Are you just starting out on your journey to buy a home? Are you unsure of the process? Often my clients express this uncertainty about the home buying process. How do I begin? When do I start? What should I do first? These are common questions that I address in this blog to help make it easier for you. After all, that’s my goal for you – to make the home buying process easier to understand and navigate.
3 Steps to Home Buying
STEP 1: PLAN. The home buying process starts with a little planning. Do these things ONE FULL YEAR before you wish to move:
• Start with your end date in mind to establish a timeline. Let’s say, for instance, that you want to move when school lets out for the summer, sometime around May 30th. The average closing takes around 45 days so you would need to have a binding contract on the home you’d like to purchase by around April 15th. It will take most people 30-60 days to find and secure the home they want, so in this case you’d plan to start your home search in earnest around February 15th.
• Solidify your income streams so that you’ll be able to show at least a 6-month income history (company employee with good credit) or 2-year history (for those with inconsistent or seasonal income or self-employed) of consistent income at the time you secure a contract to purchase your home.
• Get your credit scores/reports from the three credit bureaus – Equifax, Transunion and Experian. You’ll be able to get one free credit report per year from all three bureaus here. Then, look for errors in your file and clean them up (learn how here). You’ll want to get your baseline credit scores now so you’ll know what to do finance-wise to qualify for a home purchase.
• (If you have a house to sell) Invite a REALTOR® into your home to give you a professional assessment of its value along with advice on what you’ll want to do to get it ready for sale. I have found that it takes about a year for most people to de-clutter, clean, repair and improve (paint, flooring, upgrades, etc.) a home to get it ready to market.
• Have an honest discussion with a Mortgage lender (your REALTOR® will have a list of pre-screened, competitive, and excellent local lenders if you ask). They’ll give you valuable advice on how much house you’ll be able to afford now, and what to do during the next year to improve your financial standing.
STEP 2: RESEARCH. Next, you’ll want to do a little research. Do the following items SIX MONTHS before you wish to move into your new home.
• Zero in on the general geographic area or school system you’re interested in. Drive the area of interest and spend time there. Find and note neighborhoods you like and locate nearby restaurants, grocery stores, shopping, medical care, etc.
• Now’s also the time to secure a “Buyer Broker Agreement” with your real estate agent – be sure they’re also a REALTOR®. Ask friends and family for recommendations, check reviews, and schedule in person interviews. You may want to choose one with the ABR® designation as well. This acronym stands for “Accredited Buyer Representative,” and REALTORS® with this designation have specialized training to help you find and purchase a home. What will a REALTOR® cost you? In nearly all transactions in Georgia it cost the home buyer nothing because the home seller customarily pays the real estate commissions! It’s the best deal going! Professional representation for your largest purchase, negotiation skills, knowledge of local areas, home construction and real estate contract law, scheduling and access to properties, sound advice, and more all delivered by a professional who adheres to a written Code of Ethics…for free.
• Have your REALTOR® set up MLS (Multiple Listing Service) auto email “listing alerts” for you for the areas/school systems/neighborhoods in which you’re interested. This will help you get a feel for what’s available and the pricing.
STEP 3: FIND A HOME. Start doing the following about THREE MONTHS before you wish to move.
• On a weekly basis, make short lists of homes you’d like to see from those your REALTOR® sends you and those you find on your own (use an accurate search site like realtor.com.)
• Drive by these homes on your short list beforehand…you’ll be surprised how many you discard just by driving by!
• Have your REALTOR® schedule showings for the homes on your short list whenever is convenient for you.
• Select your lender and get a “Pre-Approval Letter” from them. These letters are valid for 120 days and your credit report will need to be pulled for your lender to produce one. They’ll also be able to give you written estimates of closing costs based on different purchase prices, down payments and loan product scenarios.
• Once you find the perfect home you’ll want to see it more than once (unless time is of the essence because of a competitive market) to assess condition and estimate costs of changes you may wish to make. Again, your REALTOR® will have pre-screened contractors who can help you get estimates.
• Once you’re ready to purchase the home your REALTOR® will negotiate on your behalf and prepare and submit all recommended contracts, exhibits, addendums and special stipulations relating to the purchase of the home and those to best protect you.
Once you secure a “binding agreement” on the home you’d like to purchase, there are many things to do. I’ll cover that checklist in a future blog! Happy house hunting!
By Mark Panetta of Solid Footing Realty. Contact (678) 266-8062 cell or (678) 341-7400 office.
Solid Footing Realty is a Keller Williams Realty Community Partners affiliate and was started in 2015 by Mark Panetta. Mark is a North Atlanta Listing Specialist, REALTOR®, Accredited Buyer Representative (ABR®) and Military Relocation Professional (MRP®). He specializes in helping you improve your financial stability in the decade before retirement by “right-sizing” your house at the appropriate time. He also works to help first time home buyers achieve the respect, freedom and pride of home ownership.