- Real Estate
First Time Home Buyer Checklist
Decision to Buy a Home
You’ve thought long and hard. The decision has been made to buy a new home. This is an exciting time but before you pop open that bottle of champagne there are a few things to know that will help ensure the home buying process goes as smooth as possible. Knowing what to expect when buying your first home will help calm your nerves and with the help of a knowledgeable real estate agent you will be in a new home in no time.
Pull a Credit Report
Credit blemishes won’t necessarily keep you from getting a home but could cause higher interest rates. This means you could end up paying much more for the home of your dreams. Requesting your credit report is a good way to double check against items popping up on your report that could hinder you buying your first home.
Get Pre-Qualified for a Home Loan
As a first time home buyer, save time and money by getting pre-approved financing in place before you do anything else. This will not only give you an idea of the budget you should be looking at but will also help your Realtor identify properties within that budget. Don’t wait until after you’ve found a home to get financing. Chances are the home you want will be off the market by the time you get through the financial process of buying a home.
There will be costs associated with your new home before ever signing on the dotted line. Appraisal costs, closing fees, survey costs, homeowner’s insurance, processing fees, and underwriting fees just to name a few. Don’t worry; your Realtor will guide you through every step of the home buying process.
Your Realtor can also help you look at options to buying a home for the first time with no money down. This will leave more breathing room for those other expenses. Be sure to discuss this with your agent. Other factors to consider in your new home search will be property taxes, HOA fees, maintenance costs, and miscellaneous expenses.
Find a Realtor
What type of agent do you need to buy a home? Believe it or not there are many roles in real estate so be sure you are looking for a Buyer’s Agent. This type of agent represents you while the seller has their own agent, a Seller’s Agent. Not only will a Buyer’s Agent help you in your search for a new home, they will also assist you with setting up home inspections, negotiating prices based on market research, submitting an offer to the Seller’s Agent, and are by your side when it’s time to sign the contracts.
A great resource for locating a real estate agent online for free is http://FindAgents.online
Finding Your Dream Home
When it comes to buying a home for the first time, make a list of your wants and needs. How many bedrooms will you want? How many baths? Is there a specific neighborhood you are looking at? Are the area schools important to you? You may not find everything on your ‘want’ list but your Realtor will help you get pretty close. Most important, if you find a home that suits your needs don’t delay in putting in an offer.
Earnest Money vs the Down Payment
You will put down at least 1 to 5 percent of the home cost in earnest money to show the seller that you are serious in purchasing their home. The funds will ultimately be applied to your down payment or closing costs. A down payment is what you put down toward the purchase price and can be as low as 3.5 percent with an FHA loan and around 20 percent on a conventional mortgage. Your credit will play a large factor in determining your down payment.
Submit an Offer and Prepare for Negotiations
This is perhaps the most stressful period in the entire home buying process. You have finally found the perfect home. It has everything you need and most of what you want. Your agent submits an offer on your behalf for just under asking price. Now, you wait. The seller controls the situation at this point as they have the power to accept or decline your offer but don’t panic. Your agent will keep you in the loop and will let you know the moment good news arrives.
Congratulations on your new home! It’s time to pop that bottle of champagne but there's still a lot more to being a homeowner. Stay tuned for more tips and resources.