Home Buying 101
Home Buying is a huge decision that most people make only once or twice in their lifetime. So many unexpected things go into buying that the process can feel overwhelming for first time home buyers. This guide will help walk you trough each step of the home buying process so that you can be better prepared when buying a home.
Home Financing
Before actually going into the market and looking for a home we have to figure out how we’re going to finance it. Unless you’re one of the lucky few who can afford to buy a home cash most of us will need to apply for a mortgage to finance our new home.
Even if you can afford to buy a home in cash using a mortgage is great way of leveraging your money allowing you to own Real Estate for as little as 3.5% down. To apply for a mortgage lenders will typically want to see 2 years worth of taxes and decent credit among other requirements. To find out more about applying for mortgage click here.
Real Estate Agent
One of the first things that you will want to do is hire a Real Estate Agent. Why hire one? Well A Real Estate agent is your right hand to home buying a home… your link to the Real Estate market. A good one will have great market knowledge, negotiate on your behalf, and make the whole process seem effortless. And the best part they can be paid by the seller making their services free to you!
The Home Search Begins!
You’ve figured out your financing and found a great agent to work with. You’re now ready for the fun part… the home search!
Throughout your search you might look at all types of homes.. big and small, blue to whites, gorgeous baths to what is that. So it’s important to keep in mind the type of you want. Size, location, home condition, and features greatly affect a homes price. For a more effective home search define what home features are most important for you.
Sending an offer
After weeks of searching you’ve finally found the home of your dreams and are now ready to send an official offer. How is this done? This might vary depending on your market but in Denver, CO this is traditionally done trough the DORA “contract to buy and Sell Real Estate” . Which is basically an official contract that has all the important info such as deadlines, terms, price and more regarding your home offer. This is traditionally done by your real estate agent so no need to learn it all just know its the official contract you’re making with the home seller to purchase their home.
Inspections
When buying a house , you want to make sure its in good shape and that you wont have any unexpected repairs after closing. Getting a professional inspector who knows exactly what to look for is a great idea. Home inspectors run a series of test on the home from top to bottom taking note everything that needs or will need repair. Click here to see a list of the top 5 costly repair items to look out for during a home inspection
Appraisal
A home appraisal is an important process of determining the value of a property. Lenders require this to better asses a home’s value but it can be requested by buyers during the negotiation process. A home appraisal typically includes a detailed evaluation of the property, including its condition, a look at recent home sales, comparable to the subject property, and estimation of market value. Home appraisals involve several factors that determine an accurate price. These factors include the age, condition, and size of the home, the location, the amenities available nearby, and the state of the real estate market. A qualified and experienced appraiser is critical in order to provide an accurate and reliable appraisal.
Closing Day!
You’ve made it through through the end… closing day. This is the day where all the papers get signed and you’ll officially become a home owner. Some of the most important docs you’ll sign this day will be:
Settlement Statement – Think of this like your receipt. It states all the money distributed during the transaction.
Loan docs – The contract you’re signing with the bank stating all their fess interest and your promise to repay the loan as outlined by the contract.
Home Deed – The official transfer of property
Moving day
Congrats, you’re officially a home owner and its now time to move into your new home. Homeownership is incredibly rewarding experience that has tremendous benefits. When you own a home, you have the satisfaction of turning it into your own castle, filled with the features and amenities that you want to enjoy and serve you best. Additionally Homeownership can be an investment in your future, with the potential for appreciation of property values. So not only will you be surrounded by the beauty of owning a home, you will also be able to benefit financially in the years to come.
Pro Tip:
Remember to transfer utilities and set up any cable or internet ahed of time.
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