Eleven Steps To Buying A House A Comprehensive Guide For Home Buyers

Dated: 12/17/2019

Views: 375

Eleven Steps To Buying A House
A Comprehensive Guide For Home Buyers

Understanding how to find and finance the perfect home for you

Buying a house requires some serious time and effort, but these steps can help make the home buying process much more manageable and help you make the best decisions possible.

Whether you’re a seasoned home buyer looking at purchasing your 5th house or you’re brand new and a first-time homebuyer, it’s very imperative to realize that there are certain steps that should be followed when beginning the home buying process.  Folks who attempt to purchase a home without a set plan in place can experience a ton of frustration, chewing their fingernails to the bone, buyer’s remorse or even worse, they are unsuccessful in closing the deal.

If you happen to be an “old pro” buyer and you are going to be purchasing your 3rd or fourth property, this guide to buying a house will be a great fortifier for you;  you’ll refresh your memory and experience.  You may even find new useful information that you haven’t seen before. If you are a first time home buyer, congrats on a new journey, this guide may end up being your best friend as you navigate the process of buying a home of your own!

Want to know more? Read on to find out more on the” ins and outs” to buying a home of your own.  I promise, this guide to buying a house, will be helpful and informative.  As a Tampa FL Realtor, from experience, I know that even veteran homebuyers can forget some steps that should be followed when buying a house, the excitement is there and there’s a lot of things happening…let this guide help you through the process.

1.) Start with Meeting with your JH Team Specialist. We’ll review the home buying process together. What you should expect, how things are supposed to go, how we work on your behalf. What is expected of you.  Having a great rock star agent will play a huge role in the overall success of your home buying process. There are a lot of important reasons to hire a buyers agent when buying a house. Hiring a great buyers agent can make the frustrating process of buying a house seem relatively simple.  Your buyers' agent is there to help you with securing your purchase financing (if needed), assist you in negotiating the best price and terms, arrange for inspections and to be your trusted advisor throughout the process. 

It’s important that you understand what to expect from a Realtor® when buying a home.  Things such as frequent communication, professionalism, honesty, and a proven track record are just a few of the most important things that you must expect from us! 

2.) Get Pre-Approved. Check Your Credit Score & History. Getting pre-approved ahead of time gives you an edge over other buyers. You’ll be prepared to make strong offers and won’t have to panic at the last minute, hunting for a loan, getting your documents in order.  Generally speaking, most mortgage lenders will require a minimum credit score of 620-640, depending on the type of mortgage a borrower is attempting to secure. Your lender will go over these types of loans and what would best suit your needs.

The world-wide-web offers tons of websites and resources out there that can help consumers monitor their credit score and history.  One of the best resources, which happens to be free, is Credit Karma.  I use Credit Karma myself to keep an eye on my credit, it's easy to use and free. Credit Karma allows consumers to monitor their credit score, the number of recent credit inquiries, the number of total credit accounts, and other important information related to their overall credit picture. However, although Credit Karma is a great start, a highly qualified professional lender will be able to delve deeper and know exactly what your situation is. We've vetted our recommended lenders and if you need a suggestion on one, I'd be more than happy to put you in contact with someone I would personally recommend, call me to discuss your situation.

So, why exactly is your credit score and history so important when you are attempting to buy a house?  First and foremost, if a buyer has poor credit that is lower than the mortgage guidelines, they won’t be able to secure a mortgage. There is hope though...at this point in time, your lender may recommend a credit repair company to help you get your numbers up to where they need to be.

Credit scores and history also may impact the mortgage interest rate you, as a buyer, are able to secure.  A buyer who has an 815 credit score is much more likely to get a better (lower) mortgage interest rate than a buyer who has a 575 credit score.

You’ll see that this step mentions getting pre-approved for a mortgage, not pre-qualified.  You guessed it, there is a major difference between a mortgage pre-approval and pre-qualification.  A mortgage pre-approval is much more desirable when comparing it to a mortgage pre-qualification.

