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1 Apply for a loan

The first step in buying a home is knowing what you would qualify for.  This step is before you talk to the first Realtor®.  It is the first step to empower yourself to know

1) What you are worth 

2) How to best leverage your cash

3) What are the true costs of borrowing money.

4) What would a monthly payment be to own a home.

How to know what you are worth - the fast version

1) How much cash do you have accessible today?

2) What do you own (your assets) and how much is it worth?

3) What do you owe (your liabilities)?

4) What is the difference between what you owe and what you own? - that is your net worth

5) What is your income?

6) What do you pay out every month?

The mortgage company will perform ratios on 1-6 to help determine what, how and if they can lend you money and at what interest rate and for how long.

 

 

 

2 Finding a home

Follow a defined process

a) Know yourself and if buying with someone else know them as individuals.  Then consider the two or more of you together to understand each other, how you live together, wants, desires and dreams.  Understand how each of you perceives space, time and places in general...country, city, suburbs, etc.

b) Do your research - most people start off on realtor.com, trulia and zillow, then even a local newspaper or on line classifieds. When you do your research, have  checklist you created in step a and build off that...discussing and getting familiar with places, how you feel in spaces and how this all fits together with money per month you will spend on getting a mortgage.

c) Find professionals to help you.  Realtors® are your first step to leveraging other professionals that can help you get financing, insurance and folks to help you inspect, repair or rebuild a home. To help you understand the role of the Realtor® visit realtorgumbo.com where there is concise clear information to help you choose a Realtor® that will best represent your specific needs.

3 Closing the deal

Bringing everything together and keeping it together is the key to moving in your home as soon as possible at the least cost to you.

To get to this point look at the end for a second then go backwards to understand the process along the way.


The backwards perspective:

You get handed the keys to the house and you are happy.

Your hands are tired from signing paperwork.

You can't believe how much money you are handing over.

You get confused at all the legalities to buy and what will happen to you if you do not pay the mortgage.

You meet the closing attorney.

You may meet the Sellers.

You have that uncomfortable feeling when you first come to the closing table.

You had the final walk through of the home you are buying.

Now....fast backward you first saw the house you were thinking about buying.

 

Now let's look at the process from beginning to end:

1) You get pre approved.

2) You find a Realtor® after talking to a few of them.

3) You go back to the mortgage broker to compare rates / you talk to several Realtors and choose one to represent you.

4) You start looking for properties online.

5) You start driving the neighborhoods, walking and biking at different times of the day and the week.

6) When you meet with your Realtor® with your checklist, you reconfirm what you want, how you want to see the places and why. Your Realtor® has prepared reports to show comps of the homes you are considering.  These comps show actual SOLDS for the past six months and what else is available for sale.

7) When you find the home you want, you write down the list of how you will negotiate the deal.  This list will depend on the home.  You want a plan from your Realtor® as to the approach to make sure you get a particular house for a particular price.  This is a plan, not a reactionary stage.  Your goal as a buyer is to reduce the emotional feelings that come with making an offer.

8) You work the plan.  The plan on hand is a selective, systematic negotiating where you always want to be negotiating from a position of strength, removing the competition if there is any, and removing doubt from the Seller and their agent as to your ability to buy the home as fast as possible.

9) Once you negotiate a price, then the terms and conditions really start to play a role in the transaction. Price is but a tip of the financial iceberg....and the initial offer is but the beginning of the negotiating.

10) The terms and conditions will vary, but when one does inspections, it has notoriously become the next negotiating tactic that kills deals and causes unnecessary drama to agents who are less experienced....in real estate, construction tools and techniques and the scale of deficiencies....of which with the latter there will always be.  

Consider your Due Diligence period as the time to consider your priorities from your original plan / wish list and what is most important to you in a home.

11) Once you make it through the inspections, have negotiated the price, terms and conditions now you are on the last 10% of the sale...the hardest part as a buyer.  This is when you feel you sell your soul to provide the same information to several people to get the loan, get the insurance in place and then provide information to the closing attorneys.

12) When you finally get to the day of the closing, take time to do that final walkthrough.  Never do it in a hurry.  

Go in the spaces, the places and stand and feel the place.  Allow your eyes to float around...get a sense of the place.  When you do this you are less likely to miss something that was supposed to be included in the sale, of a deficiency that was missed or a new possible problem that happened since you were last there.  

The negotiations never end until the very second you are handed the keys.

13) You get any warranties, guarantees and details pertaining to the home.

14) You get the keys, breathe a huge sigh of relief and go forth and prosper!