be a good idea to bring your agent if possible. You can ask questions during the process, and the inspector may also point things out to you. Warning: don’t lose a home you want by demanding the seller address every minor flaw or repair. Remember, no house is perfect, so expect at least minor issues. If a significant problem comes to light in the inspection, you and your realtor can discuss the next steps.
Complete the Loan Process and Attend the Closing
You have worked through any renegotiating post-inspection and have a signed sales contract. Hurray! You pass the document on to your lender, and events can proceed quickly from this point forward, providing you don’t hit a bump in the road. Your mortgage banker will order an appraisal, may ask you to update some personal documents, and request you shop for homeowners insurance and a title company. Once the appraisal is complete, your loan moves to the underwriting process, where there will be a deeper dive into your credit and finances. The underwriter may also ask for more documents or have questions. Once you receive approval on the mortgage, you will receive a confirmation of the closing date and a complete breakdown of costs and the amount you will need in a certified or bank check. A day or two before closing, you and your agent will do a final walkthrough of the property.
The day arrives, and you are soon to become a homeowner. The closing is like a meeting with a few people sitting around a large table. Title Insurance, check. Homeowners Insurance and Certified check. You're ready! You’re excited. Prepare to sign your name many times, and then you will receive the keys to your new home.
Other posts about buying a home in.