Buyers who have a pre-approval have an advantage over other home buyers who may only have obtained a mortgage pre-qualification.  Seasoned real estate agents will urge a buyer to take the extra effort and time to get a pre-approval because it could be the difference between securing their dream home or not, should there be a multiple offer situation. I’ve dealt with this, you want to go in locked-and-loaded so to speak.  The mortgage lender you select to use for your home loan will be involved throughout the entire process of buying a house, so it’s crucial that you feel comfortable with the company and consultant you choose.

3.) Learn About The LOCAL Real Estate Market. We all know that buying a house is one of the most expensive purchases you’ll ever make, it’s a big commitment.  So, it only makes sense that you should take the time to learn about the market you’re interested in purchasing in before diving straight in.

Understanding what your money can purchase, how competitive the market is, how much homes sell for on average or median for in the area, and about the different neighborhoods are just a few things you’ll want to learn relating to your local market search.  Many buyers don’t know where to start to learn about the local real estate market.  It can actually be pretty simple if you’ve hired a local rock star buyers agent.  A veteran agent will be able to provide information or places where you can get the information you’re looking for on the local real estate market. They’ll keep you up to date and informed.

Directly below are some of the most important pieces of information you should learn about relating to the markets that you’re most interested in.

What is the current state of the market? Is it a buyers market or sellers market?

What is the absorption rate in the local market?

What are the real estate property tax rates for the local market?

What are the flood insurance requirements if any?

Learning about the local real estate market goes a long way to making sure you’re comfortable and confident with the house you’re going to buy.

4.) Now the fun stuff! Begin Shopping Online For Houses. The next step in the process of buying a house is one of the most fun and exciting.  Once you’ve gone through the first 3 steps, you’re now ready to rock that home search and begin shopping and visiting houses that are for sale and currently on the market.  The internet has made it super easy and super fun to shop for properties.

While the internet has made it easy, unfortunately, it also provides a lot of information that is unreliable.  While home shopping, it’s vitally important you’re using the right resources and websites.

Some of the most popular real estate websites include Zillow and Trulia (which is owned by Zillow), but it’s important to realize the information on these websites is often inaccurate and outdated.  The home values on Zillow, “Zestimates”, have been known to be off as much as 20% or more, so be very wary when reviewing real estate information!

The best resource to utilize when shopping for houses is your rock star real estate agent. A great agent will be able to set up a customized search that is customized specifically for you and tied directly into the local multiple listing service (MLS) or they’ll have an accurate house search on their website (I’ve got some more information on that, email or call me for more info).  For example, buyers who’re looking for properties in West Central Florida, (Greater Tampa, St. Pete, Long Key and surrounding areas) are able to use my website, which has a home search feature that is updated from the local MLS every 15 minutes. (Plus there’s more but we don’t want our competition to know what that is, call me and I'll let you in on that little secret.)

As you’re shopping for homes and deciding which homes you want to visit, always keep in mind what you actually need in a home and what you’d like in a home.  If you need a home that has at least 4 bedrooms, viewing homes with 3 bedrooms doesn’t make much sense.

5.) Go Out & Find The Perfect House for You.When purchasing a home of your own, the ultimate goal is to find the perfect house, one that you can cherish for years to come.  While it’s unlikely that the house you purchase will be thee “perfect” house, it should be dang close.

Now, what you may consider a perfect home for you is probably a bit different than the next buyer, so understanding what you would consider a perfect house for your situation is important.  By determining what you need in a home and what you want in a home during step 5, you can quickly identify houses that just won’t work for you.

If you’re looking for a property with solid bases, such as a newer roof, newer HVAC system, and newer windows, a home that will need a new roof in the next few years likely won’t be what you would consider a perfect house.  As you search for your perfect home, make yourself a checklist that you can bring to each showing scheduled with your agent.  As you walk the property, check off the absolute “must haves” that are on your checklist and if several are missing… you haven’t found that perfect home just yet. Keep in mind as you’re touring these houses what some of the most common red flag items to look for are, when viewing houses.  Things such as freshly painted areas on a ceiling, amateurish workmanship, smells and odors, and structural issues are a few things to note and keep an eagle eye out for.

