How To Buy a Home

Over the course of American history the make-up of this country has changed dramatically; political parties have adopted new platforms, new immigrant populations have entered and immersed themselves, and the values Americans share have shifted with the growth of technology and global interconnectedness.  Still, one thing has remained central to American culture, that is, the dream of homeownership.

The American Dream has long been defined as the ability to collect wages to purchase land and to build a home. Though the housing market has seen changes over the decades, this goal, to most, has never faded into the background.  Nowadays the business of buying a home is not as simple as gathering some cash and offering the seller your wad.  The Real Estate Industry has become more complicated, but it should not intimidate you.  If you are in the market for a home here are some special tips on how to secure the perfect house.

  1. Obtaining Financing. The first step to buying a house is knowing how much money you can spend.  Most people, if they are not buying a house with cash, seek the assistance of a mortgage broker.  The mortgage broker will calculate the amount of money his or her lender, or bank, can comfortably give to you.  This number is computed based on your credit score, your debt, you employment record, and a number of other factors. 

    Once a broker has this number, he or she will issue you a pre-approval letter that indicates the maximum amount you may borrow.  Most sellers will not accept an offer to purchase without a pre-approval that proves you can afford the home.  It is a good idea to get a pre-approval before you start looking for a home so that you are familiar with your price range.

  2. Finding you dream home.  There are two ways of finding a house-through an agent or on your own.  Buyer's agents are becoming much more common in the Real Estate Industry these days.  Buyer's agents are brokers who solely represent you, the buyer, in the purchase of a home.  They receive their commission from the seller.  Some Buyer's agents will require you to sign an agreement stating that they will be the only agent helping you, and a small percentage seek direct compensation for their assistance. 

    Buyer's agents will assist you in your search by directing you to open houses, setting up appointments to see different units, and offering you advice on the process of buying a home.  Agents have access to the Multiple Listing Service (MLS), and can send you daily electronic updates as well. Since, in most instances you are not paying the agent out of your pocket, it is a good idea to get this free representation. 

    You may also search for a house on your own.  Looking in the paper for open houses, accessing MLS on your own through different websites, and speaking to homeowners about the pitfalls of finding and buying a home is a good way to start.  If you are looking for a home without a buyer's agent you risk not getting expert advise on a major purchase and relying on a seller's agent or seller to offer you information.  However, some sellers will reduce their asking price if you do not have an agent simply because they will not have to pay a commission.

  3. The Offer.  Once you pick out the property you want and know that you can afford it, you can draft up an offer indicating how much you would like to pay, how much you want to put down, when you want to do an inspection, and went you want to close on the deal.  Your real estate broker and mortgage broker can help you with these dates.  In most states you will need to put down $1,000 for a deposit with the offer.
  4. Inspection.  After the offer is accepted-most often after some price negotiations-it is time to find an inspector.  You may choose to get a general inspection, a lead inspection, and/or a pest inspection.
  5. Purchase and Sales.  After the inspection(s) if you are still satisfied with the property it is time for the next step; the Purchase and Sales, or P&S. The Purchase and Sales is the blueprint for the deal.  It details any issues that need to be resolved from the inspection, it indicates the date on which you need to have your financing ready, it indicates the purchase price, and it includes the date of closing. This is a legal and binding document. 

    You can use a template for the Purchase and Sales or you can seek the assistance of a lawyer for this.  It is recommended that you use a lawyer for the Purchase and Sales as well as for the closing, as they perform title searches and make sure the purchase is legal.

  6. Waiting, Preparing for the move ahead.  After the P&S is signed by both you and the seller all you must do is focus on making sure your financing is all set, and wait for closing.  A typical closing is anywhere from five to eight weeks.  During this time period it is a good idea to choose a reputable moving company, fill out a change of address form with the postal service, and familiarize yourself with the laws and rules of the new city, town, or state that you will be residing in.
  7. Closing.  When it is time to close on your new house make sure you bring your bank check for the remaining balance of your down payment and several forms of ID. The rules are different for each state, so check with your lawyer and mortgage broker.  At the closing be prepared to sign many, many documents several times. 

    After your last signature, the deed is sent off to be recorded at the appropriate registry, and once this happens you are officially a homeowner. Congratulations! Buying a home can be a stressful endeavor, but not if you are prepared with the proper tools.  The proper tools in this instance are experts in the industry.  Having an intelligent real estate agent or broker, a savvy mortgage broker, and a sharp lawyer are crucial to the smooth transaction for the first-time home-buyer.

 

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Comments

Aug
13

yup, buying with the help of a real estate agent and lawyer is the surest way to go. thanks for the tips. wish though you had said more about differtent payment options, and also the fun side of buying a home, like finding out about the house' history, antique value, previous owners, etc.

By Anonymous
May
17

Fine article, Difficult to cover everything in one page on such a many faceted subject. One important detail I would add is please fully check out the "bones" of the house yourself. The "bones" are the electrical, plumbing, and heating and air systems, prior to making an offer. This is basically a check, by you, of the basement, crawl space, and utility closets, if any. Turn on faucets, flush johns, turn on furnace or ac, if the home's electricity is turned on.
If everything works, then proceed with your offer, if you are interested. Include in your offer the that you will have a home inspection, also.

By Ron Ambler
Feb
22

Before step #4, I would MOST HIGHLY recommend obtaining a Seller's Disclosure as to the property condition and other nice to know information. I believe it is a requirement in some state i.e. TN. A good link to a form
http://www.state.tn.us/sos/acts/100/pub/PUBC0727.htm scroll down to access the form.

By Jim VanErmen
Nov
20

The information is good but could be more thorough. There are so many factors involved, so much paperwork, so many things that can go wrong... don't do it yourself. Save yourself time and money, hire a professional realtor! Don't open yourself to a potential lawsuit.

By Riley Klein
Nov
18

Very good as far as it goes. How the heck could anyone cover this topic in just one article? One piece of advice that should be included: Save your butt off so you have a decent downpayment.

By Murry Shohat