Home Buying Process – What To Expect
Buying a home can be both exhilarating and overwhelming. It’s a multi-step process that requires careful planning and diligence. For most people, buying a home is the largest investment they will ever make in a lifetime. For this reason, home buyers should seek the assistance of a real estate professional to help them successfully navigate through the home buying process and to avoid making costly mistakes they could regret.
During the process of purchasing a home, there are literally dozens of decisions to be made, many documents to be signed, and unfortunately many traps inexperienced (and even experienced) home buyers can fall into if not careful. Purchasing a home is a substantial financial investment. Working with an experienced Realtor® to guide you through the process and provide you with expert recommendations only makes sense. An example of a common mistake home buyers make is purchasing a home at a reduced price without taking in consideration property values and recent sales in that area. Sometimes an apparently good deal is not that great of a deal at all. Property values in the neighborhood you select have a direct effect on the value of the home you want to purchase. If values keep on going lower in the community where you purchased a home, you risk being upside on your mortgage and lose money when it’s time to sell.
DID YOU KNOW THAT IN THE COURSE OF A USUAL REAL ESTATE TRANSACTION, THERE ARE ABOUT 200 DOCUMENTS THAT NEED TO BE REVIEWED FOR ACCURACY?
At Cornerstone Realty of the Carolinas, we provide expert real estate services to first time home buyers and repeat home buyers in the Charlotte NC area. If you have questions about the home buying process and/or would like one of our Realtors® to assist you with the purchase a home in Mecklenburg, Union, Gaston, Cabarrus, Iredell or Stanly County, give us a call today at (704) 837-4672 or email us. We work very hard to make the home buying process as easy and pleasant as possible for our clients.
7 Steps to buying a home
From start to finish, the home buying process involves several steps which are listed below:
STEP 1: Deciding to become a homeowner
As obvious as it sounds, the first step in the home buying process is to take the decision to become a homeowner and being committed to achieving that goal. If you are not 100% committed to own…wait until you are to start the process. Purchasing a home requires efforts, commitment and patience.
For your search to be successful and to make it clear what type of property you are looking for, you should draft a property “wish list” with your “must have” and “would be nice to have” features for your future home. Your wish list should have lots of details. The better you know what you are looking for, the more focus your search will be. Ask yourself the following questions:
- Where do you want to live?
- If you have children, do you have requirements for what school you want them to attend?
- What is your price range?
- Are you looking for a brand new, resale, foreclosure or fixer upper?
- What style of home do you want?
- Are you okay with homeowner associations?
- How many bedrooms and bathrooms do you want?
- Do you want a large kitchen? family room, car garage?
- Do you want a large yard or a small yard? Fenced?
- What kind of amenities are you looking for?
Here is a sample dream home wishlist you can use.
When preparing your dream home wish-list, you should also take some time to review your finances. There are upfront costs associated with the purchase of a home – down payment and closing costs. How much money do you have saved up for a down payment (5%, 10%, 20%, none?). Do you need to qualify for a down payment assistance program to help you with your down payment? Do you have enough money saved up to pay for your closing costs (usually about 3.5% to 5% of purchase price) or do you need your Realtor® to negotiate closing costs on your behalf with the seller?
STEP 2: Prequalifying for a mortgage
Unless you intend to purchase a home with cash, you will need to prequalify for a loan. A bank or a lender will pull your credit and determine based on your credit score, income and debt profile how much you can afford to borrow for the purchase of a home. This is a really important step. As Realtors®, we have come across many home buyers who spent quite a bit of time researching homes and driving around neighborhoods without first finding out if they are qualified, and if so for how much. Don’t make that same mistake. It’s better to know ahead of time if you are qualified to buy and what you can afford so you can search for homes that are within your budget.