An veteran buyers agent will be able to point out potential problem issues within a house that they may see while viewing homes, which is yet another reason why hiring a top agent is so critical when buying a property.  Once you find a house has met all of your necessities, you have found “zee perfect one”.

6.) Woohoo! Making An Offer On The Home. You’ve narrowed it down…you’ve got your eye on “the one”. Now that you’ve found this beauty, it’s time to make an offer.  So, making an offer may seem simple on the surface but there are actually many decisions that’ll be made.  If you happen to be making an offer on an overpriced home, it can become a bit more tricky. Or…what if the property is underpriced and you are in a multiple offer situation? What then?

One of the most important decisions to be made while making an offer is how much to offer for the house….  No one wants to pay more than they have to for a home, but it’s virtually impossible to know how little a seller is willing to take for their house.  There is a tightrope that needs to be carefully navigated, between making a strong purchase offer and an insulting purchase offer, so being cautious is important when determining the price.

It is strongly recommended that as you’re determining how much to offer for a house, you lean heavily on your agents expertise.  Ask your agent to perform a comparative market analysis (CMA) on the property, which is a comparison of recent sales in the area with some formulas involved that will get you to that price range.  A CMA can be a huge help while determining the price you’re going to offer.

Additionally, the price a buyer decides to offer for a house is not the only decision that’ll be made while making an offer.  There are many terms and deadlines that you’ll also have to include in your purchase offer.

How large of an escrow deposit should you make?

What will the closing date be?

What common real estate inspections will you include?

Do you need to ask for seller concessions?

What does paragraph 12 in the AS-IS contract provide you?

The price that a buyer offers to a seller is obviously important,  I mean, it usually has to be attractive to the seller … attractive enough to make them move. However, the terms and deadlines can also make or break a deal.  It’s critical that as you’re making your offer that you fully understand what each section of the offer means.  When making a written offer, this is another critical stage of purchasing a home where you’ll want to lean on the expertise of your rock star real estate agent.

7.) Now it’s Time to Complete Inspections That Apply. You’ve made an offer, there may be some back and forth negotiations…the price is finally agreed upon, you’re under contract…The immediate step after making an offer and having it accepted is to complete any inspections that the offer was contingent upon.  Let’s say one of the contingencies was a home inspection, there’s a certain number of days you’ll have to complete the home inspection after acceptance of the offer, usually 10-15 days.  When buying a house,  having a home inspection is a really good idea, even on new construction! (You don’t know if somebody cut corners, or installed something incorrectly…even in a new build)

If your offer was contingent upon any other inspections, you must have these inspections completed within the specified amount of days in the contract otherwise you potentially could lose out on your perfect home.  Other popular inspections to consider when buying a home include a septic inspection, pest inspection, wind mitigation, and structural inspection.

8.) Complete Formal Mortgage Application & Work Closely With Lender. After the inspection period is completed and any additional negotiations are made, your next step is to complete the formal mortgage application with the lender.  At the time of application, you’re going to need to provide many important documents including your previous two years tax returns, recent bank statements, recent pay stubs, and also details of your employer so a verification can be completed. At this point, you’ve already been talking to your lender as advised previously…so most of this is done. But your lender may continue to request documentation, this is normal.

During the formal loan application stage, you can also expect to pay for the appraisal, which is one of the upcoming steps to buying a house.  During this step, you’re also going to have the opportunity to lock in your interest rate and you’ll be ready to rock n roll.

Most buyers don’t understand the importance of the mortgage rate lock and skipping this can potentially be a big mistake…right in the wallet.  Make sure that you ask your lender about rate locks and understand what it means to you as the borrower if the lender doesn’t explain it to you.

