So it's finally time for you to be an "adult" and that means you're thinking about purchasing your first home! Here is what you need to know...
Before you hop on Zillow and find 18 options for your first home ever... let's get you prepared for the process so that it flows as smoothly as possible!
Step 1 | Consult with an agent
Reach out to discuss your goals when buying a home!
During the consultation with a real estate agent, it is important to discuss everything and anything that is important to you regarding your home purchase. I would break down the whole 30 minute consultation for you, but you would get bored and stop reading on Step 1 so I won't do that. But, I want to get your brain flowing about the importance of the consultation so I added a list of things for you to go over.
Questions for you to think about (because your agent will ask in the consultation):
What area do you want to live in?
What type of home? (Single-family, Townhouse, Condo)
How many bedrooms & bathrooms do you need?
What size (square footage) house would you like?
1 story or 2 story?
Pool?
Do you want a Home Owners Association?
When are you looking to move? If you are renting now, when is your lease up?
Do you need to be in a certain school district or distance to a school?
Note: Buyers DO NOT pay real estate agents for their services.
Step 2 | Chat with a lender & get Prequalified
This is soooooo important! This is for your home loan. In order to get your Prequalification form, you must speak with a lender and send in all docs (proof of income, tax returns, employment verification, etc). Depending on the type of loan, you may need to submit more docs to the lender. If you don't have a preferred lender/mortgage officer, I have one that will take the best care of you!
*It is crucial to get your Prequal form BEFORE doing any home shopping or showings because you do not want to fall in love with a property that is out of the price range, won't accept your loan type, etc.*
If you don't think you have enough cash to buy a house, you're probably WRONG!
Within the conversation with your loan officer, you will discuss the amount of cash you need to purchase a home. They will typically use the term "cash to close," which is literally the dollar amount of cash you will need to close escrow on your new home. "Closing costs" (aka lender & title fees) is usually around 3% of the purchase price & due at the same time your down payment is due. If your a first time home buyer, this can already seem like an overwhelming amount of cash due... But your lender will tell you that we can ask the seller to pay for your closing costs! This leaves you with just the down payment!
A down payment with an FHA loan (most common for first time buyers) would only be $10,500 on a $300,000 home!
Step 3 | Start your search
It's finally time to start shopping for your new home! As discussed in the consultation with your real estate agent, your search will begin based on your needs. I have two media platforms that I use for my clients. One is super user-friendly & pretty, and the other gets down to the legalistics of each property (the boring, but necessary stuff) Both send emails immediately when a property that fits my clients needs becomes available.
Once you find a house or houses that you like, it is time for you and your agent to start the showings!
Showing Tips:
Don't see more than 5 houses a day (they begin to blur together & you can't make a clear decision or remember if you even really like the house)
Don't get discouraged - you can find your dream home on the first day or 1 year in
Take notes on each home that is a possibility
Be honest with your agent! 99% of the time it is not their house, so if you don't like something about the property, let us know so we can spare your time in the future!
Only look in a price range you feel comfortable
If you can, sleep on your decision - compare each possibility
If you can't sleep on your decision (the property is in high demand), OFFER ASAP - it is better to have an offer written and submitted than to not have any chance at all
Step 4 | Submit an Offer
Now that you found THE HOUSE, it is time for your agent to write an offer for you! The Arizona Purchase Contract is 7 pages, so let me break down the important stuff for you...
The purchase price - based off of comps (other closed deals in the neighborhood) that your agent has found.
Close of escrow date - this is the day you hand over that big check with your down payment and get the keys! Usually 30-45 days after contract acceptance, but always consider when is the BEST TIME FOR YOU to close on the home
Inspection period - your agent should have a good idea of how many days they need to complete all inspections. If there are other competing offers, a shorter inspection period will impress a seller. If your agent is confident that they can get everything done in a shorter period, TRUST THEM! This can make or break the deal for you getting the houses. *I preform general home inspections and termite inspections on all properties. Houses built before 1978 require more inspections.*
Home Warranty - I will always ask for a seller to pay for the best plan from a home warranty company. This typically runs around $500. If the seller refuses to pay for it, I purchase it for my clients.
Finally, once your agent has written the offer based on all of your needs, it is time for you to sign the contract so they can submit it to the listing agent!
Step 5 | Under Contract to Close
Once your offer has been accepted, you are under contract! The inspection period starts the day after acceptance. From that point, you have X amount of days to preform the necessary inspections. The buyer pays for inspections out of pocket at the time of the service, so make sure to have that in your budget and be prepared. Before inspection period is up, you will decide what repairs you want to request. Your agent will write up the requested repairs and get to negotiating!
After all repairs have been negotiated and decided on, it is time to order the appraisal! During this time, it is important to be in touch with your loan officer, as they will always be requesting multiple documents they need in order to get the deal closed. Let the agent work on the transaction while you get everything you need for the loan. & don't worry, you are in good hands!
Lastly, it is time for you to sign the papers that will make you an official homeowner! This is the day you bring your down payment check & hand it over to the title company! Also, you sign a ton of boring papers that make all of this possible. Don't stress though, we have it covered on our end. It's what we have been doing the past 30 days.
& now you are a homeowner!
If you have any questions regarding the home buying process or need me to elaborate on any topic discussed, please reach out! No question is a stupid question! Let's make you a professional home buyer even if it is your first time!
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