Wading through the real estate market for the perfect home can be exhausting if you aren’t prepared. Keep the excitement alive about buying a home by understanding the home buying process. Check out these six steps before you start to browse the listings.
💯 Know Your Credit Score
A credit report is a compilation of information about how you handle debt. Creditors use it as a primary tool in deciding whether or not to give you credit. Included in the report is your history of payments to creditors and public records, such as judgments or bankruptcies, which are items that may impact your creditworthiness.
A credit score is the summary of your credit report in the form of a number. The number indicates how good or bad your credit history appears. The higher the score, the better — although this depends on how it’s weighed.
It is important to maintain a good score because credit providers consider this information when deciding whether they will extend credit to you. A good credit score is paramount when purchasing a home. The minimum credit score you need to purchase a home will depend on the type of home loan you choose.
💰 The Importance of Saving Money
Your down payment will vary depending on the purchase price of the house. Your mortgage loan will cover the remaining amount due. There are other costs and fees that you need to pay that are generally rolled into what’s called Closing Costs. It’s a good idea to have additional funds saved to cover these fees and moving costs. Having 20% of the cost of the home you wish to purchase is recommended. Savings is what will open the door to owning a home. Buyers who have set aside savings for a deposit are finding it far easier to purchase the house of their choice and take advantage of property prices available in today’s market.
👥 Find the Right Real Estate Agent
Real estate agents are important partners when you’re buying a home. Real estate agents provide you with helpful information on homes and neighborhoods that isn’t easily accessible to the public. Their knowledge of the home buying process, negotiating skills, and familiarity with the area you want to live in can be extremely valuable.
Choose a real estate agent who meets your needs. You want someone who listens to your concerns, communicates at a high level and is a skilled negotiator. Set up a meeting time with the prospective agent to ask questions.
✔️ Get Pre-Approved for a Home Mortgage Loan
Before you start looking for a home, you will need to know how much you can actually spend. To get pre-approved, you need to provide some financial information to your mortgage lender, such as your income and the amount of savings and investments you have on hand. Your lender will review this information and tell you how much they are willing to lend you for a home. There are several benefits to be pre-approved.
Being pre-approved gives you a solid idea of how much home you can afford. There’s nothing worse than finding the perfect home for $500,000 when your target price range is $300.000. A pre-approval can tip the scales in your favor if your offer is up against others in a bidding war. Your approval shows a seller than you have the ability to follow through with the purchase if you accept your offer.
💵 Placing the Right Offer
Your real estate agent will complete a comparative market analysis that helps you determine the best offer. They will look at recently sold homes in the area and consider the current real estate market when completing this report and giving you advice on the best course of action.
You want to create an offer that catches the seller’s eye. Consider including your reasons for choosing that home. Some sellers appreciate knowing that there is a sentimental reason behind the buyer’s choice. Your real estate agent will help you create an attention-getting offer.
📝 What Happens After Offer is Accepted?
Once your offer is accepted, you are on your way to closing day. You and the seller will sign the Deed of Sale, facilitated by the seller’s real estate agent. During this time, any paperwork that’s needed is completed on both sides of the table. There may be additional inspections, appraisals, and a final walk-through. Any repairs or modifications to the property are completed, and a closing date is set. On closing day, you’ll pay any necessary closing costs and receive the key to your new home. Your real estate agent will be with you every step of the way!
Your real estate agent is the best source of information about the local community and real estate topics. Give Peter Klein a call today at 720-771-5757 to learn more about local areas, discuss selling a house, or tour available homes for sale.