The Home Buying Process
So often, I get calls on homeownership, wondering about the process, who to contact and what to do. Recently, I reached out to Area West Realty who is my community leader in the real estate market in Atlanta. I spoke with Jerlyin Lewis and Nia Knowles and they provided this information.
The purchase of a home represents one of the largest single investments most families will make. The process can be intimidating and daunting for home-buyers with or without support. But with a little advance preparation, you can begin reaping the benefits of homeownership sooner than later.
“Area West Realty agents understand the importance of a home purchase, we remember the anxiety, doubt and relief felt when it was complete” says Nia Knowles (Broker). Working to make the process easier for homebuyers we have put together a list to help with your own preparation.
Steps towards purchasing your new home:
1) Are you ready to own a home?
Consider your reason for wanting to purchase. Weight the benefits and disadvantages of owning. You know your lifestyle, this is something only YOU can decide.
2) Review your credit.
The minimum credit score for an FHA, Federal Housing Administration, Loan is 580. However, each lender sets their own minimums and most are 620-640.
3) Review your savings!
The Home buying journey does include a few upfront expense (Earnest Money, Home Inspection, and Appraisal)
4) Select a Lender & get Pre-Qualified
Most consider their current banking institutions first- since you have a history with them, they should be willing to compete for your business and offer you the best rates (and services) possible. I recommend getting at least three (3) different lender quotes. Inquire about their knowledge of the local market and if there are any programs or incentives to help make homeownership more affordable.
5) Select a Real Estate Agent
A trained Real Estate professional is invaluable. This professional will not only help you save time and ease the stress of this process, but will be able to negotiate the best deal possible on your behalf. The professional you select should be able to work with your lender and provide you both with information on local programs and resources.
*Note: many homebuyers often interchange step #4 & #5. A Real Estate professional can provide you with a list of lenders to consider. However, most agents will not begin showing homes until you have been pre-qualified. This will save both parties time and eliminate frustration in viewing homes out of your price range.
6) Shop for your home!
Now the fun begins. At this point, you have selected your Real Estate agent and have discussed your home criteria (location, features, amenities and price range). Be prepared to tour homes for at least 2 hours per session. Bring a notebook, camera and open mind. Your wish list may be challenged during this time, as what we often want may not be in just one (1) home.
7) Make an offer, contract negotiations
You’ve found your dream home! Now let’s get it. In making an offer, your Real Estate agent will provide you with Comparable’s (a list of similar homes that have sold) and current market data. The Comparable data will help you decide on the best competitive offer to extend. We all want a deal- but not to be insulting! Remember, your soon to be “new baby”- may still be cherished by the current owner.
When developing your offer, your agent will discuss “Earnest Money”, or funds escrowed to show your intent of purchasing the property. These funds are credited to you at closing. The Earnest Money amount may vary. Be prepared to have $500-1000 held in Escrow.
8) Loan Process Completion
Stay calm and be patient. It is imperative to remain ‘financeable’ during this process. NO SUDDEN SPLURGES. Do not make any purchases for furniture, cars or anything that may cause your credit score and savings to decrease.
On the other side, do not make any large unexplainable deposits. If you are expecting a work bonus, this is fine- this deposit is explainable and traceable. However, if you have a “mattress fund”, leave it there until after you close. All money earned must be accounted for as your lender reviews your bank statements.
9) Home Inspection
A home inspection is priceless, the cost will range from $300-500. The home inspection will help you become familiar with the many features and details of your home, as well as disclose many unseen issues. Be sure your inspector is licensed and request to see a sample of a recent inspection report. In review of the report, look for clear photos, detailed descriptions and ensure it’s easy to read.
10) Obtain Home Insurance
Time to protect your investment! If you already have insurance on your car or apartment- start there to receive a quote. Many Insurance companies offer a discount to “bundle” your coverage.
We’ve made it! Get your pen hand ready because there will be form after form for you to sign. Closing will normally last an hour. During this process you will sign many Lender related documents. It’s natural to feel nervous and doubt your decision, but keep in mind- if you’ve made it this far you have taken all the steps necessary to ensure this is a sound decision.
Now that you know the steps to purchasing a home, you can confidently navigate this market. For more information, please email Area West Realty at Info@AreaWestRealty.com or call 404-439-1026
To learn more about budgeting, credit and personal finance, be sure to tune in http://cbsloc.al/ListenWAOK to “Financial Solutions with Rob Wilson” every Saturday from noon until 3pm.