Congratulations! You have made the decision to buy your first house. While this can be a scary and confusing time, it does not need to be. For most people, owning a home is the biggest investment they will ever make in their lives. For this reason, it is extremely important that you have someone walking you through the process to make sure you are protected.

Step #1

Get Pre-Approved for financing! This does not mean Pre-Qualified. What’s the difference? It’s simple. A “Pre-Qualification” means that you talked to a Lender and told them what your income is, and maybe gave an idea of what debts you have. None of this information has been verified. A “Pre-Approval” means that you have completed a mortgage application, the Lender has verified the information to be correct, and the Lender has pulled your credit. There is a very big difference between these two, and as you can imagine, a Pre-Qualification Letter is junk.

Keep in mind though, having a Pre-Approval Letter does NOT mean that you have been APPROVED for a loan. In order to get approved, you need to locate the property you want, have an accepted offer, have the required inspections performed, and have a satisfactory appraisal of the property. Once all this is completed, your file will then go through the banks underwriting process for formal approval.

There are several reasons that getting a Pre-Approval Letter is important…

1. You will know what your price range should be, and what you are comfortable spending.
2. You will know what type of loan you qualify for. This will make a difference in the type of home you are looking for.
3. When it comes time to make an offer on a home, the Seller will know that you are a serious buyer, and will be more likely to negotiate.
4. You are not getting your hopes up for something you can’t have, and in the mean time wasting everyone’s time.

If you need some additional information on where to go to get Pre-Approved, just let me know.

WARNING… Do NOT go to multiple places and apply for a loan. Each time your application is run, your credit will be pulled. Every time your credit is pulled it effects your overall score. If you already have a border line credit score, this can kill your chances at qualifying for a loan.

Step #2

Find a Realtor. The key here is finding a full time Realtor you like, trust, and are comfortable with. What’s the best way to do this?

1. Talk with friends and family who have bought or sold a house within the last year.
2. Each real estate office in your area should have a website. Usually these websites contain information regarding all of the Realtors that work there. Read through this information and see if you can find someone you have something in common with. Don’t hesitate to make some calls to these Realtor’s and ask questions, kind of like an interview.

Why do you need a Realtor? Buying or selling a property can be a very tricky process. You need someone to walk you through the process, and explain/address any issues that arise. There will be issues that arise! A good Realtor works full time, is well respected within the community, and knows the market well.

Step #3

The search begins. While in most cases this can be a lot of fun, it can also be stressful. In most cases, there will be certain items that you may need to compromise on. There is NO such thing as the perfect house. Keep in mind these 3 things… Lot, Location, & Layout. These are the 3 things you can’t change about a home, so if you are not happy with these 3 things, then it’s time to move on.

Be respectful. This applies to your Realtor and home owners. Expecting to see properties at the last minute is not realistic. Your Realtor has a schedule to keep and a life besides you. Home owner’s also need time to prepare their home for a showing.

Don’t be unrealistic. If you feel the need to see 50 houses before making a decision, something is wrong. Stick to what your needs are and you should have no problem finding the right house. Today’s market is competitive, so it may not happen over night, just be patient.

Step #4

Making an offer. This can be the scary/confusing part, and where the knowledge of your Realtor will be most useful. Because the current market is so competitive, your Realtor should be able to educate you on what can all happen. When making your offer you will need to decide not only what price to offer, but what terms are best. For example…. Inspections (required and not required), Closing Date, Closing Costs, etc. Keep in mind, just because a seller is asking “X” for their house, does NOT mean it’s actually worth it. A seller can ask whatever they want. It’s up to you and your Agent to do the necessary research to determine if the price is fair. If you are in a multiple offer situation, no other buyer will know what your offer is, and you will not know what theirs is. Therefore, it’s very important to put your best foot forward to beat out the competition. With all that said, you still want to make sure you are getting a fair deal and are not overpaying for a house.

Step #5

Closing day. Congratulations, you made it! This is the day that you get the keys to your new home. Getting to this day can sometimes be stressful. There are several surprises that can arise along the way. Rely on your Realtor to help get you through.

If you have any additional questions about the home buying process, please do not hesitate to reach out to me. I would be happy to meet with you an answer any questions you might have.

~ Keith