We are more than Half way through our blog series 30 Days to Buying a Home in Utah. Today Ashley Reed is going to give us 10 Steps to Buying a Home. It may seem like a lot of steps but purchasing a home is a huge investment and is also a process. Missing steps along the way may derail any progress you have made. I like to think of it as a marathon (a short one) rather than a sprint. So read on to start your mini-marathon.
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1. Hire your Buyer’s Agent
Call us! Our Agents with The C4 Elite Real Estate Team will sit down with you and go over your goals, wants, and needs. We have helpful information and advice to get you set up on the right track to home ownership. One way we do that is give you a free home buyer guide and a no-hassle or obligation consultation.
As a team we are there for each other. If one of us goes on vacation or have sick kids, you will be taken care of. One of our agents, Ashley, said; “I had a couple come into an open house and tell me ‘Our agent is in Texas for 2 weeks, we are on our own today’. I never want my clients to feel like that and know I can entrust my clients to my team, if necessary”.
2. Talk to a Lender
Ask for lender recommendations. As a team we have a few favorites. We know these lenders are responsive, efficient, and care about you. It is a good time to look at your credit and see if you can buy now, or if you should wait and work on low credit or your debt to income ratio. Check interest rates and go over different mortgage programs with the lender of your choice.
3. Get Your Pre-approval
Once your lender receives all documentation necessary, they can give you a pre-approval letter. Important to note is that sellers ask for this when and offer is made. Sellers want to see if you are ready to buy before agreeing to go under contract. Look at what your monthly payments will be and make sure that’s what you can afford in your budget. What your approval amount is will not always what you want to pay monthly.
4. Find Your Home
This is the fun part! Using the criteria you gave your agent in step one, you are ready to go see homes. Your criteria might change as you see some homes. You might realize some things you need to let go of to get a home in your budget. Research neighborhoods and narrow down your location. Your agent is legally not able to discuss crime rates and other things buyers feel are important. We have websites we can direct you to so that you can look up anything that is important to you. You could possibly get more for your money if you go a little out of your target area. Ask your agent to send you homes in a variety of locations in your price range to see what will work best for you.
5. Make an Offer
You have narrowed it down! Time to pick one to move forward with. It will depend on the current market how aggressive your offer will need to be. You agent will guide you and will provide a market analysis, but ultimately how much you offer will be up to you. Your agent will start negotiations, explain addendums, counter offers, and help find a win-win agreement with the sellers. Be open to compromise and try to put yourself in the seller’s situation to understand their point of view. The anticipation is stressful, while you wait for an acceptance try to find things to distract yourself. However, do not distract yourself by buying anything big. Do not buy a car! Furniture, unless you are paying cash, is out too. Wait until after you close on the home to do any big shopping.
6. Under Contract
Once both parties agree, you are officially under contract. The puzzle pieces are starting to fit together. Additionally, this is when you go into escrow and, in most cases, the seller stops marketing the home. You will give your earnest money to your agent who will deposit it into the brokerage account. Title will do a title search to make sure there are no liens, easements or encumbrances connected to house. The seller will give you the “sellers disclosures”. They disclose what they know is wrong or what past repairs were done. This is helpful but there are things that the sellers can be unaware of, especially if the home was a rental.
7. Due Diligence
Now is the time for your due diligence. Your agent will give you a helpful checklist and can recommend a few home inspectors. Re-check the neighborhood, visit the home at different times of the day, like during rush hour or after dark. If you choose to have a home inspection, the inspector will give you a list of items that might be concerning. The goal is not to get the sellers to fix everything on the list. Look for any deal breakers or major fixes that you would be unable to tackle on your own. If the inspector mentions the risk of other major things like mold or radon you can pay for additional testing.
If you are buying a new build, make sure the builder did all the things you paid for. Have an unbiased inspector look at the home and make sure no corners were cut.
Your agent can help you re-negotiate repairs or the purchase price depending on what was discovered.
8. Financing and Appraisal
Financing and appraisal. Your lender has been working hard in the background while you were doing your due diligence. If the loan requires an appraisal, they will order it with a 3rd party appraisal company. The appraiser will pull recently sold home “comps” (homes that are comparable to the one for sale) and visit the home to complete their assessment. He will send the appraisal to the lender and the lender will give it to you. If it comes in below what you are under contract for your agent can help re-negotiate the contract. The loan will go through underwriting and a final CD (closing disclosure) will be sent to you. You have 3 days to review the CD and make sure the math adds up. Title and your agent will double check it as well. You must, however, acknowledge the CD 3 days prior to your settlement deadline in order to close on time.
9, Clear to Close
Once your 3 days are up, you are clear to close! Your loan is ready to go and title is on the same page. Schedule a day and time before the settlement deadline on your purchase contract to sign documents at your title company. You then have 4 days after signing paperwork for your bank to fund and the title company will record it with the county.
When you can receive keys and gain possession of the home is found in your purchase contract. It depends on what you and the seller agreed upon. Most common is at “funding and recording”, however it can be several days after or before then. Once you get the green light from your real estate agent you can move in!
Purchasing a home is a simple, yet complicated process. You will be grateful to have a real estate professional on your side, call us today!