Buying a home requires a lot of planning and preparation. Afterall, for most people it represents a huge investment of money but it also reflects their personality. People have "feelings" about their homes. Your home represents more than just shelter and where you get your mail.
A good REALTOR is an essential part of your team so be on the lookout for someone you are comfortable working with. REALTORS work as agents of their clients which means you should feel like you are controlling the relationship not the other way around.
Experts in the field recommend an organized approach to the process. Here are five steps that are widely viewed as being essential to making a good long term decision.
1. NEEDS IDENTIFICATION - This is the step most people take as they realize their current housing situation is not meeting all of their requriements. When you are waiting to use the bathroom while your teenage daughter takes a 40 minute shower, you are experiencing needs identification. Location and neighborhood characteristics are major motivators. Whatever the reasons, write them down. This will help you stay focused later on.
2. EVALUATE YOUR RESOURCES - This step will usually involve a call to a local mortgage lender. I say "local" because most real estate professionals do not recommend going to the Internet for such an important element of the home buying process. You want to be able to sit down with a loan officer who represents an established institution and who you know will be there for you if the going gets tough. Your loan representative will be able to give you a breakdwon of all the costs to obtain the loan through a "Truth In Lending" statement.
3. MAKE A PLAN - When is this going to happen? Is selling a current home involved and is that home in good condition to be marketed? Do you have a REALTOR, a mortgage lender, an attorney on your team? This may be a good time to do some research about community features and schools. Don't just go to real estate web sites to start looking at homes. Find the School sites and information about the community.
4. REVIEW THE INVENTORY - After looking at homes on the Internet plan to go out with a REALTOR to get acquainted with the offerings in your price range. Remember, homes can look much different than they sound on the Internet. Agents have a way of covering up undesireable aspects and not telling all the information. Expect this even in the upper levels. Take along your list of requirements and check off how many of them are met by the various homes.
5. OFFERS AND NEGOTIATION - When you find that special home that just feels perfect it is time to act. By now you should have a good working relationship with your REALTOR so all the paperwork and processes won't be so overwhelming. Your REALTOR can conduct a Buyer's Market Analysis that compares the home you like with others that have sold in the area. Write an offer that reflects the value of the home to you and that allows you a little room to negotiate. It is best to try to take your personal feelings out of the equation. You don't want to be offended by the actions of the seller, and by the same token he shouldn't be upset with your offer.
After the offer is accepted you will have time to conduct inspections and to obtain formal loan approval. These are the "contingencies" and they should be handled on a timely basis.
At the closing your will sign all the Mortgage documents and a Note which is a promise to pay. The Mortgage company will become a "lein holder" to secure the loan.
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