Once you’ve formally applied for your mortgage, don’t think you are done interacting with your lender.  Over the next 30 days or so, your lender is going to request specific documents to meet conditions that your mortgage commitment is contingent on….it feels like an invasive process but it’s worth it! Keep your eye on the prize.

It’s common for mortgage lenders to request additional updated bank statements, updated recent pay stubs, and letters of explanation on items that may appear a little questionable on a credit report or large deposits into your bank account.

It’s vitally important that buyers stay in constant contact with their lender to make sure they have all the documentation they need, in a timely fashion and also to make sure they provide any requested documentation to the lender as soon as possible.  Not providing documentation in a timely fashion is a surefire way to delay the closing on your home….and nobody wants that.

9.) Appraisal Is Completed. Lenders will arrange for an appraiser to provide an independent estimate of the value of the house you are buying. The appraiser is a member of a third party company and is not directly associated with the lender. The appraisal will let all the parties involved know that you are paying a fair price for the home.

There are a few ways that an appraiser can determine the value of the property with the most common being the comparison approach.  This is similar to a real estate agent completing a comparative market analysis.  The comparison approach compares the subject property to at least 3 recent sales in the area, while making adjustments if necessary.  The comparison approach typically only use properties sold within the past 12 months which provides an up-to-date picture of the current market.

As for any apparent safety issues that an appraiser will be on the lookout for, they will note things such as peeling paint, broken windows, missing handrails, roofs in poor condition, and a handful of other potential safety problems and/or issues.  Houses appraising for less than the sale price and appraiser cited safety issues are the two most common issues resulting from a appraisal.

10.) Now We Are Down to Brass Tacks…Perform A Final Walk Through. Once a closing date and time is set with the title company and steps one through nine have been completed, the next step to buying a home is to perform the final walk through. This is a step that some buyers decide to skip… don’t skip it.

The final walk through in real estate should not be confused with a home inspection.  The final walk through is the buyers right to walk through the house one last time to ensure things are like they were when they wrote the purchase offer. The appliances and anything that was included in the contract to convey with the purchase are all still there.  The final walk through also provides you with the opportunity to make sure any repairs that were agreed upon from any inspections have been completed and done.  At the time of the final walk through, an experienced buyers agent is going to recommend testing the HVAC systems, plumbing, lighting, just in case there are any discrepancies after the closing. If there are issues at the final walk through, it’s fairly common to see a credit given to a buyer so that the closing can still occur.

11.) Go To the Closing To Obtain The Keys To Your New Home!!! Closing day is here, yay!  Buying a house is one of the most thrilling events in life and closing day is when you’ll receive the keys to your new home sweet home.

At closing, you’ll be signing quite a few documents that finalize the sale of your new house. Understanding what to expect at a real estate closing is a good idea and make the closing seem much less stressful.  Make sure before closing that you understand exactly what documentation and identification you’ll be required to bring with you.

Once all the documents have been signed, if the purchase offer indicated you’d receive possession at closing, you’ll receive all the keys to the property right there on the spot.  Again, congratulations, you’ve completed the purchase of your new abode!

Final Thoughts

Buying a house, as you can see, involves a lot of time, preparation, work, and execution.  It is worth every bit of the time and effort you’ll put into the process…this is YOUR home now!

Are you thinking about buying a house in West Central Florida or the Greater Washington DC metro area?  Following the 11 steps that are discussed in this blog will make your experience much easier and more enjoyable.  If you don’t have an experienced Tampa Bay area or Greater Washington DC Metro Real estate agent, contact me so we can discuss your home search and goals.  Each and every year, I have had the distinct privilege of helping families and investors buy properties and I’d love to help you too!

Cassandra Eckert
Realtor / USN Veteran
Josh Hanoud Team - Tropic Shores Realty
Cell 352-232-9107

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Cassandra Eckert

Cassandra has a vast number of years experience in nearly every aspect of the Public Relations Industry and has brought that experience to her career in Real Estate. Cassandra has no limits to the buy....

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