Home ownership has often been called the greatest “accidental investment” you’ll ever make. However, we believe that if done right and with the proper guidance, home ownership becomes an “intentional investment” that can lay the foundation for financial freedom, security, and stability. There are several reasons to support your decision to buy a home. Building equity, value appreciation, and tax benefits rank pretty high among them.
Base your decision on facts. Not myths.
- If you’re paying rent, you more than likely can afford to buy.
- The lack of a substantial down payment won’t prevent you from buying your first home.
- Having a less-than-perfect credit score won’t actually stop you from buying your home.
- The best way to buy your dream home is to buy your first home now.
- Buying a home doesn’t have to be complicated. It’s what we’re here for.
HIRE A REAL ESTATE AGENT.
The typical real estate transaction involves over a dozen of separate individuals. Including buyer’s agents, seller’s agents, bankers, insurance accessors, mortgage brokers, various underwriters, inspectors, appraisers, escrow officers, title researchers, and a number of other individuals who need to be harmoniously orchestrated together to close a home. The responsibility to coordinate this orchestra rests on the shoulders of your real estate agent, advocating for you and your interests throughout the entire transaction. It’s no easy feat.
Roles of your real estate agent include:
- Educating you about your market.
- Analyzing your needs and wants.
- Guiding you to homes that fit your criteria.
- Synchronize the work of other required professionals.
- Negotiating on your behalf.
- Triple-checks documents and deadlines.
- Solving any problems that arise.
Qualifications are important. And thus, finding a solid real estate agent means going beyond the basic resume, and into what makes them a fit for you. Some questions worth asking:
- Why should you work with them?
- How did they get into the business of real estate?
- How are they different from other real estate agents?
- Can you provide me with testimonials and references from past clients?
- How will you help me find the right home for me?
- What can go wrong? How will you handle it?
- What are some mistakes people make when buying their first home?
- Who do you suggest we work with?
MONEY TALKS. SECURE YOUR FINANCING.
While the thought of home ownership can be thrilling, the thought of taking on a mortgage can be downright chilling. For many first-time home buyers, the purchasing process can be confusing and at times, stressful. For most, this can be their first time making a financial commitment this large. From start to finish, there are about six basic steps to financing a home.
- You’ll need to choose a mortgage broker. We can recommend a few.
- Submit a loan application and for preapproval.
- Determine what you’ll want to pay, what you can afford, and select a loan option.
- Submit an accepted purchase offer contract to the lender.
- Get an appraisal and title commitment.
- Obtain the funding you’ll need at closing.
FIND YOUR HOME.
Often times, we think that shopping for a home starts with jumping in a car and driving around town looking at houses. And although this part of the home buying process is quite possibly the most exciting part, it’s only fun for so long. The excitement can fade fairly quickly if weeks go by without finding what you’re looking for. For that reason, we say that looking for your home begins first with carefully assessing your values, needs, and wants, both for the short term and long term.
Some questions to ask yourself:
- What do I want my new home to be close to?
- How much space do I need/want and why?
- Which is more important, location or size?
- Would I be willing to fix a fixer-upper?
- How important is home value appreciation to me?
- Is neighborhood stability a priority?
- Would I be interested in a condominium?
- Is new home construction an option?
- Do I want any particular features or amenities? Which one’s do I actually need?
MAKE THE RIGHT OFFER.
Approaching this part of the process with a cool head and a realistic perspective of your market is key. There are three basic components of an offer: price, terms, and contingencies. The right price to offer should fairly reflect the true market value of the home you want to buy. The other financial and timing factors that are included in the offer are your terms and contingencies, falling under six basic categories.
- Schedule: events that need to happen before closing.
- Conveyances: when the sellers leave, these are the items that are left behind.
- Commission: real estate commission or fee for the agents who work on the deal.
- Closing cost: fees paid at the end of the real estate transaction.
- Home warranty: coverage for replacement or repairs of appliances and major systems.
- Earnest money: this protects the seller from the possibility of the buy unexpectedly leaving the deal and makes a serious statement of your offer.
PERFORM DUE DILIGENCE.
Unlike most purchases in life, once you’ve purchased a home, you can’t return it if something breaks or isn’t quite working the way it’s supposed to. This is why homeowners insurance and property inspections are so important. Home owner’s insurance policies protect you in two ways:
- Against loss or damage to the property itself.
- Liability in case someone sustains an injury while on your property.
Property inspections of a home should shed light on any issues that a home might have, that way you’ll know exactly what you’re getting into before you sign at closing. Structural damage is going to be your main concern. Don’t sweat the small stuff, they’re likely easily fixed and can be overlooked. If an issue should arise during an inspection, it’s recommended to bring in a specialist. Worst case scenario you can walk away. CLOSING. The final stage of the home buying process is confirmation of the home’s value, legal statute, and your continued creditworthiness from your lender. This final process includes a survey, appraisal, title search, and a final check on your credit and finances. You’ll have a few pre-closing responsibilities:
- Stay on top of your finances. No impulse buying.
- Returning all paperwork and phone calls as soon as you can.
- Keep open communication with your agent. And don’t fall off the face of the earth.
- Before closing, make sure all your needed documentation is in order.
- Obtain the funds required for closing. Legally.
- You’ll want to do a final walk-through as well. Just in case.
On closing day, with guidance of a settlement agent and your real estate agent, you’ll sign documents that do the following:
- Finalize your mortgage.
- Pay the seller.
- Pay closing costs.
- Transfer the title.
- Make arrangements to record the transaction as a public record.
- As long as you have the right expectations and follow directions, closing should go smoothly without a hitch. Marking a new chapter in your home-owning experience.
PROTECT YOUR INVESTMENT.
Paying attention to the maintenance needs of your home is essential to protecting the value of your investment. And fixing small problems early on will definitely help save you money and time.
Home maintenance essentially falls into two categories:
- Keeping it clean: Performing the required routine maintenance needed.
- Keeping an eye on it: Watching for signs of leaks, damage, and wear and tear.
Odds are that throughout your first home buying experience, you’ve probably created a relationship with your real estate agent. There’s no reason to throw this new-found relationship out the door now that your deal has closed. Believe it or not, your agent more than likely wants to keep in touch with you. Even after you close on your house, your agent can still help you with quite a bit.
- Help handle your first tax return as a home owner.
- Finding the right contractors to help with remodeling or maintenance.
- Help your friends and family find a new home as well.
- Keep track of your home’s current market value.
As promised, a crash course to buying your first home. If this was helpful to you, we would love to hear about it – leave us a comment bellow. And if you’ve decided to purchase your first home, get in touch and we’ll go through the process together.
We’re not your typical Orlando Realtor. We’re a real estate team consisting of different talents, strengths, and backgrounds. Coming together to achieve a common goal. Helping you.