Steps to Purchasing Your House

Step 1 – Decide and Plan to Purchase

While there are many good reasons to buy a home, wealth accumulation is at the top of the list. We refer to home ownership as the most phenomenal accidental investment man has ever made. However, we believe that if done properly, it can also be an intentional investment that can lay the foundation for a life of personal choice and financial security. There may be some sound financial reasons to support your decision to purchase a home, with appreciation, equity building and tax benefits being the most prominent. Let facts, not fears, guide your buying decision.

›You will probably be able to afford and buy a house if you pay rent.
›There is no time like the present when it comes to buying the right home. All you have to do in the short term is find a good purchase and make sure you have the financial ability to maintain it for the long term.
›The lack of a substantial down payment will not stop you from buying your first home.
›A lower perfect credit score does not necessarily prevent you from buying your home.
›Buying your first home now is the best way to get closer to buying your ultimate dream home.
›Buying a house need not be a complicated thing as there are majority of professionals who can assist you in your way.

Step 2 – Hire Your Agent

The conventional real estate transaction usually involves the involvement of a number of individuals who may include mortgage brokers, insurance underwriters, appraisers, inspectors, underwriters and escrow officers. Some other individuals who may be involved include bankers, seller's agents, buyer's agents, title researchers and various other individuals whose decisions and actions must be organized in order to ensure harmonious performance and to complete the sale of the home. It is the responsibility and duty of your real estate agent to coordinate expertly and efficiently with all of the professionals involved in your home purchase and to act as your advocate throughout the entire purchase process. The following are the seven most important roles and characteristics of your real estate agent:

›Analyzes your needs, wants and desires.
›Provides guidance on homes that meet your criteria.
›Explains you about the market.
›Coordinates the work of other necessary professionals.
›Negotiates on your behalf.
›Review and outline deadlines and paperwork.
›Provides solutions to any problems that may arise.

Step 3 – Secure and Safe Funding

If the idea of owning a home seems exciting, the idea of getting a mortgage can seem downright daunting. Many first-time homebuyers are confused about the process or remain nervous about making such a large and extensive financial commitment. From start to finish, you will go through an easy-to-understand six-step process in terms of acquiring financing for your first home. The following is the six-step process for financing a home.

›Select a mortgage specialist or loan officer.
›Prepare a loan application and get pre-approved.
›Analyze what you want to pay and choose a credit option.
›Submit an approved purchase offer contract to the lender.
›Obtain title commitment and appraisal.
›Achieve funding at the end.

Step 4 – Search Your Home

You may have the impression that buying a house begins with rushing to the car and driving around town, and somehow it is true that getting in the car and driving around seems to be the most exciting phase of the house buying process. However, driving around is just a fun activity, and the fun and excitement can instantly fade if weeks go by without discovering the house of your dreams. That is why we say that your home search begins with a careful assessment of your needs, wants and values in both the long and short term. Here are the questions you need to ask yourself:

›What do I want my house to be near?
›How much space do I need and why?
›What is more challenging: size or location?
›Would I be interested in a fixer-upper?
›How valuable is home improvement?
›Is neighborhood priority and stability?
›Would I be interested in a condo?
›Would I be interested in building a new home?
›What amenities and features do I want? What do I really want?

Step 5 – MAKE AN OFFER

You were just a dreamer when you were looking for your dream home. Now, when you make an offer, you have to act like a businessman. You need to go through this process with a cool head and a realistic view of your market. The three basic components of an offer are terms, price, and contingencies. Terms are the time and financial factors that can be included in the offer. Price – The appropriate price to offer must adequately reflect the actual market value of the home you wish to purchase. Your agent's research of the market will guide and address this decision. Terms further falls into six basic divisions in terms of a real estate offer:

›Schedule – A schedule of actions and events that must occur before the task is completed.
›Conveyances – The items that remain in the home when the sellers leave.
›Commission – It is the real estate fee or commission for both the agents who work with buyers and sellers.
›Ending Costs – It's standard for buyers to make payment of their closing costs, but in case if you wish to roll the costs into loan, you are required to write it within the contract.
›House Warranty – Covers replacement and repair of appliances, fixtures and major systems. You can make arrangements with the seller to pay for this.
›Earnest Money – It protects sellers from the possibility of you unexpectedly backing out of the deal and making a statement about the seriousness of your offer.

Step 6 – Perform Due Diligence

Unlike most of your purchases, once you buy a home, you cannot return it if something breaks or does not work as expected. That is why home inspections and homeowners insurance are so important. Homeowners insurance protects you in two ways:

›Against damage to or loss of the property itself.
›Liability if someone is injured on your property.
›The hidden problems with the house need to be revealed through the home inspection so that you actually know what you are buying before you sign the closing papers.
›Structural damage is your primary concern.
›Do not give priority to small things. Things that are easy to fix can be overlooked.
›If you have a major problem with the inspection report, you will need to bring in a specialist. In the worst case, you may have to cancel the purchase.

Step 7 – Close

The lender's confirmation of the home's value and legal status, as well as your ongoing creditworthiness, is the final stage of the homebuying process. It includes a title search, appraisal, survey, and a final review of your finances and credit. Your agent will detail each of these items as they progress, but your work is almost done. You have only a few final responsibilities:

›Keep track of your finances.
›Return all paperwork and phone calls promptly.
›Communicate and coordinate with your agent at least once a week.
›A few days before closing, review all your documents with your agent and make sure they are in the correct order.
›Obtain certified closing funds.
›Perform a final walk-through.
›On closing day, you will sign the following documents and do the following, as directed by your broker and a settlement agent.
›Pay the seller.
›Close your mortgage.
›Transfer title from seller to you.
›Make arrangements to have a legal record of the transactions as a public record.
›Pay your closing costs.

As long as you have followed directions and met expectations, the closing should be a logical conclusion to your home search and the end of your homeownership experience.

Step 8 – Protect your investment

Over the course of your home-buying experience, you have probably become familiar with your real estate agent because you have spent a lot of time with him or her. There is no reason to lose trust just because the deal is done. In fact, your agent wants you to stay in touch. Your agent can help you in the following ways even after your home purchase is complete:

›File your first and only tax return as a homeowner.
›Find contractors to help with remodeling or home maintenance.
›Help your friends and family find a home.
›Track the current market value of your home.
›Paying attention to your home's maintenance needs is essential to ensuring the long-term protection of your investment. Home maintenance can be further divided into two categories.
›Keep it clean and tidy – Regularly maintain your home's systems, depending on their style and age.
›Maintain it – Look for signs of damage, leaks and wear. Fixing minor problems now can save you a lot of money later.