10 Steps to Stress-Free Homebuying!

Dated: May 22 2024

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The homebuying process can be both an exciting and stressful time. With historically low inventory levels and the high number of investors buying properties, being prepared for the journey to homeownership has never been more important. While the idea of owning a home is often celebrated in social media posts and among your inner circle, many don’t understand the process until they experience it themselves.

Here are ten steps to help you navigate the path to owning your home:

1. Get Your Own "House" in Order

Begin by evaluating your credit standing. Obtain a free credit report from sources like MyFico.com or one of the major credit agencies to ensure there are no surprises that might have an impact on your ability to secure a loan. Your credit history plays a crucial role in determining whether you qualify for a mortgage and what terms you'll receive. Be mindful of the type of score you get, as scores for homebuying, vehicle financing, and credit cards can differ.

2. Choose a Real Estate Agent

A licensed Realtor® can guide you through the homebuying process. Prior to 2024, in most cases the seller paid the buyer’s agent and the listing agent's broker fees. Starting in the Summer/Fall of 2024, buyers may be responsible for paying the buyer's broker's commission, and sellers will only be responsible for paying the seller's broker’s commission. The buyer and seller will have to budget for those fees.  In today's market with low inventory, having an experienced agent who understands your needs and the local market is invaluable.

3. Choose Your Lender

If you can't make an all-cash offer, a pre-qualification or pre-approval letter from a lender is essential. Shop around for lenders as loan programs, costs, and rates can vary. A good loan officer will guide you through the available programs and help you find the best fit for your budget. Your down payment will affect your loan options and eligibility, so know your options early.

4. Get Pre-Approved

A pre-qualification is based on your self-reported information and is not a guarantee of a loan. A pre-approval, however, involves a thorough review of your finances and credit history, providing a higher level of certainty to sellers. Determine what you are comfortable paying each month, considering not just the loan payment (PITIA: principal, interest, taxes, insurance, and association fees) but also utilities and potential repairs. Avoid opening new credit accounts until your loan is finalized.

5. House Hunting

Work with your Realtor to define your wants and needs, such as location, home type, size, and condition. Prioritize what's most important to you, as the perfect home may not meet all criteria. Pay attention to details during visits and consider seeing homes at different times and weather conditions to get a full picture. Speak up about any concerns or questions you have.

6. The Offer

Once you find the right home, your Realtor will help you make a fair offer. Market conditions will influence your strategy, so be prepared to negotiate or make your best offer upfront. Your offer will include a proposed closing date, contingency dates for inspections and financing, and an earnest money deposit. If you need to sell your current home first, that condition will also be included.

 

7. Get a Home Inspection

A home inspection, while not required for a loan, is highly recommended. An inspector will check for issues from the foundation to the roof, including electrical, heating and air systems, appliances, and the home's structure. Use an inspector familiar with the local area and building codes.

 

8. Finalize Your Loan

Once your offer is accepted, the loan process begins in earnest. Update your lender with any required information like pay stubs and bank statements. An appraisal will be ordered to confirm the home's market value, and title work will ensure clear ownership. Obtain homeowners insurance and finalize your policy with the lender. This process typically takes around 30 days.

 

9. The Loan Closing

As the closing date approaches, you’ll receive a Closing Disclosure detailing all costs and the final monthly payment. This document must be provided three days before closing. On closing day, you’ll sign documents with a settlement agent and receive your new keys.

 

10. Move In

Finally, research moving companies and set up utilities like power, heating, and internet in advance. On move-in day, you can step into your new home and start creating lasting memories right away.

 By following these steps, you can better navigate the homebuying process and enjoy the journey to homeownership.

Blog author image

Rorey Bridgeman

Buying and selling real estate can be one of the most stressful experiences of your life. But with the right realtor by your side it can be stress-free and even exciting. That's why most of Rorey Brid....

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