Buying a home is a huge investment and a major life decision. The process can be quite complicated, but it is possible to refine and make buying a mortgage the process less intimidating by breaking into a simple-to-understand and easily implementable five step list.
The first step is to hire an agent. An agent can provide buyers with listings of properties that fit the requirements they are looking for in a new home. Also, agents often know of new pending listings that have yet to be listed on the market. Some agents will visit open houses for the buyers to preview the property. An agent can generally tell if a listing is over-priced and advise their interested buyers accordingly.
The second step is to find a home to buy. Most buyers conduct a lot of research online before ever stepping foot in a home. The National Association of Realtors estimates that the average buyer typically spends about 6 to 8 weeks researching information on-line when trying to figure out where they want to live, and, once the neighborhood is selected, most buyers end-up buying a home after 2 or 3 home tours.
Step three is getting a loan. It’s generally good practice for a home buyer to get loan pre-approval so they know in advance how much home they can afford to buy. Popular first-time buyer loans are FHA loans because the minimum down payment requirement is much less than a conventional loan. However, if the buyer is thinking about buying a foreclosed property, they tend to get priority with REO banks.
The fourth step is to negotiate the offer. Some buyers make the mistake of comparing the sales price of a particular home to other homes they have seen. Sellers can put any price they wish on the property they are trying to sell, and an agent working on behalf of the buyer can provide comparable sales information and examine the pending sales in order to help the buyer make an educated and informed decision. A “comparable sale” is a similar type home in the same condition and location that has sold within the past 3 months. When provided this information by their agent buyers can confidently extend a reasonable offer to the seller they feel comfortable making.
The fifth and final step is to have a home inspection done. In some states a home inspection is a contract contingency. A contract contingency means a buyer has the right to cancel the contract if the inspection revels something unsatisfactory. This prevents buyers from being locked in to purchasing a home after a problem has been identified. Sellers are generally not required to make repairs if problems are discovered during a home inspection, and the buying/selling process does not have to end if a needed repair is identified. A buyer can submit a “Request for Repairs” to the seller who can then decide whether or not to make the requested repair in order to complete the sale. An agent can provide the crucial information to help the buyer understand the consequence and financial impact an impending repair may place on their future budget. If the seller declines to make the repairs the agent can immediately assist the buyer in proceeding to the next prospective property. With their knowledge and understanding of this process, an agent can remove the guesswork and possibly save the buyer a significant amount of money.