Home Buying Checklist
Searching for a home buying checklist online can be annoying because so many of those websites are not written by veteran agents with decades of experience. They are often just a compilation of ideas put together by a writer or journalist. Not real world and not always practical. As a full-time Realtor, I help to guide buyers down the path of homeownership in a logical fashion. Below is my personal home buying checklist:
1. Find a Real Estate Agent
First and foremost, a good real estate agent can answer all of your questions and point you in the right direction. Even if you are not ready to buy for a while, an agent's advice will be invaluable. Avoid early disappointment. You cannot begin the process of determining a sales price until you get prequalified, nor look at homes until you know how much home you can buy, all of which an agent can assist. Here are some tips to get you started:
- Most buyers work with the first agent they run into or a close family friend. You can find an experienced professional who will listen to you, conduct herself ethically, and knows your market well through referrals, open houses and other recommendations.
- Study the rules for working with a real estate agent to make sure the entire process moves smoothly for you.
2. Talk to a Mortgage Lender
Lenders come in all types. Some make only certain types of loans. Others have a broader ability to match a loan to specific needs. Don't automatically assume that the place where you maintain a checking account is the best place to get a loan. Ask your real estate agent for a referral. Agents know which lenders perform and which do not. This checklist will help you find the best loan:
- Get a free credit report from the only reputable place online to obtain such a report. Don't bother paying to get a FICO score because your lender will use a different service.
- Just because you like a lender's website is no reason to get a loan from that lender. First study the various places to get a mortgage loan.
- There are many types of mortgage loans, make sure you choose the mortgage best for you. Ask your agent how easy it is to get some of these financing contingencies accepted by a seller.
3. Get Your Finances in Order
Once you have determined your down payment amount, set the funds aside and do not alter your financial situation. Lenders will track all monies coming into your checking and savings accounts, and large unexplained sums or monies from unusual sources could cause difficulties. Ideally, you want the money in your account for two to three months, which is called "seasoning." Make sure you:
- Get a preapproval letter. There is a difference between being preapproved and prequalified, and preapproval is better.
- Do not make any large purchases on credit or by diluting your cash reserves. Learn what can go wrong in underwriting that could cause your loan to be rejected.
- Study the top three loan approval mistakes made by home buyers. Presenting the wrong type of preapproval letter could affect your chances of offer acceptance.
4. Find the Perfect Home
The best thing about home shopping after following this home buying checklist is the fact you have covered all of your bases upfront. You know you are prequalified to buy a home. You know you have the funds available to purchase. And you know you have hired the right real estate agent to help you successfully navigate the journey of home ownership. These steps will help you reach your goals:
- Once you have selected a neighborhood, you need to find a home to buy that meets your price range and fulfills your desires.
- Even though your agent is sending you listings every day, some buyers cannot resist the do-it-yourself approach and want to find the best places to find homes for sale online.
- Rarely will a foreclosure be your best option but that doesn't stop buyers from wanting to find foreclosures and government-seized homes.
5. Make a Purchase Offer
Little is worse than writing offer after offer and none accepted. It can dampen your spirits and make you start to wrongly believe that you do not deserve to buy a home. Start by listening to your agent's advice. Don't be that buyer who thinks she knows best or you may become that buyer who needs to learn the lessons of rejection. Follow these tips to catch the eye of the seller:
- When you find the perfect home, you need to immediately make a purchase offer. Many buyers are looking at the same homes who have similar desires and tastes.
- If you encounter a multiple-offer situation, make your offer shine above all the rest by seeking out expert advice from your real estate agent. Some lucky buyer will win and that buyer could very well be you.
- Study the market comparables and your present type of real estate market, which changes all the time. Then learn to how make an offer to buy a home that will blow the seller away.
6. Close on Your New Home
Once your offer is accepted, you will enter the process of closing on your new home. Part of the home closing process involves due diligence on the part of the buyer. Talk with your agent about types of inspections you might want to order and the timeframe for your contingencies. These steps will help you close:
- First order of business is to obtain a home inspection for your own edification. Use this handy home inspection checklist to make sure you examine the essentials.
- Set aside funds for your home buyer's closing costs. This is money in addition to the balance of your down payment.
- You may pay upfront for an appraisal from your lender. Here is the entire home closing process, and the types of mistakes that can cause delays.
As of this writing, Elizabeth Weintraub, Cal BRE #00697006, is a broker-associate at Lyon Real Estate in Sacramento, California.