How our tried and true process helps home buyers meet their goals.
Making the decision to buy a home is an exciting and significant milestone regardless of your phase of life. The process can be daunting, especially for first-time homebuyers. We have a proven process that has helped hundreds of our clients successfully find homes that meet their goals.
1. Understand your goals and the ‘why’ behind them.
We meet with decision makers for an in-depth discussion about what is important to you, the concerns and questions you have, and most importantly the WHY the underlines all of your goals. With this helpful insight, we get to work to help you reach your goals.
2. Determine Your Budget
Before diving into the world of real estate listings, it’s crucial to establish a realistic budget. Consider your current financial situation, including your income, savings, and outstanding debts. A common rule of thumb is that your monthly mortgage payment should not exceed 28% of your gross income. Additionally, factor in other homeownership costs, such as property taxes, insurance, and maintenance.
3. Qualify with a Lender and Maximize Your Buying Power
Before you start looking at homes, you must get pre-approved for a loan so you know how much house you can afford and avoid underwriting surprises like these:
- An unknown blemish on your credit report
- Employment verification challenges
- Insufficient tax return income verification
- Liens or judgments against you
- Child support questions
To get pre-approved, thoroughly discuss these factors with a lender:
- Income (1099 vs. W-2)
- Assets and credit history
- Budget parameters
- Approval amount
- Down payment
- Closing costs: appraisal fee, loan origination fee, title insurance and escrow services
- Loan options: ARMs, conventional, doctor loans, FHA, VA, rural housing Trade-offs: cash down, interest
Understanding your mortgage options puts you in a strong negotiation position with the seller by leveraging each element of the deal. For example, if you don’t know the difference between closing costs and down payment, you could over or underestimate your buying power.
4. Tour Homes
There is no such thing as a perfect home. With hundreds of homes to choose from, how do you know which home is right for you? We have a process for that! It starts with an in-depth interview where we discover what is important to you and why. Because we want to show you homes that meet your unique needs, wants, and wishes. Here are some helpful tips to make your home tour more effective:
LEAVE YOUR LITTLES HOME. If you have young children, please arrange for a babysitter to watch them while you walk through homes. You’ll want to fully focus on potential homes, not your curious kids. We understand sometimes things happen, and a babysitter may not be an option. In that case, please bring snacks and activities to keep your kids feeling content during your tours.
KEEP GOOD NOTES: When touring multiple properties, it can be challenging to remember which features go with which homes. I’ll provide you with property information sheets to help keep your notes straight. We’ll even recap our conversations for you if you like and send them by text or email.
5. Negotiate the Contract
Once you have received the right information from your lender and have found the right home, it’s time to put the right terms in place for your contract. Before we draft your offer, we will guide you through the process of defining the offer elements that matter most to you in negotiating your contract, including these five elements:
- Price, Earnest Money, Terms, Dates, Inclusions/Exclusions
The typical agreement includes these documents:
- Real Estate Purchase Contract (REPC)
- Addenda outlining additional terms of the contract
- Lead-Based Paint Addendum if the home was built before 1978 (LBP)
- Buyer Due Diligence Checklist
6. Deliver Your Earnest Money and Schedule Your Inspections
Once you’re under contract, you’re one step closer to getting the key to your new home, but there is still a lot of work to accomplish by specific due dates. But not to worry, we’ll guide you through the process step by step to meet these important deadlines and close on your home on schedule to avoid losing your earnest money.
Due Diligence Deadline: Prior to 5:00 p.m. on the Due Diligence Deadline, we need to resolve any issues or concerns with the seller. Schedule your home inspection. You’re welcome to use any inspector you like, and we would be happy to recommend one of our trusted partners as well. Review the seller disclosures, HOA documents (if applicable), and the title report. Discuss any other questions that come to mind about the property. It is very important to meet the due diligence deadline.
Finance and Appraisal Deadline: Your lender will order the appraisal and complete final underwriting. Working with your lender, you must obtain final loan approval by this date or risk losing your earnest money.
Settlement/Closing Deadline: You must sign your loan documents by the settlement deadline at 5:00 p.m. Unless otherwise negotiated, you’ll receive keys to your home the business day after signing papers.
7. Prepare for Settlement
Complete your final walkthrough. During the week before you sign papers (your settlement), we will schedule a final walkthrough of your new home to ensure that no significant changes to the property have been made without your knowledge. We will also confirm the seller has completed any repairs as agreed upon.
Schedule your closing. There should not be any surprises on settlement day because we will review the final numbers together three days prior to your settlement. Your costs will be very similar to what your lender discussed to you when you applied for the loan. Next, we’ll coordinate your schedule with the escrow officer and lender to meet at the title company to sign the papers for your new home.
Change your address and setup utilities. If you haven’t transferred your utilities and mail to your new address, now is the time to do it. Also, if your pet is chipped, remember to change their address, too!
Schedule your movers and cleaners. You can stay focused on packing boxes while we schedule moving partners and cleaners for your new home.
