10 Steps to Buying a Home
By Marcella Lambert
Buying a home is a process you’ll want to understand before you jump in. Learn tips from finding and financing the perfect home to inspections and closing the deal.
Knowing these 10 steps to buying a home will open doors and make your real estate buying process more manageable. Marcella and your Sonoran Sky Real Estate team will be with you every step of the way, guiding you to make the best decisions possible.
Step 1: Get Ready for Home Ownership
- Build a good credit history. If you need help, call us for a list of great lenders who will outline a solid credit building plan for YOU …for free!
- Save-up for a down payment, typically 5-20% of the property’s value, even less if you qualify for VA or FHA loans
- Consider creating a separate house fund for future furnishings, repairs, and improvements
- Shop loans, lenders and rates
It is important to keep your credit score stable and in-check during the home buying process. Wait to purchase or lease any big-ticket items or change jobs until long after the closing date of your new home.
Step 2: Start Your Location Research Early
Drive areas you like using this phone app to check out homes and prices as you go. Use the Arizona Buyer’s Advisory to learn the pros and cons of buying in various Cities, Towns, and neighborhoods, as well as what to look for, and avoid, in a home.
- Visit neighborhoods during the day and evening
- Talk to people
- Check-out nearby schools, parks, restaurants, etc
- Read local information on trending areas
- Decide which areas fit your lifestyle
Let Marcella Lambert at Sonoran Sky Real Estate know the areas you like best to receive your customized MLS search with up-to-the-minute listing delivered right to your inbox. Watching these listings will give you a good idea on prices and the length of time homes stay on the market. Reading websites, newspapers, and magazines about local area trends and happenings will also give you a sense of the areas market value.
Step 3: Find Your Lender and Determine How Much House You Can Afford
What loan should you choose?
Interview lenders. Ask Questions. Find out what types of mortgages you quality for, what different loans will cost you, and who offers the best terms. Every buyer has their own priorities when choosing a mortgage, so lenders offer a wide range of programs they can customize to your needs.
A fixed-rate loan has a higher interest rate, but your payment stays steady over the life of the loan. A variable rate loan will be lower in the beginning but fluctuates from year to year with the market. There are 80/10/10 loan that help you eliminate mortgage insurance early on, and loan that “re-cast” allows you to add an additional down payment after closing. A 203(K) can be used for remodeling, and a FHA loan takes less of a down payment. There are loans for first-time buyers, and loans that might assist you with a down payment. There are special programs for teachers, doctors, first responder, and Veterans.
Take some time to find out what is available and right for you.
NOTE: Do all your lender interviews within a two-week period so credit reporting agencies do not count multiple pulls on your credit as a negative.
Loan Closing Costs to Consider are:
- Property Taxes
- Homeowner’s Insurance
- Lender,Title and Escrow Fees
- Loan Fees and Insurance Policies
- HOA Pre-Paids and Transfer Fees
Monthly Bills to Consider might be:
- Car Payments
- Student Loans
- HOA Dues and Assessments
- House Payment
- Insurance Payments
- Credit Card Debt
Step 4: First, Get Prequalified – and Later Pre-Approved for Your Mortgage
Before you start looking you’ll need to know how much you can spend. The best way to do this is to get “prequalified” for a mortgage. It’s easy. You’ll provide your lender with your basic financial information, such as income, savings and investments, debt, etc. Don’t leave out any federal debt, like a Perkins student loan, even if they have stopped sending you bills!
Your lender will determine how much you can borrow. In general, you should look for homes that cost no more than three to four times your annual household income if you plan to make a 20% down payment and have a moderate amount of other debt.
Your lender will provide you with a Pre-Qualification Form (PQ) which you’ll need to submit an offer on a home. The stronger your PQ, the stronger your offer!
Later, after you’ve selected a home, you will go through the “pre-approval” process which culminates in getting your mortgage. This process involves providing the lender your financial documents (W-2 statements, paycheck stubs, bank account statements, etc.) so they can verify your current financial status and credit.
You will need to be expedient in responding to requests made by your lender in order to stay on track with the loan and protect your earnest money.
Step 5: Determine Our Plan of Action and Choose the Right Home for YOU
A home is more than just a spot on the map or a collection of rooms and walls. A home is where you live, enjoy your family, entertain your friends, relax, and rest your head at night. Since so much of your life is spent in your home, choosing the right home is an important decision. Your Sonoran Sky Real Estate will not only open door for you, they will be there every step of the way to make sure YOU get the very best deal.
