Steps to home ownership
Buying a home is one of the most important investments you will ever make with your time, money and effort. Knowing what to expect helps to take some of the anxiety out of making that investment.
Taking the time to be organized will help you buy with confidence.
If you are going to need a mortgage, shop for a lender first. Ask friends, relatives, co-workers or your real estate agent for recommendations. Talk to several lenders to find out what they have to offer. Different companies can write different kinds of loans and a good lender will be looking for the best type of loan for your situation. Be careful about allowing too many lenders to pull your credit report. Even though you may never taken out a loan with that creditor, to many inquiries into your credit history can potentially have a negative effect.
Determine how much home you can afford. Most reputable lenders will "pre-qualify" you for a mortgage with a phone call. This will tell you what price range to shop for a home in. This is an important first step. It allows you to look for homes that you can afford and eliminates the possible disappointment of looking at homes that are out of your price range.
Check your credit report. There are several web sites now that will allow you to check your credit report on-line. Be careful to use one from a legitimate source. If there is any misinformation on the report, begin immediately clearing that up. This will save you time with your loan application. If you need to make a loan application before it is cleared up, most loan agents will assist you in straightening out problems.
After pre-qualifying, decide if now it the time for you to buy. If it is, take the next step and fill out that loan application. Gather all of your financial information, as it will be needed by the lender. Your lender will ask you for things such as income and asset verification and tax records. Get pre-approved for a loan. This is buying power. It means that the lender has looked at your personal financial information and determined they can make you a loan. Ask them for a commitment letter. Sellers may ask for a commitment letter before accepting an offer on their home.
Choose a real estate agent. Preferably one from Teel and Waters. Ask for referrals from friend, family and co-workers. A good real estate agent will be able to find you the homes that are on the market that suit your needs. Look for a professional that knows the market area. Talk to them about your minimum requirements in a home and about the desires of your heart. They can help you determine if you are being realistic in your house hunting. Remember: no agent represents you until you decide to engage their services.
Now you can start looking for a home. The real estate agents at Teel and Waters have access to information through our local multiple listing service in all areas of Okaloosa and Walton Counties. In just a few moments, we can have a list of all current listings in your hands. We also have the capability of emailing you with new listings as they become available.
From the homes available, decide which ones appeal to you. Schedule an appointment with your agent to go look at the homes. TAKE NOTES. One mistake buyers make is not paying attention to detail in homes they may want to buy. Take notes on the homes that interest you. Write down things you like and things you might want to change. After looking at several homes, you may forget which feature you liked best about each home. This will help you narrow your search and focus your decision making process.
You found it. It is the perfect home for your family. You are ready to make an offer. Meet with your real estate agent. Be prepared to sign an offer to purchase and deposit money into escrow. The amount of the escrow deposit can be discussed with your agent. Different properties will require different escrow amounts. As a rule of thumb, $1000.00 or 1% of the purchase price is to be expected. Make sure you understand all documents that you sign. Your agent will present the offer to the seller's agent. The seller can accept, decline or submit a counter offer. Your agent will handle the negotiation process for you, based on your instruction.
The offer is accepted. Your agent will assist in coordinating the inspections, repairs, and closing details.
There are many different aspects involved in closing on a home. Most lenders require an appraisal, a termite inspection and a survey at the minimum. This helps to insure you and them that the home meets the value of the mortgage. They will also require title insurance. The title company will research the property for possible defects in the title and insure against their findings. They will also coordinate the closing for you.
You will receive a copy of a closing statement. This is normally ready one to two days prior to closing. Even though your agent should be able to give you an estimate of what it will cost you to close, this document is the final figure and is prepared by the closing office. Be prepared to come to the closing with a cashier's check for the required funds. .
Schedule a final walk through on the day before closing. Check the property thoroughly. Once you close on the property, it is yours. The seller will normally not have any further obligation for repairs after the closing occurs. If you find a problem, make sure it is resolved prior to closing.
Come to closing prepared to read and sign. Never sign any paperwork that you don't understand. The closing agent should be able to help you understand the paperwork. If you are not sure about something, consult a professional. Real estate agents are not attorneys and cannot give legal advice.
Have the utilities turned on, move in. Enjoy!