Monday, August 7, 2017 / by John Lamprecht
The process of buying a home can feel daunting especially if you are a new home buyer. Follow these four steps to make sure you are on the right path to home ownership.
1. Save, Save, Save
Buying a home is one of the best purchases you can ever make. Make sure you have saved enough money for the costs involved.
- Down Payment. Different loans will require different amounts of money to be put towards the initial payment.
- Home inspections, surveys, misc. If you are not asking the seller to contribute you will need to have enough money to pay a home inspector, for any surveys or desired inspections.
- Closing Costs. These could include loan origination fees, discount points, appraisal fees, title searches, title insurance, surveys, taxes, deed-recording fees and credit report charges.
2. Find a Realtor. (Like that guy above)
You seem like a savvy person, you found this blog after all! If you're like 90% of today's buyers you started your home search online. But there is a world of difference between finding a home online and the actual purchase of the home.
Take advantage of all of the great tools a Realtor has at their disposal.
- An experienced Realtor will be able to search the market much more efficiently than your average buyer. They know of the homes that have been sold recently. They know the new homes that are coming onto the market. They even know of homes that are going to be listed but aren't yet. After all they do it for a living!
- They will be able to help you navigate the often complicated and dreaded paperwork. Do you know what a Cl-100 is? How about an FHA 203k or 203b? A Realtor knows these parts of the contract frontwards and backwards and will help you navigate them with ease.
- Never written an offer before? A Realtor has and they will be able to negotiate the terms of your offer helping you to make an educated decision based on all the factors of the home and the neighborhood.
- A Realtor will be able to provide you with all of the contacts needed to complete your purchase including but not limited to lenders, home inspectors, repair professionals and many others.
- Did you know that typically a buyer never pays a Realtor. The commission for a sale is generally paid for by a seller on a successful closing.
3. Get Qualified.
If you are purchasing a home for cash you can go ahead and skip right to number 4. For the rest of you don't miss this most important step. It's important to know the difference between being pre-qualified and being pre-approved for a loan. However you really should get pre-qualified at the very least.
- Pre-Qualification means you have spoken to a lender and provided general information about your job, your monthly income, and how much you would like to spend on a monthly basis for your home loan.
- Pre-Approval is much more in depth. Using your credit score, your employment and payment information and a variety of other items your lender will give you a Pre-Approval. This means you are one step closer to actually closing on the home of your dreams!
- Do your homework. Mortgage companies offer competitive rates on loans, however these rates are changing all of the time. Choose a lender that will work for your best interests and has an interest rate that is good for your budget.
- Make sure you are getting the loan that is right for you! Typical loans are Conventional, FHA, USDA, and VA. Each have their own advantages and disadvantages.
4. Close on your home!
Once you have had all inspections, asked for or completed all repair requests, have been approved and have set a date for closing your next step will be to close on your new home and get your keys!
In South Carolina you will need an attorney for all closing transactions. Make sure you understand all of the paperwork and read your closing disclosure. This will let you know exactly how much you will need to bring to the closing.
- Don't forget to thank your Realtor with the best gift they can receive. A referral! If they did a great job tell everyone about them and let your friends know you have the perfect Realtor who can help them out.