A STEP-BY-STEP FIRST TIME BUYER’S GUIDE
Buying a home is one of the most exciting milestones of your life. To prepare yourself for this moment, you need to know what to expect during the process. This step-by-step first time buyer’s guide created by your agent will help reduce the stress of buying a home and help you enjoy the journey as much as possible.
STEP 1: RESEARCH
Do you already know where you want to buy? If you want a condo, townhome, or single-family home? Which features do you like and dislike? What’s available on the market now? In addition to looking for homes that interest you, also take note of any changes in asking prices. This could give you valuable insight into housing trends in specific neighborhoods and help you when the time comes to make an offer. The research phase is the ideal time to connect with an experienced real estate agent who can offer recommendations and guidance in the next steps.
STEP 2: DECIDE ON YOUR BUDGET
Notice I said to “decide on your budget”—not determine how much the mortgage company will give you. In many cases, a mortgage company will pre-approve you for more than you’re comfortable spending, which is why you need to determine the monthly payment you feel comfortable with in advance. This likely includes making a full household budget and taking into consideration what changes other than a mortgage payment will occur once you move into your new home. If you’ve lived in an apartment or with roommates, you may overlook new expenses like garbage, water, or HOA fees that could easily blow your budget. Remember to be realistic about what you can afford.
STEP 3: GET PREQUALIFIED
Just because you think you can afford a certain payment every month doesn’t mean the mortgage company will agree. Just as they may approve you for too large of an amount, they may also approve you for a lesser amount or deny you a mortgage altogether. Lack of time at a job, insufficient credit, past bankruptcies, or other financial issues can cause major problems when trying to secure a mortgage. Before you get your heart set on a home, talk to a mortgage professional to find out what amount you qualify for. Also consider that a lender pre-approval is preferred over a pre-qualification. This will be an advantage when you make an offer on a home, as some sellers won’t entertain offers from those who aren’t already pre-approved for a loan. As an experienced real estate agent, I can recommend a few mortgage lenders who I have worked with and trust.
STEP 4: CHOOSE A REAL ESTATE AGENT
Once you’ve been pre-approved for a loan, we will formalize our agreement to work together. Can you shop for, look at, and ultimately make an offer on a home without a real estate agent? Technically yes, but why would you? Part of my service is to help take the stress off of your shoulders. Finding the perfect home can be a fun but sometimes daunting task so this is where my expertise and wealth of knowledge come into play. Let me show you around some homes that meet your criteria so you can find the one that’s right for you.
STEP 5: FIND THE RIGHT HOME
Let’s shop! This should be the most enjoyable step of the entire process (other than getting the keys!). During showings of homes that you are interested in within your price range, I will take notes about what you like and don’t like, and make sure to pay attention to details. You should turn light switches on and off, open and close doors, and run the faucets in various rooms. Don’t limit your inspection to the home itself. Make sure to take time to explore the neighborhood and keep an eye on traffic at certain times of the day, the parking situation, and how close it is to necessities like schools, grocery stores and activities you enjoy
STEP 6: MAKE AN OFFER
Once you have selected the perfect home, we will work together to create an fair offer based on the value of comparable homes on the market. Depending on what the home is listed at and whether the current environment is a buyer’s or seller’s market, your offer may be below, at, or even above the asking price. During the offer phase, I will be able to help you negotiate if you receive a counteroffer and ultimately reach an agreed upon selling price. Once the seller accepts and all parties have signed, you will be considered “Under Contract”! This portion of the process can take approximately 21-45 days before you officially close on your new home.
STEP 7: HAVE THE HOME INSPECTED
In most cases, your offer will be contingent on having the home inspected to ensure there is no major structural damage or large repairs needed. I will help you schedule the inspection within days of making an offer. Based upon the results of the inspection, the next step would be to re-negotiate your offer based on what needs to be fixed or you can withdraw it altogether. Each inspections scenario is different.
STEP 8: SELECT YOUR LOAN
Now is the time to go back to the mortgage lender who pre-approved you and choose your mortgage. You will be presented with various options based on your unique financial situation, including fixed-rate, variable-rate, 15-year, 30-year, or special programs such as VA loans or FHA loans. Work with your mortgage lender to select the option you feel the most comfortable with. Your mortgage lender is the absolute best resource in this area to answer all of your financing questions.
STEP 9: GET A HOME APPRAISAL
Your lender will have your new home appraised so they have their independent value of it. The appraisal is to ensure that all parties involved are paying a fair price for the house. Based on the results of the appraisal, it is possible that we may need to re-negotiate the offer price.
STEP 10: FINISH PAPERWORK
At this point, you’ve received the “clear to close” from your lender indicating that your loan has been finalized, and your exact closing date has been scheduled. At the closing, the title company will review with you and the seller all of the financials related to the transaction, you will sign the final paperwork and the seller will give you the keys.
CONGRATULATIONS!
You have officially graduated from home seeker to homeowner! While it may seem as if our time together has come to an end, I can assure you it has not. I will still be available with tips, tricks and advice as you settle into being a new homeowner.
Work With Janeen
If you are interested in buying, selling or leasing property in Maryland, District of Columbia or Virginia, please reach out. I would be honored to be of service.
