Step 1: Decide to Buy

How do you know if it’s the right time for you to buy your first home?

Here are a few tips to help you get started:

• Purchasing your own home is a great investment that provides specific financial advantages, including equity buildup, value appreciation potential, and tax benefits. (It’s also a forced savings plan that you cannot get from renting!)
• Done right, home ownership lays the foundation for a life of financial security and personal choice.
• There is never a wrong time to buy the right home. All you need to do in the short run is find a good buy and make sure you have the financial ability to hold it for the long run.
• Here’s the most important rule for keeping your stress to a minimum: you don’t have to know everything.

Step 2: Hire Your Agent

When you’re looking for a real estate professional to help you, know that above all else good agents put their clients first.

The main roles your real estate agent will perform include:

• Educate you about your market.
• Analyze your wants and needs.
• Guide you to homes that fit your criteria.
• Coordinate the work of other needed professionals.
• Negotiate on your behalf.
• Check and double-check paperwork and deadlines.
• Solve any problems that may arise.

Step 3: Secure Financing

It’s normal to ask how much you can afford. Ultimately, your lender will preapprove you for a certain amount, but YOU will decide what you’re comfortable paying every month.

Be sure to follow these steps to financing your home:

• Choose a loan officer.
• Make a loan application and get preapproved.
• Determine what you want to pay and select a loan option.
• Submit to the lender an accepted purchase offer contract.
• Get an appraisal and title commitment.
• Obtain funding at closing.

Step 4: Find Your Home

So you are preapproved and ready to begin your search.  But how or where do you begin?  The best thing is to consult with your agent to more accurately pinpoint the home you are looking for. The right home will meet all your important needs, and as many of your additional wants as possible.

Some questions you might ask yourself include:

• What do I want my home to be close to?
• How much space do I need and why?
• Which is more critical: location or size?
• Would I be interested in a fixer-upper?
• How important is home value appreciation?
• Is neighborhood stability a priority?
• Would I be interested in a condo?
• What features and amenities do I want? Which do I really need?

You’ll learn as you look at homes, it’s wise to refine your priorities along the way.

Step 5: Make an Offer

Congratulations! So you’ve found a home you love. Now you need to make a compelling offer. Look to your agent to explain the process and guide you through. Ultimately, the right price to offer must fairly reflect the true market value of the home you want to buy. Your agent’s market research will help guide this decision.

• The three basic components of your purchase offer are price, terms, and contingencies.
• Price is obviously the dollar amount you are approved for, willing and able to pay.
• Terms cover the other financial and timing factors that will be included in the offer.
• Contingencies are clauses that let you out of the deal if the house has a problem that didn’t exist or which you weren’t aware of when you went under contract. They specify any event that will need to take place in order for you to fulfill the contract.

Step 6: Perform Due Diligence

Just because you love a particular property doesn’t mean that it’s perfect. In fact, this is where reason has to trump emotion. You’ll need to have a property inspection (which we highly recommend you attend) that will hopefully expose all the issues a home might hide. This way you’ll know exactly what you are getting into before you sign closing papers.

• Your main concern is the possibility of structural damage. This can come from water damage, shifting ground, or poor construction when the house was built.
• Don’t sweat the small stuff. It’s the inspector’s job to mark everything discovered no matter how large or small. Things that are easily fixed can be overlooked.
• If you have a big problem show up in your inspection report, you should bring in a specialist and if the worst-case scenario turns out to be true, you might want to walk away from the purchase.
• And even if your home passes inspection with flying colors, you’ll still need to buy a home owner’s insurance policy protects you against loss or damage to the property itself and against liability in case someone sustains an injury while on your property.

Step 7: Close

You’ve made an offer and performed due diligence, which means you’re now in the "home" stretch, pun intended.

Your final few preclosing responsibilities include:

• Staying in control of your credit and finances, first and foremost.
• Keeping in touch with your agent and lender and returning all phone calls and paperwork promptly.
• Communicating with your agent at least once or twice a week, and verifying with your lender that all mortgage funding steps are completed.
• Conducting a final walk-through of the home with your agent.
• Confirming with your agent, home insurance professional, and lender that you have the settlement statement, certified funds, and evidence of insurance lined up prior to closing.