real estate series : 6 steps to buying a home
6 steps seems pretty simple, right? Well, it can be with the right Realtor by your side! I’ll share each of the 6 steps in detail below.
1: PREAPPROVAL
The number one step in your home buying journey is to get your finances in order and get preapproved! This is so important and an absolute MUST. You will need to work with a lender to gather documents and locate where your down payment funds will come from. It’s so important to understand your purchasing power and set clear, realistic goals because in today’s market, you have to be ready to move fast. Sellers typically won’t even look at an offer without a preapproval letter. Having this done up front shows them that you are a serious, qualified buyer. If you need to be connected to a lender, I can provide references.
2: HOUSE HUNTING
Once you have your preapproval in hand, it’s time for the fun part - let the home search begin🎉. Your Realtor will make sure to go over your wants vs. needs and must-haves, explain the current market and how this impacts you, and what to expect if you do find a home you love. Remember when viewing homes to focus on the things you cannot change, such as the lot, location, school district, etc. Things like paint color, countertops, and flooring can always be changed.
3: MAKE AN OFFER
Now that you’ve found a house you love, your Realtor will write up the offer along with any contingencies, and negotiate to get you the best deal available. With the current market and lower inventory of homes available, we are often seeing multiple offers on homes so it's important to come in strong from the start. Price is important, but your Realtor can present you with other strategies to make your offer stand out such as including your preapproval/proof of funds with lender contact info, offering more earnest money, a shorter option period, a quicker close (if possible), a leaseback, pay title policy, etc. Your Realtor will talk to the listing agent to find out what the Sellers need and write this into your offer (when feasible).
*Note* Since the supply of homes is so low, competition is fierce. It's so important to keep an open and understanding mind that we might not win every offer. I never want my clients to overpay for a house just because it's the only one available. Sometimes waiting it out makes more sense in the long run.
4: INSPECTION PERIOD
After your offer is accepted, the Option Period begins. This is usually 5-7 days and allows you to have a home inspection done. A home inspection is a must-have, whether buying new construction or an existing home. This will be a (very) detailed report on the home’s condition, and reveal if there are any non-negotiables for you. It’s important to focus on major things like roofing, AC units, foundation, etc. and not sweat the small stuff like a dirty a/c filter or missing light bulb - yes this happens. Sellers are not obligated to make any repairs, but you can certainly request to have the Seller repair certain things for you, or request money in lieu of repairs after coming up with a reasonable estimate. Your Realtor will work on negotiations for you and if you can’t come to an agreement with the Seller, you can decide if walking away is the best choice for you, or if you can live with handling the repairs. For new construction, inspections are still important because there are things the builder can miss, and you will have the opportunity to have all of these things fixed before closing.
5: FINANCING APPROVAL
Once you get through the Option Period and come to an agreement with the Sellers to move forward, your lender will order an appraisal to make sure the home meets value before they issue a mortgage. If the home appraises at contract value, your file will move forward. If the home does not appraise at contract value, there are a few options such as you asking the Seller to lower the sales price agreed upon, or you can come up with the extra cash to make up the difference in the price. If neither of these options work, you can back out of the contract under the appraisal contingency.
During this time you also need to get homeowners insurance. After the lender completes their review of everything, they will send the ‘clear to close’ and we move on to closing!
6: CLOSING TIME
Congratulations, you finally made it to closing day! You and the Seller will sign paperwork at the title company and get the keys to your new home . Who doesn’t love unpacking😂?
There are always things that come up and can go wrong during the home buying process, but having a trusted Realtor on your side ensures your best interests are protected and you always have someone working behind the scenes to get you those keys! I stay in constant contact with the lender, title company and listing agent to ensure things are moving along. If you have any questions on the home buying process, reach out and let’s talk. If buying a home in 2022 or beyond is a goal for you, we can make it happen and get you home.
Save this post for reference and always feel free to contact me with any questions!
Katie Villanueva, Realtor Texas United Realty realtorkatiev@gmail.com 713.269.6849
