Purchasing a home can be a stressful time especially for first time home buyers. Although this blog may help refresh buyers knowledge on purchasing their second, third, or fourth home this read is especially beneficial for the first time home buyer.
Before even searching for a home online or considering becoming a homeowner- the buyer must know what they can afford. They should pick a reliable lender such as a bank, credit union, or a highly recommended lender/mortgage broker to get a pre-approval/pre-qualified loan. I also highly recommend they sit down and go over their budget; review their income then start deducting expenses of living such as phone bills, car payments, insurances, groceries, and leisure expenses such as dining, etc…then see what is left to cover potential mortgage, taxes, home insurance, and utilities.
Another important expense the buyer should keep in mind when purchasing a home is closing costs which includes a down payment, legal fees, inspection, appraisal, survey, taxes, lender fees etc.. (minimal 4-6% of the purchase price); they need to make sure that they have enough monies at closing and after closing to afford unforeseen expenses such as repairs and maintenance as well as foreseen expenses such as furniture, kitchenware, blinds, etc…
Besides familiarizing the expense of purchasing a home it is important especially if the buyers are not working with a Real Estate Seasoned Professional to be familiar with some of the main steps prior getting to the closing table.
- Inspection: Once there is an offer and acceptance I recommend they have the home inspected by a licensed and experienced inspector prior to signing of contract to help provide information on the condition of the property and the immediate & foreseeable repairs.
- Signing of Contract: If the buyer decides they will be moving forward with the purchase of a home after an inspection they will sign the contract (provided by their attorney from the sellers attorney) with a partial down payment after the buyers attorney reviews it then the seller will sign the contract.
- Appraisal: If the buyers are getting a mortgage the bank or lender will have the home appraised to make sure it is being purchased at or below market value for reasons such as the unfortunate case of foreclosure ( i.e. if the buyer is unable to longer make payments & sell the home or neglects payments and vacates the property the lender wants to make sure they can sell the house and receive the balance of loan or make a profit when they sell).
- Survey: House will need to get surveyed for lenders, lawyers, etc…for reasons such as being informed on any and all encumbrances, structures on plot of land, setbacks, etc…
- Commitment: typically prior to extension (45 days after signing contract) buyers are to supply the sellers with a Official Letter of Commitment from their lender (stating they will provide the mortgage) then Lenders and Attorneys work on getting a clear to close then schedule closing date.
- Final-Walk-Thru at this point the buyers and sellers are ready and scheduled to close within a day or two or even a few hours; a final walk-thru of the home is conducted prior to purchasing to make sure house has been maintained since signing of contract, everything is in working condition, and the agreed furniture, personal belonging, etc… is removed from premises (unless buyers receive possession days after closing).
- Move In- Final step which I strongly recommend is for the buyers to move in and enjoy their home which will soon be filled with forever great and cherished memories!!