Buying a Home2

The Process of Buying a Home

STEP 1:  Contact a Lender – We strongly urge that all buyers speak with a lender BEFORE starting to tour homes.  Here are some reasons why:

• • Set your expectations appropriately.
    If you’re only able (and/or comfortable) spending enough to buy a $300,000 home, you shouldn’t be looking at $500,000 homes.  There are plenty of wonderful homes in the $300k range, but compared to $500k homes you’re likely looking at a little less space, less amenities, or perhaps a location further from the city.  If you start looking at $300k you’ll fall in love, but if you start at $500k then adjust to $300k you’re bound to be disappointed by the comparison.
  • Learn about your credit score.
    If there are any issues, you need time to address them.  Especially if they are unexpected and unpleasant surprises like an unpaid bill that you never knew about or identity theft!  Your lender can guide you how to correct those items, but it does take time.  And often it’s not enough time if you are already in contract and have only a few weeks to close!
  • Learn about the cash needed for settlement.
    Based on your home budget, the lender will give you an estimate of the monthly payment as well as the cash you will need to bring to settlement.  Knowing this up front gives you time if you need to/want to save a little more, or move funds out of other accounts (eg. withdrawing funds from a CD or investment account can take time.)  If a family gift is part of your plan, your lender can let you know what type of financing allows for gifts, and what documentation you need to collect.
  • Be ready for a competitive situation. 
    The market in our area is pretty competitive.  There is not a lot of inventory, so most homes sell quickly and buyers are often running into multiple offer situations.  If you want to be able to act quickly and write an offer right away, you should already have a pre-approval letter in hand.  One of the first things listing agents do is call lenders to verify a buyer’s financial strength and timing – especially when they are comparing multiple offers with their Sellers.  Plus you’ll have a leg up on the competition who aren’t as prepared as you are!

STEP 2:  After your lender’s pre-approval, your Realtor can coordinate showings of local active listings.

• • • Determine your criteria
      There are so many factors that go into choosing your new home.  Before you start looking, make a list of realistic criteria like the size, style, and amenities of a home that will fit your needs.  Remember that more home means more maintenance and utility costs, so factor that in to your decision.  When deciding location, consider commuting drive time and proximity to places where you spend your personal time.  Also keep in mind wants vs. needs – it’s unlikely to find a home that has EVERYTHING on your wish list, so remember there may be some trade offs.
    • Find your Realtor
      Realty Advantage has access to every home for sale in Maryland, DC and Virginia. As a full-service agency, our Realtors can arrange for tours of any active property that meets your needs.  Experienced agents can make all the difference with your next home purchase. Once you’ve found a home you like, Realty Advantage will negotiate to get you the best price and terms.
    • Search Active Listings
      Do some research on homes in your approved price range in your target area.  Generally, the further you go outside the city, you can afford more home/yard, but ultimately you’ll need to weigh the options to find the right home for you.  Make sure to provide feedback to your Realtor about what you are looking for, and what homes you’ve ruled out so that they can help you narrow your search.  Realty Advantage has access to thousands of Active Listings, so once you’ve come up with a list of homes that fit your criteria within your price range, contact your agent to schedule some showings!.

STEP 3:  Your Realtor will help prepare and negotiate offers and ultimately help you ratify a Contract!

• • • • • Offers and Contract Paperwork
          Our Realtors will help guide you through the complex paperwork and negotiations that are required for an offer. After you have an offer accepted, they will assist you throughout the complicated Contract process.  Your Realtor will help you navigate the process starting with the Contract and EMD all the way through to Settlement.
        • Contingencies and Deadlines
          Your contract will likely include several contingencies for your protection.  Common contingencies are Financing, Property Inspections, and HOA/COA Document Review. Each contingency has different requirements and different timelines, so you need to be especially careful you understand the Contract terms.  Your Realtor can help you stay on top of these crucial deadlines.
        • Coordinating with the Title Company & the Lender
          While the contract process is ongoing with your Realtor, you will also work closely with your Lender & Title Company.  They will help ensure the loan and title processes run smoothly in time for settlement.  Throughout the transaction, you will be asked to promptly deliver information and documentation to both the lender and title company.  In addition to processing the loan and title work, they will also be coordinating a property survey and an appraisal of the home.  All of these important steps must happen timely for the transaction to close on time.  For this reason, you should ensure you are using established, reliable partners.
        • Final Walk Through & Settlement
          A few days before Settlement, the title company will let you know what amount of funds you will need to close the transaction.  Be aware there have been instances of wire fraud, so you should call the title company directly to get wire instructions before delivering any funds.  Just before closing, you should conduct a final walk through to ensure the home is in the same condition as when you agreed to buy it (per your contract), and that any agreed upon repairs have been made.

Realty Advantage is excited to be involved in helping you find your next Home! For help getting started, contact our office today!