What is the first thing you think of when you hear “buying a home”? While some may think investment, opportunity, or exciting, others may think stressful, overwhelming, and expensive. And that is okay, your feelings are certainly validated! Because listen, no matter how new or experienced you are at buying a home, it is a process nonetheless.
Trust the Process When Buying A Home
Rome was not built in a day, the key is taking it one step at a time. Breaking the “process” of buying a home into steps is not only more efficient, but it is also a more manageable way to approach the end goal.
Step 1: Get Organized
The very first step is to get organized. According to Zillow, the entire process of shopping for a home to closing on a home, takes about 6 months. During those 6 months, the buying process involves a lot of details, pricing, applications, contacts, and appointments. Get ahead of this by creating a system of organization that best suits you to help navigate the process smoothly. Whether that be a notebook and folder or a more electronic approach, try whatever calls to you! We at Live Love Artemis swear by organizers like the Ink and Volt Planners which you can buy HERE.
Step 2: Set A Budget
Sit down with your budget and be sure to stay realistic. Consider creating a spreadsheet of your overall annual income and monthly expenses. According to Discover, “lenders generally recommend that people look for homes that cost no more than three to five times their annual household income if the home buyers plan to make a 20% down payment and have a moderate amount of other debt.” Once you have considered your monthly expenses, there are various free online resources that will help calculate your budget including Discover’s Affordability Calculator and Zillow’s Mortgage Calculator.
Step 3: Kickstart Your Search
This is the fun part! Grab your local newspaper and a highlighter, or browse on real estate marketplaces like Zillow, Trulia and Realtor.com to see what homes are within your price range. Take note of features or specifications of a home that you are looking for to further funnel your search. This is also the time to search around for a local Realtor® that is right for you. We always encourage collaborating with an expert and here is why. Not only is a Realtor® going to be able to send you additional listings that fit your home buying vision, but they also are valuable advisors through navigating the complexities of the market, negotiation, and paperwork. If you are looking for homes in the Philadelphia area, Live Love Artemis is here for you to help you navigate the process of buying a home.
Step 4: Get Pre-Approved By A Lender
When buying a home consider getting pre-approved, this should be one of your earlier steps in the process as it contributes to your budget. This is another step your Realtor® can help you navigate. The pre-approval process will not only give you an idea as to how much a lender is willing to lend to you, but can also act as supportive documentation when putting an offer on a home with potential competition. Be sure to consider your options. Zillow recommends getting multiple estimates to allow for a comparison of interest rates and fees. As always, getting prepared and organized will help the process to move smoothly. Zillow lists examples of the documents that are typically used for the pre-approval process including: income statements, assets, and records of foreclosures to name a few. To see the full list, click here.
Step 5: Start Touring Homes
There is nothing like seeing a home in person. This is when you can really start to see if your vision translates into the physical space. This is also a great time to bring along that organizer or notebook to take notes on each home (likes, dislikes). Though a formal inspection will come later in the process, consider taking note of visible and apparent structures such as the water pressure, light switches, windows, exterior of the home, and more while walking through the home.
Step 6: The Offer
3 letters: CMA. This stands for comparative market analysis. This is another Realtor® area of expertise by which they use recent sales in the area to generate a comparable offer. It is important to remember that not every offer will go through and may even require multiple offers before closing on the home. Don’t give up hope!
Step 7: Home Inspection
Be sure you are working with a licensed home inspector. Once again, your Realtor® can help guide you in the direction of one that you can trust. Although you will receive an official inspection report, it is a good idea to attend the inspection itself so that you are aware of the findings. Re-negotiations are contingent on these findings.
Step 8: Mortgage Application
Buying a home can feel stressful when you start looking at the financial investment because it’s one of the biggest purchases most people make. However, having the right professionals on your side when buying a home, will the process feel smoother and not as overwhelming. By now you will have made the decision as to which loan program you will be choosing based on what suits you best (i.e interest rates, monthly payments, term length) from the advice of your trusted lender. Given everything clears, once you have provided the necessary documentation and completed the paperwork, you will be given the green light to proceed.
Step 9: Appraisal/ Title/ Homeowners Insurance Policy
Your lender will hire a third party appraiser to assess and provide an estimated value of the home, as well as, a title company. You will also need a homeowners insurance policy. But guess what, your Realtor® can also guide you through this and will be there to answer your questions every step of the way. You can also ask your Realtor® for any recommendations that they may have for you to consider.
Step 10: Closing Day
Typically, there is a final walk through before buying a home to ensure the condition of the home is as expected. Then, you will need to complete the signing of all remaining and necessary paperwork at the settlement table. Lastly, you will make your payment to the seller. Voila!! Go make your house a home.