Basic steps to buy A Home:
- Meet with your preferred Real Estate Agent for a consult to discuss what your goals in a home purchase is.
- Check your credit (consumers can get one free credit check annually) verify all records are accurate -- correct / improve any outstanding items that may reflect negatively on your credit worthiness
- Locate documents for lending evaluation. (1) Past two years tax returns (2) W-2 statements for two years, (3) past three months employment check stubs, (4) past three months bank statements for both checking & savings (5) divorce and/or child support decrees
- Meet with a lender of your choice for loan pre-approval providing above listed document copies on your first visit to ensure an efficient pre-approval process that has been verified and can be used to make an offer on a home purchase.
- Notify your agent of the amount of funds you have been approved to spend to purchase a home and provide a copy of the approval document.
- Discuss your preferences, likes, and dislikes so the agent may begin to locate properties to be considered for your "needs" in a home
- View properties after narrowing down to a select few of your preferred choices
- Meet and Consult with agent to make an offer on legally acceptable terms and contracts in the state / county the property is located in
- Make offer and leave the rest to your preferred agent to negotiate the best deal for your investment.
While most home buyers know what they want their house to be, many aren't always realistic of what can be gotten when searching for a pre-existing home / re-sale home. For most buyers, cash funds is the first obstacle to overcome. It is best to begin working on finances well in advance of beginning to start a home buying process. A good rule of thumb is to notice the average prices of houses that sell in the area you would like to buy a home. What ever the average prices are in these areas, take this reference amount and multiply it by 20% to get an estimated amount of funds you may need as a down payment to get financing using a typical 30 year conventional loan. For example, if the average price of homes in your preferred areas are around $120,000 then you would need to set aside at least $24,000 for your down-payment. While this seems like a large amount careful planning and USING A BUDGET PLAN can make it a goal that can be reached. If reaching such a goal isn't something that you can do within the time you are willing to wait, then you should discuss with your preferred real estate agent what other housing assistance programs are available for your circumstances. Your agent may then guide you through the process of options that are backed with FHA guarantees for example. FHA and other options exist but vary from area to area depending on the options available in your state. Most agents are familiar with the choices available to you so it is best to work with a real estate agent in your area as they usually can give you ideas on approximately how much out of pocket funds you will need to utilize such programs. Another HUGE MISTAKE buyers make is beginning to shop for houses BEFORE getting their loan approval completed to know exactly how much they can spend on a house. Imagine the frustration of finding the perfect house only to realize that your approved loan amount prevents you from buying it!! So, get your loan approval in order before shopping and then have an agent locate ONLY houses within the price range your loan will support to avoid frustration and disappointment. Lastly have an open mind if you are buying a pre-owned home. In most cases you will not find a home with EVERYTHING on your must have list but usually most of the things you wish for. Approaching home buying with an eye for what improvements a property has room for within it's structure can often make it possible to get everything you want in your home in due time. Statistics suggest that most homeowners stay in their 1st home purchase on average of 3 to 7 years before outgrowing it and selling to buy a larger home. Once a second home is purchased statistics indicate that on average after 15 to 25 years in this home the owner sells again to decrease the size of their home for retirement comfort and affordability. So what this means is a buyer should approach the purchase of their 1st home with conservativeness and careful thought, making sure it can provide adequate housing. However, it is also important to make sure when selecting the 1st house, the resale value is highly probable to go up so your long term 2nd home purchase can be afforded with the profits from the sale of the 1st home purchase. Your preferred real estate agent usually works hard to present you with 1st home purchase choices that accomplish this, as they expect in a few years they will have the task of helping you sell this house and get you into a better or more suitable one for your family's growth. Then again when you age and need to downsize for retirement. Obviously locating a real estate agent you can trust and appreciate is very important, as generally they stick with you for a lifetime of property investments!