The 9 Steps to Home Ownership

Are you ready to Buy? Consider the reasons why you want a new house. Then decide what you need in a home, and also the things you want.  Now write them down. Next, determine how long you plan to own the house.  When you weigh all this, does buying still make good financial sense? Can you afford a house that will meet your list of requirements?  Here's a good rule of thumb: your mortgage payment should not exceed 1/3 of your net monthly income.

I'll also help you start a pre-approval for a mortgage loan. A pre-approval is a loan approved by a lender that states how much the lender will give you in the form of a mortgage.  In todays market, a pre-approval can take from several days to several weeks,  depending on your circumstances.  Ultimately having a pre-approval is essential when you start to negotiate with a seller.  He will want to know that you can perform before he accepts your offer and takes his home off the market.

Once you and I have talked about your criteria,  I'll schedule appointments to tour homes.  As we tour houses, I'll point out features to you.  And, I'll ask you to tell me what you like/don't like.  Your "wish list" will probably change as we tour houses: some things will become more important and others less.  And as your criteria changes, I'll refine our search.  We may find a house right away, or it may take some time.  The key is to know what you want ahead of time so that I can choose the right homes to show you.

We are currently in a Buyer's market: Prices are soft, and Sellers are competing with each other to sell their homes. 

Recent sales keep you and I educated to actual values in the various neighborhoods where we are looking; it's the only way to really "know the market". 

The offer is normally presented with  an earnest money deposit. This is a cash deposit that you make to the seller with the offer, though it goes into an account at a title company until closing. It can be part of your down payment or can be applied to your closing costs. 

Keep in mind that once your offer is accepted,  you stand to forfeit the earnest money if you frivolously change your mind about the property and decide to walk away). If the inspection turns up a serious problem with the home, or if your loan is denied, the contract calls for a return of this deposit to you. 

Also, Sellers look for strong earnest money deposits.  It's an indication that you are ready, willing, and able to buy.

Once the seller accepts your offer,  closing will occur in 30 to 60 days from the offer date.  However, timing is a negotiable item in the contract...if you or the seller wants a fast or delayed closing, it can be negotiated.

Market conditions will play a role in how aggressively we can negotiate.  It's better for you to know your limits prior to negotiating an offer, so that we don't get carried away . . .we'll work within your limits. 

During the closing period, you will be working with your mortgage lender to close the loan. It should be quick and easy now, because you obtained a pre-approval at the very beginning of this process.  Of course, the lender must take another look at your credit, on the chance that your financial situation has changed.  (If you've made a large purchase, or failed to pay some bills after your pre-approval, your credit score can change, and your "buyability" can be affected. So be careful when buying items  during this time). 

At this time,  the lender will give you a "Good Faith Estimate",  which tells you what your actual costs and payment will be.

You will attend a closing at the very end of this process.  You and the Seller will meet at the title company to sign final documents and exchange your check for keys to your new home.  (if you're out of state, documents to be signed will be sent to you ahead of time).  All terms of the contract must be met before the closing can actually take place.  

You'll need to bring a cerified check; your lender will tell you the amount ahead of time.  You'll also need to show a driver's license or other picture I.D.