Consider your priorities and create a list of features you are looking for in a home
Think about the location and price as well as your current and future needs. Is your family growing or shrinking? Will mom and dad need a room in the future? Is living in a trending neighborhood more important than a 4th bedroom? Would you trade a large yard for a shorter commute to work? Do you need 1 parking space or a 3 car garage? Is a single-level home going to be easier on your knees? Your Sonoran Sky Real Estate Agent is an expert at helping you narrow down choices and finding the property that best suits your needs.
Additionally, we will provide you with extremely valuable insights and information that isn’t easily recognized by home shoppers. We will negotiate powerfully to get you the best terms and pricing, as well as keep your transaction on track to a smooth close.
Best of all, as a buyer our service does not cost you additional funds as we are compensated from the commission paid by the seller. PLUS, we routinely save our clients thousands of dollars through negotiations, disapproved inspection items, calculating home values and other services.
Together, we’ll determine and prioritize what is important to you. We’ll discuss your needs, wants, timeline, and expectations in buying a home. We’ll refine your home search to meet your criteria, plus give you access to the MLS so you have accurate, up-to-the-minute listing information.
Once we’ve identified homes of interest, we’ll schedule tours so you can take a closer look. Shopping for the right home can take hours, days, weeks, or months. But no worries, take as much time as you need to find the right home.
Our ultimate goal is to make sure you are completely happy with the home you select and become huge fans of Sonoran Sky Real Estate!
Step 6: Make an Offer
Once you’ve found the right home, we will work up a competitive market analysis (CMA) and review area stats, neighboring home conditions, and recent sales to help you determine the home’s value. We’ll work with you to calculate an offer price, range, terms and strategy to place a competitive bid. But be prepared, a Seller may counter our offer.
When you and the Seller have reached an agreement the contract will be executed and we can open escrow. At that point you will have 24 hours to bring your earnest money to the escrow company.
Step 7: The Inspection Period
Purchase offers are contingent on the buyer being satisfied with the property after they have had time to look into all that is important to them. You’ll want to read the Seller’s Property Discloser Statement, Insurance Claims Report, CC&Rs, HOA Rules, Title Report, call your insurance agent to made sure they can insure the home, checked the zoning, investigated any items of interest, research the area, and completed all desired home inspections.
It’s a lot to get done in a very short period of time but a good inspection helps you know exactly what you are buying!
Refer back to the Arizona Buyer’s Advisory and the Purchase Agreement to help you decide what to look into and which inspections you want done. Basic home and pest inspections are a must and should tell you what to look into further.
Our team will arrange times for the Seller to make the home available to your inspectors. You should try to be there towards the end of the inspections to hear the inspector’s review and findings. If the inspector finds issues, you’ll need to get bids for repairs.
Both you and the Seller will receive the inspection reports. We will help you decide what you might ask the Seller to fix before closing, or maybe negotiate a credit so you can fix items yourself after closing, or even cancel the contract altogether and get your earnest money back. If the Seller is to fix items, they are to provide receipts of repairs and you will have a chance to check they were done right at your pre-closing walk-through.
Step 8: Have the Home Appraised
After the home passes inspection, your lender will arrange for an appraiser to provide an independent estimate of the property’s value. The appraiser is a member of a third-party company and is not directly associated with the lender or the Seller. If the property appraises for value or higher, the appraiser will let all the parties involved know that you are paying a fair price for the home and the transaction will continue toward closing. If the appraisal comes in too low, we can negotiate a new price with the Seller. If the Seller won’t come down, you can back-out of the deal and get your earnest money back.
Step 9: Working with the Lender, Escrow, and Title Company
Your Lender is the person or company arranging for your mortgage.
Escrow is the period of time it takes to complete the remaining steps in the home buying process.
Title is the term used to describe the work done to research the paper history of the property; ownership, liens, back taxes, encumbrances, easements, CC&Rs, HOA information, etc.
You’ll need to read the Title Report very carefully to make sure the property does not have any hidden issues that may prevent you from using it as you intend. Talk to the Title Agent listed in the contract if you have any questions about the property having a clear title.
NOTE: It is VERY IMPORTANT you verify all email addresses, texts, and phone numbers when discussing your transaction with anyone! This is especially true for your lender, title, escrow and us. If you are unsure if someone contacting your is legitimate, call the title company’s number in your contract. Know that your REALTOR or their office will NEVER contact you regarding wiring funds.
Wire fraud is rampant! Do not let scammers get your funds!
There will be loads of paperwork to keep up with during the home buying process. It is imperative you supply information and return required documents to your lender, title, escrow and your agent quickly in order to keep your transaction on track.
10 days before closing contact the utility companies to start service in your name for the date escrow is to close. Call us for a list of companies and their contact information.
