Steps To Buying A Home

1. Decide what kind of home are you looking for. To help your realtor and facilitate your search, it is best to have an idea of what kind of home you are seeking. What kind of neighborhood do you have in mind? Do you have a preference for new construction versus something older? What style of home appeals to you? What size and layout? Do you want a fixer upper, or something in move-in condition? It is also helpful to come up with a list of items that are negotiable and a list of items that are non-negotiable.

2. Get your finances in order. Once you decide what kind of home you are looking for, you have to figure out how much you can afford. To do this, have a mortgage broker preapprove or prequalify you for a loan. If you do not have a mortgage broker, your realtor will probably be able to refer you to one. However, you should feel free to shop around.

In addition to helping you figure out your price range, this step will often give you an advantage when you find a home you want to bid on. It will signify to the seller that you have gone through a credit check and that a lender is willing to work with you. If a seller receives to identical offers, one from a buyer who is preapproved and one from a buyer who is not, chances are he or she will prefer to work with the preapproved individual.

To avoid getting turned down for a loan, and to get the best interest rate possible, it is a good idea to know what your credit report says, and take steps to fix any problems, before you approach your mortgage broker.

3. Find a home! Using your wish list as a guide (see Step 1), you realtor can do some initial investigating and provide you with list of potential properties to review. Together, you can visit the top contenders. Your realtor can also alert you to new listings that meet your criteria by email, phone, or fax. You can also search listings by yourself using a tool such as our *on-line search*. Reading local classified ads and real estate magazines and driving or walking through your favorite neighborhoods can also yield promising leads. If you find a property that piques your interest, just alert your realtor and he or she can arrange a visit. As you view different homes, let your realtor know what you like and what you dislike, so he or she can find better possibilities in the future.

4. Bid on a home. When you have decided on a home, it is time to make an offer. Your realtor can provide you with information concerning the sale price of similar homes that have recently been on the market and together you can decide on an appropriate amount to bid. You will also work with your realtor to come up with a list of requirements, if any, for the sale to go through. There are many things that are negotiable when buying a home. Price is an obvious example, but other variables might include financing, closing date, repairs, items that are included in the sale (such as appliances), closing costs, and so on. You realtor will draft a contract and if the seller accepts it, you have a legally binding document! An offer should generally be contingent on an inspection and an evaluation of the results. This way, if an inspection reveals a major problem, you can reconsider and if necessary, renegotiate your offer.

If you are lucky, the seller will accept your first offer, but often he or she will respond with a counter offer, which you can then respond to in turn until eventually (hopefully), you both agree on a deal.

5. Take care of your responsibilities as a buyer. In preparation for the closing, there are several steps that you, as the buyer, must complete in a timely and responsible fashion. Generally, you will need to arrange for a home inspection for your potential real estate purchase, finalize your financing, have the home appraised, purchase title insurance, and purchase home owners insurance. Once again, your realtor will probably be able to make referrals and assist you with these steps.

6. The closing. The closing is when ownership of the home is legally transferred from the seller to the buyer. All involved parties sometimes attend the closing. There are also circumstances under which a party might be absent, such as when the seller lives out of town, and circumstances under which the buyer and seller might be in different rooms. At the closing a series of documents will be signed and funds will be dispersed. Just prior to the closing date you will be provided with a financial statement outlining the exact amount of money you owe. This money, along with any other necessary documents, should be brought to the closing.

7. Get the keys. Congratulations! The home is now yours!