Buying your first home is a major, life changing decision that will impact the immediate and long term future of yourself, your spouse, and your current or future family. When contemplating buying your first home, there are many factors to consider, and what seems to be an endless list of things that need done. So, where do you start?
First, you want to be sure you are in a good position to purchase a home, personally. Are your finances in order? Is your job steady? Are you disciplined to make the payments on time every month? Do you have savings in case something happens to the house that you need to fix?
Second, you need to decide what area is the best for you in the mid-term, and possible long term. Is the area on the rise, or is it declining? Are employers coming in, or are they leaving? What about the schools? Is it conducive to your lifestyle? You want to be satisfied with the location, keeping in mind that in 7-10 years you will probably be in a better position, and be looking for another home, your “forever” home. (Ever heard of the 7 year itch?) A good Realtor can help you determine the pro’s and con’s of different areas.
The next thing you want to do is to find a good Realtor who knows the market and is available. Don’t just go with one that you know through so and so. Find one that is reputable, and has positive reviews. A good Realtor will be able to help you determine the best area for your situation. A good Realtor will also be able to help you figure out which program will work best for you. There are a slew of options, FHA, USDA, Conventional, VA, Insured conventional. A Realtor knowswhat would work best for you.
A good Realtor will also advise you to get pre-approved by a mortgage broker they have formed a relationship with. A mortgage broker will review your credit and income, and let you know how much you will be approved for. It makes no sense to look at homes you can’t afford, in fact, it is down right mean! It is almost always better to get with a local mortgage broker, then it is to go through a big bank. You also want to make sure you are comfortable with the payments that go along with the amount you are approved for, and have your Realtor reduce the price of the home to the maximum payment you would feel comfortable with.
Once you have an approved and agreed upon maximum budget, it is time to start looking at homes! Most Realtors will set you up with an automated email search through their local MLS/BLC. (Realtor system) This will send you an initial list of every home that meets your criteria within your price range, and will update you with any new listings or price reductions the first day they hit the market. From there, you and your Realtor will come up with a list of homes you want to see, schedule the showings, and see which one you like the best. The key in searching is to be flexible, and ready to pounce when you see a home you may be interested in. Keep in mind, that other people are getting the same emails you are, and will probably like the same home you do. It is first come- first served.
Once you choose a home you want to purchase, it is time to put the offer in. A good Realtor will know the market condition of the area, and advise you on what he thinks the offer should be. Sometimes you go higher than list price if you really want the home. If you are asking the Seller to pay closing costs, sometimes you offer a higher amount, to include the closing costs in the price. It all depends on your situation, how much you like the house, and the market conditions for that neighborhood or area. There is no rule of thumb, it is a case by case basis.
After you put an offer in the Seller either accepts it, counters, or rejects it. If they accept, great! If they counter, you can counter back, accept, or reject.
Once you have an accepted offer, you order the inspection of the home. An inspection will detail every possible and minute flaw the home has. It is important to be reasonable during the inspection process. Here, buyers’ remorse sets in. Oftentimes, I’ve seen this as the reality check of buying a home, and the process loses its magic. Don’t fret. A good Realtor can advise you on what to ask the Seller to repair before closing. Every home is going to have something wrong with it, the important thing is weighing the pros against the cons, and determining the costs of fixing it, and being reasonable.
During this process, your lender will order the appraisal. The Appraiser will go out and compare your home to recent comparable sales in the area. This is the bank’s safeguard against loaning too much on a house. The appraiser will submit the report to the bank detailing their opinion of the market value of the home. 90% of the time, appraisals come back without issue. If the home doesn’t appraise, their are a slew of options from Seller reducing the price to the appraised price to backing out of the deal and going back on the hunt.
Once all these things are done, closing will be scheduled. At closing, you and the Sellers go over the closing statements, which detail all the charges and credits in the transaction on both sides. You both sign a bunch of paperwork, you go over and sign off on your mortgage, pay anything you need to pay, and at the end of it, you get your keys and take title to the home, and become homeowners!
Shew! It seems like a lot, and quite frankly it is! If owning a home was easy, everyone would do it! What I can tell you is that it is worth it, and after you get those keys in your hand, you forget about all the stress!
If you are interested in buying a home now, or in the future, reach out to me. The best part of my job is to watch people’s dream of owning a home come true.
Avery Garrett is a top Indianapolis Realtor serving the Indianapolis Metropolitan area from Coldwell Banker Kaiser. Avery is Zillow.com Premium 5 Star Agent and Top Contributor, and is a Member of the Metroplitan Indianapolis Board of Realtors. Contact Avery for a complimentary, no obligation, Market Analysis of your home at 317-721-2274, or SoldByAvery@gmail.com. See Avery’s reviews and search for a home at www.SoldByAvery.net.
Avery is proud to help home sellers and home buyers in the following communities: Carmel, Fishers, Noblesville, Westfield, Cicero, Sheridan, Lebanon, Zionsville, Brownsburg, Avon, Danville, Plainfield, Mooresville, Camby, Greenwood, Bargersville, Martinsville, Franklin, Shelbyville, Southport, Beech Grove, New Palestine, Greenfield, Lawrence, Greensburg, Nashville and beyond.