READY TO BUY: Ten Steps to Buying A Home
There are a number of factors that can affect the ease and timing of buying your home. Today, we’re sharing the ten universally applicable tips for most homebuyers during the initial stages of their home buying journey.
1. Determine Your Readiness.
Since you’re reading this, you’ve likely already decided (or are at least heavily considering) that purchasing is a good option for your finances and your family. Your current financial situation will be a major factor in this decision since the costs of home buying and homeownership are vital considerations in determining whether or not you are ready to take the plunge. Factors you should consider are your current income, your savings, your debts, and your credit.
2. Become An Optimal Mortgage Candidate
To secure a mortgage, you’ll want to make sure your finances and credit are in excellent condition. Try to pay off and/or pay down your outstanding balances on credit cards, car loans, etc. This will improve your debt-to-income ratio and likely improve your credit score. A better credit score will mean a better rate offer, with the best rates being offered to those with a credit score of 700 or higher.
3. Get A Pre-approval Letter
Your lender will appoint a loan officer to you. The loan officer will review your finances, including things like your debt-to-income ratio, your savings, your credit score, and your tax returns, among other documents and considerations. The loan officer will then determine a specific loan amount you will qualify for and what (and how many) mortgage programs you qualify for. They will issue you a pre-approval letter which will serve as confirmation of your buying readiness when you are ready to make an offer on a home.
4. Determine Your Budget
Your pre-approval letter will inform you how much a Lender is willing to lend you based on your credit, income, debt, and other factors. However, how much you can actually afford is a personal decision only you can make when considering how much you’re actually comfortable spending each month.
5. Find a Real Estate Agent
A local real estate agent has access to multiple listing services and insight into the specific market you are looking to buy in. They have the experience and knowledge to help you navigate the market, the negotiation, and the closing process. While they are not required, they can make the entire process much easier for first-time home buyers.
6. Select A Property
After viewing properties, you’ll be able to determine what you really want in a home. What you truly like and dislike and what will and will not work for your family. Keeping a line of open communication with your agent will aid them in selecting properties that will fit your dream and suit your preferences and lifestyle. Once you’ve selected a property you can see you and your family living in, it’s time to make an offer!
7. Make An Offer
Making your offer can be a delicate process. The current market conditions, time of year, work needed on the home, and length of time the home has been on the market can all have an affect on the terms of your offer. Of course, your own budget has significant weight in determining your offer as well. Keep in mind that price is not the only thing you need to consider and negotiate in your offer. Other things to consider include repairs or updates to the home, lawn maintenance, appliances, and even the downpayment and closing costs.
8. Sign A Purchase Agreement
Once you and the seller (by yourselves or through your agent(s)) have come to an agreement on the offer, it is time to sign the Purchase Agreement (or contract). Before signing, make sure any and all terms you negotiated during the Offer are included. If it is not written and signed, it is not binding on any party! The Purchase Agreement, along with your down payment, will be sent to and held by your closing attorney to review and adhere to throughout the contract.
9. Inspect The Home
A Buyer’s Inspection of the home is the customary next step following the signing of the Purchase Agreement. This is your opportunity to receive a professional opinion on the condition of the home, including any red flags such as damage, pests, and/or structural issues. Depending on your contract, your Seller may be required to remedy these issues prior to closing. Once you close, it will likely be too late to fix these types of issues or receive any type of compensation from your Seller due to undiscovered issues that would have been discovered had you completed the inspection.
During this time, you will also have the right to have your title examined by the closing attorney if they do not require a title exam to close through them. Do not waive this right by not affirmatively requesting a title search on your property! This will potentially reveal any title defects such as interests that were never disposed of in the past, liens, and even hidden mortgages or fraud that your sellers may not even know about. All of these can affect your title as the homeowner and you should know about them so they can be remedied prior to closing on the property when they will become your problem. A title search will also reveal the opportunity to obtain a homeowner’s title insurance property to protect the investment in property ownership you are making.
10. Close Your Transaction
The closing process can require several weeks, or even longer, depending on a number of factors such as mortgage requirements or clearing title issues found during the title search. Yes, even if you are in a cash transaction, it may still take some time to clear the title.
If you are using a Lender to fund your transaction, during this period prior to closing, the “escrow period,” you will work with your lender to secure your mortgage. Your Lender will likely ask for a litany of documentation and signatures. Make sure you are responsive to all calls and e-mails and promptly provide documentation when requested. Prompt response and provision will aid in avoiding unnecessary delays in closing on your home.
The same can be said for your closing attorney and real estate agent. Make sure to return calls and e-mails and provide any information that may be requested as quickly as possible. If you have a question, call or e-mail and ask. Do not go into the process unnecessarily blind!
Prior to the closing date, confirm the amounts of any funds you will need to provide to close. If any of those amounts are over $5,000.00, Georgia law requires those funds be wired to the closing attorney, so make sure to order your wire at least one business day prior to closing so that the closing attorney can see the funds first thing the morning of closing. This is especially important if you are closing prior to or immediately after the banks open for the morning. Your closing attorney cannot and should not close without the funds to do so.
As a closing attorney for more than a decade, we’ve seen the ups and downs of the homebuying process. We continue to refine our procedures and processes to deliver a seamless buying, selling, and refinancing experience for all those that sit at our closing table. You, too, can experience the difference when you are ready to lock in your legacy and close with Your Hometown Attorney!
Ready to close? Call us at 706-359-3332 or e-mail us at clientservices@turnerjoneslegal.com to get started!
