How Exactly Do I Buy A Home?
It is completely normal to feel overwhelmed with the home purchase process, especially if it is your first time buying a home. Nowadays you can find most answers to your questions online but what questions do you even ask? It is very helpful to have a professional by your side to walk you through the process step by step and help you avoid common mistakes. Below I will briefly cover the 5 major steps to buying a home (assuming your credit and finances are already in shape to buy a home).
- Do your research: Learn about your own financial profile, the current mortgage interest rate, market inventory, school ratings, and crime ratings. Choose a desired location. This step can usually be done without a Realtor.
- Get pre-approved for a mortgage: This is the most important step! Speaking to a mortgage lender will let you know exactly how much you can afford. They will ask for simple documents such as tax returns, bank statements, proof of income, photo ID, and a few others depending on your specific situation. It is highly recommended to have a pre-approval in hand by the time that you are ready to submit an offer for a property. A lot of buyers begin to search for homes before getting pre-approved then when it comes time to submit an offer they find out that they are not approved for as much as they thought or a buyer that is already pre-approved moves quicker and steals the property while they wait for their pre-approval. Getting pre-approved is free and easy. Make it a priority, get it done!
- Get in touch with a Realtor: Not all Realtors are equal! Interview a few Realtors until you find one with the necessary market knowledge and experience. Nowadays Realtors are needed less for tasks such as doing home searches, most buyers like to search online on their own. Realtors are needed more for tasks that computers can’t do such as writing appropriate contracts and addendums, helping buyers negotiate strong offers that will beat the competition, foreseeing and avoiding mistakes, making sure that all deadlines and obligations are met, and staying in contact with all participating parties to make sure everything is moving along accordingly. Sellers pay the Realtor’s commission fee.
- Begin pursuing properties: Now that you know what area you would like to live in, are pre-approved for a mortgage, and have a trusted Realtor by your side you can get more serious with your search. Attend open houses and go on showings. If you are interested in a specific neighborhood, a good Realtor can find you the perfect house even if it is not on the market. Your Realtor should give you a market analysis so you can submit an educated offer based on DATA. Avoid submitting lowball offers based on what you FEEL the home is worth unless you are ok with getting out offered over and over.
- Under contract to closing: At this point you found the perfect house and decided to submit an offer. Your offer gets accepted, now what? The day that the contract gets executed is called the “effective date”.
- You will have a specified amount of days to submit your deposit to the escrow holder. Usually within 3 days of the effective date.
- You will have a specified amount of days to inspect the property after the effective date. During your inspection period you have the right to cancel the contract for whatever reason. Inspection period is usually 7-10 days.
- If there is a HOA that you need to apply to, you will have to initiate the application within a specified time from the effective date. Usually 5 days.
- Get approval from your mortgage lender for the purchase of the specific property. Due date is specified in the contract.
- Appraisal is scheduled, you don’t have to do anything during this step just hope that the property appraises for more than what you are offering. If property appraises for less than your offer amount then you may renegotiate with the seller.
- Clear to close, wire funds to the title company and sign closing documents during the closing.
(These are just the basic steps during the transaction. Every transaction is different so there may be additional steps depending on the specifics.)
Time is of the essence! In our market (Pembroke Pines, Miramar, Weston, Cooper City, Davie, Hollywood, Plantation, and most South Florida communities), homes are being sold extremely fast. If you are not 100% ready to buy by the time that you find the perfect home, you may miss out on it. It is best to get everything in shape and ready to go so when you find the right property you can move quicker than your competition.
I am a real estate consultant in the Broward County area, if you plan on purchasing a home in the near future and would like step by step guidance please feel free to reach out to me via Herson@Bridgestonere.com or call/text me at (954)829-6073. Let’s get you ready to buy a home!
