8 Steps to buying your home

1. DECIDE TO BUY

Although there are many good reasons for you to buy a home, wealth building ranks among the top of the list. There are solid financial reasons to support your decision to buy a home. Among these are equity build-up, value appreciation and tax benefits.

Base your decision to buy on facts. If you are paying rent, you very likely can afford to buy. All you need to do in the short run is find a good buy and make sure you have the financial ability to hold it for the long run. Buying a home doesn't have to be complicated.

2. HIRE YOUR AGENT

The typical real estate transaction involves at times a dozen separate individuals (mortgage brokers and underwriters, inspectors, appraisers, escrow officers, buyer's agents, seller's agents, bankers, title researchers, among other) whose actions need to perform in harmony for a successful and smooth transaction. It is the responsibility of your real estate agent to expertly coordinate all the professionals involved in your home purchase and to act as the advocate for you and your interests throughout the process.

Seven main roles of your real estate agent:

Educate you about your market
Understand your wants and needs
Guide you to homes that fit your criteria
Coordinate the work of other needed professionals
Negotiate on your behalf
Check and double-check paperwork and deadlines
Solve any problems that may arise

Qualifications are important. However, finding a solid, professional agent means getting beyond the resume, and into what makes an agent effective.

Eight important questions to ask your agent:

Why did you become a real estate agent?
Why should I work with you?
What do you do better than other real estate agents?
What process will you use to help me find the right home for my particular wants and needs?
What are the most common things that go wrong in a transaction and how would you handle them?
What are some mistakes that you think people make when buying their first home?
What other professionals do you suggest we work with and what are their credentials?
Can you provide me with references or testimonials from past clients?

3. SECURE FINANCING

If you will be using a mortgage to purchase your new home, securing financing is one of the most important steps in this process. To keep it simple, here are the basic steps to securing financing.

Six steps to financing your home:

Choose a loan officer (or mortgage specialist)
Get pre-approved and pre-approval letter
Determine what you want to pay and select a loan option
Submit to the lender an accepted purchase offer contract
Get an appraisal and title commitment
Obtain funding at closing

4. FIND YOUR HOME

looking for your home begins with carefully assessing your values, wants, and needs, both for the short and long terms.

Questions to ask yourself:

What do I want my home to be close to?
How much space do I need and why?
Which is more critical: location or size?
Would I be interested in a fixer-upper?
How important is home value appreciation?
Is neighborhood stability a priority?
Would I be interested in a condo?
Would I be interested in new home construction?
What features and amenities do I want? Which do I really need?

Once you have assessed these questions you are now ready. With the help of your real estate agent you can begin to narrow down your scope and schedule showings to see available homes.

5. MAKE AN OFFER

Once you've found your home and are ready to make an offer, approach this process with a cool head and a realistic perspective of your market. The three basic components of an offer are price, terms, and contingencies.

Price: The right price to offer must fairly reflect the true market value of the home you want to buy. Your agent's market research will guide this decision.

Terms: Other financial and timing factors that will be included in the offer, these include the schedule, conveyances, closing costs, earnest money, among many other terms such as home warranty.

6. PERFORM DUE DILLIGENCE

Once an offer is accepted and you are now "under contract" or "pending sale" you will have the opportunity to have an inspection performed on the home. There are many well-qualified local inspectors to choose from. The home inspection often includes a 4-points inspection (electrical, plumbing, HVAC, roof), wind mitigation inspection for homeowner's insurance, and wood-destroying organisms (WDO) inspection. This is the buyer's time to ensure the home has inspected results to their utmost satisfaction.

7. CLOSE

The final stage of the home buying process is the lender's confirmation of the home's worth (appraisal) and legal statue (title search), and your continued credit-worthiness. Throughout this process your agent will keep track and provide ample updates as items progress.

Your pre-closing responsibilities include:

Stay in control of your finances
Return all phone calls and paperwork promptly
Communicate with your agent at least once a week
Several days before closing, confirm with your agent that all your documentation is in place and in order
Obtain certified funds for closing
Conduct a final walk-through

On closing day, with the guidance of a settlement agent and your agent, you'll sign documents that do the following:

Finalize your mortgage
Pay the seller
Pay your closing costs
Transfer the title from the seller to you
Make arrangements to legally record the transaction as a public record

8. PROTECT YOUR INVESTMENT

Maintain the trust and relationship you have built with your agent. Even after you close on your house, your agent can still help you find contractors to help with home maintenance or remodeling, help your friends and family find homes and keep track of your home's current market value.

Maintaining your home is essential to protecting the long-term value of your investment. Home maintenance falls into two categories:

Keeping it clean - Perform routine maintenance on your home's systems, depending on their age and style.
Keeping an eye on it - Watch for signs of leaks, damage, and wear. Fix small problems early to save money later.