It is FREE and fast to find out if you prequalify through one of our preferred lenders or through your own personal bank if you prefer. When a bank / lender pulls your credit, it will reveal if there are credit issues that need to be repaired. If you have credit issues, you can start repairing your credit early instead of later and eliminate the risk of losing your dream home to another home buyer who is already pre-qualified and ready to make an offer.
At Cornerstone Realty of the Carolinas, we make it easy for you to find out if you prequalify. We have already done the homework for you and found the best local lenders in the Charlotte NC area and we work with those lenders on a regular basis. We can take an application for you over the phone or setup an appointment for you with a lender. If you want to use one of our lenders (and make it a lot easier for yourself), just call us at (704) 837-4672 or complete our online application and a licensed real estate professional will call to gather some information from you. The over-the-phone application process only takes a few minutes and we will let you know whether or not you qualify for a loan within 24 hours of taking your application. All information we collect from home buyers is kept strictly confidential and only shared with the lender that will be pulling credit.
STEP 3: Real estate disclosure
Once you have been prequalified by a lender, we will arrange to meet with you. We will go over a few real estate legalities, sign a few documents with you and discuss your real estate and mortgage needs. We will also go over, in details, the remaining steps involved in the home buying process so you know what to expect.
STEP 4: The home search
After our initial meeting, we will start searching available properties that meet your criteria. We will compile a list of properties for your review. From that list, you will be able to select homes you would like to view. Once we have a “short list” of homes from you, we will schedule appointments so we can show you the homes you selected. We will share with you detailed market data about each of the homes we visit to help you narrow down your list.
STEP 5: The offer
After you have identified the “one home” you really would like to own, we will help you structure an offer based on market values and other data. We will, under your directives, negotiate price and terms on your behalf with the seller. Having us negotiate on your behalf will allow you to keep emotions out of the way. We are highly skilled negotiators and will prepare your offer to purchase so you get the best deal possible. There are a lot of strategies involved with an offer to purchase. We will share those strategies with you so that your offer has the best chance of being accepted by the seller. Once the seller has accepted your offer and signed it, you will officially be under contract and the offer to purchase will be considered executed. Usually it takes 30 to 45 days from that time to close on your home. It can take more or less time depending on the loan process.
Step 6: Appraisal, property inspections, title search, survey and insurance
Once you are under contract for the purchase of a home, the lender will order an appraisal for the property. We will help you select a closing attorney who will perform a title search on the home to make sure it is free of liens and encumbrances. The closing attorney will also be the one who will be holding your earnest money in escrow and help you close the real estate transaction. During this period, your loan will be processed by the lender. Through constant communication with the lender, we will keep you inform of progresses during the loan processing period and ensure that there are no unnecessary delays so you can close on time. In order to find out if the home you want to purchase is structurally sound, we recommend for you to have the home inspected. Most of the time, if a home is brand new, a builder will offer a warranty on the home (usually referred to as a 1/2/10 warranty). Since the home is under warranty, it might not be necessary to order a home inspection, but it is always at the discretion of the home buyer whether or not to have one done.
Once the results from the home inspection have come back, we will go over the report with you and help you decide what needs to be repaired by the seller. We will prepare a repair request on your behalf to be presented to the seller. Please note that if you have selected a foreclosure, all foreclosures are sold as is, which means that the seller will not make any repairs to the property. We will also provide you with a list of homeowner insurance providers so you can select the right company to protect your home. You will usually get a better rate if you combined your auto insurance with your homeowner’s insurance. We also recommend for you to order a termite inspection and a survey to make sure your property is not encroaching on the neighbor’s property.
Step 7: Closing on your home
After the successful completion of all the previous steps and final approval of the loan, we will meet with the closing attorney who will guide you through a large amount of paperwork to be signed so that the deed for the house can be transferred over to you and recorded. We will be by your side during the closing to answer questions you may have and to make sure that there are no errors in the documents you are signing, including the closing statement and the deed. Once all the papers have been signed, you will get the keys to your new home and officially become a homeowner – time to celebrate!