NOTE: It is a good idea to have more than one name on your utility accounts, even if it is a friend or family member not living at the home and who will not be responsible for the bill, but can speak for you in the event you cannot. Utility companies will not allow others to speak for you in an emergency if they are not listed on your account.
Before closing review the loan and escrow documents.
Verify the terms and fees are as you expect, and visit the title company to setup delivery of your down payment. REMEMBER! Always use the phone number in the contract to call the escrow agent.
Step 10: Closing
Before the closing day, you will review and sign loan docs and other paperwork required to complete the purchase. Depending on how things were timed and where funds are coming from, it can take a couple of days for your loan to be funded after the paperwork is returned to the lender.
Once funded, the escrow agent will have your deed recorded and you will be the new owner of the home!
Keep your credit score stable and in-check by waiting to purchase any big-ticket items until after closing on your new home
Do your lender interviews within a two-week period so credit reporting agencies do not count multiple pulls on your credit as a negative
Read the Purchase Contract and all documents
Ask questions and get clarification BEFORE SIGNING
Return requested documents promptly to avoid losing your earnest money
Use KNOWN phone numbers and triple check email addresses to avoid scammers
Thoroughly research and inspect a home during the inspection period
About 10 days before closing schedule utilities to be moved into your name for the day of closing
Deliver your down payment to the escrow company
Keep original closing documents warranties, insurance policies, contracts, etc in a safe place
Here is a Glossary of Real Estate Terms used to better understanding of all the moving parts of your transaction.
We look forward to working with you!
We LOVE our clients …and good reviews! If you’re happy with Marcella Lambert and our team at Sonoran Sky Real Estate, please leave a review on Google, Yelp, Zillow, and/or Facebook.
THANK YOU FOR TRUSTING US WITH YOUR
REAL ESTATE NEEDS!!
Published on 2019-06-20 20:21:56
Putting YOU first! As an Arizona native I've witnessed the Valley of the Sun grow from dirt roads to superhighways. Having watched Metro Phoenix develop and adapt over time gives me a unique perspective on communities, trends, and values. Whether choosing a location that complements your lifestyle, getting your place ready to sell, or finding multiple cash flow properties, allow me to be your local go-to expert. As a real estate agent, I am known for my outstanding client relations, strong negotiating skills, and precision attention to detail. I will negotiate you the best deal, then bring your transaction to a smooth and successful close. But I won't stop there. My motto is "You don't close a deal, you open a relationship." My goal is to turn you into a raving fan. How? By treating you and your transaction with such care, not only will you come back again and again, you will tell all your closest friends and family about my exceptional service. Having the right agent on your side saves you headaches, time and money! You know, they say the difference between ordinary and extraordinary is getting that little "extra”. Well, that’s what I’m here to give you. Whether you are buying or selling, my knowledge, strong negotiation skills, attention to fine detail and mindfulness of critical time lines, will work to get you the BEST POSSIBLE DEAL. I’ll help you avoid costly mistakes and law suits by expertly negotiating your contract and meticulously managing your transaction. BUYERS: Tired of spending hours online and in the car looking at homes that do not check all your boxes? Or worse, finding that perfect home only to have it sell right from under your feet because you weren't ready to make a strong offer? Let me help. Together we’ll get you pre-approved and find that perfect home. Then we'll create the wining offer that gets you your dream home at a great price. Call me. Any time. SELLERS: You can go two ways, sell cheap and get out fast, or, use my knowledge of "bang for the buck" improvements and some elbow grease (...or my trusted vendor Rolodex) to put a shine on your home that will bring you top dollar. Both ways work. The “right” way depends on your needs and goals. But do know that you don't need to give 10% to 20% of your equity to a discount broker to make a quick sale. What you need a professional marketer and negotiator on your side. Call me, and I'll help you keep more of your equity in your pocket. And, did I mention my commission is flexible? Because it is! DOWNSIZERS Are you an empty nester? Ready to enjoy a more carefree lifestyle while living in a vibrant community rather than listen to your own footsteps echo in your too large, hard to maintain home with that pool you never use? Or is it time to help mom and dad transition into a home that will make life simpler? Do they need help disbursing treasured items and family keepsakes while pairing down on household goods so they fit into their new place? Don’t pull your hair out! Call me. I can help. I have years of experience liquidating large estates. My proven downsizing plan starts with a FREE consult. Afterwards, you’ll get a custom, simple to follow, step-by-step map to get the job done. Need more help? I have a Rolodex of trusted vendors. We can help you sort, ship, liquidate, and prepare your home for resale. We’ll even get you moved into your new place. Call me. We’ll get this DONE!More post from Marcella Lambert