Your Guide To Homeownership

Your Guide To Homeownership

Step 1 – Making the Decision

1. Examine your lifestyle.  Is it time to settle down and own a home or will you be moving for your job or family?  Are you financially able to purchase a home?
2. Rent Vs. Buy.  Run the numbers to determine if it is financially a good move for you.  Factor in the benefits of homeownership.  Do a Pros and Cons to homeownership analysis.  If the advantages to homeownership are in your favor continue on.
3. Determine your affordability.  Meet with a reputable mortgage lender and determine how much mortgage you are qualified for in the purchase of a home.  Look at all your reoccurring expenses and monthly payments and include the new expenses associated with your new home.
4. Review your current finances.  How much money have you saved to apply toward a down payment?  Check your credit report and make improvements to better your score.  Create a budget to begin saving for you new home and the additional expenses.  Call your accountant or tax preparer and discuss the advantages of home ownership and how to financially achieve your goal.
5. The Decision.  If everything points to buying instead of renting proceed to the next step, Finding The Right Home.

Step 2 – Finding The Right Home

1. Must Have and Wants List.  Create a list of those things you would like to have in a home and those things you must have in the new home.  Take into consideration you and your families growth over the years and will what you are looking for in a home be adequate to meet your future needs.  Will the home meet your needs with your current employer, your proximity to work and possible relocations?  What lifestyle features will you require in the new home?  These questions need to be thought out before you begin your search.
2. Starting Your Search.  Find some good websites and begin searching homes in the areas you wish to live and check out the current market to get an idea of the styles of homes that meet your search criteria and how much they are selling for in today’s market.  Drive through neighborhoods and get a feel for the area and look for the homes that are for sale.  See if one real estate agent has dominance in the communities, they may be a good source of information.
3. Find a REALTOR^®.   Speak with several and choose on that you trust and feel confident with and then stick with them.  Let them do some of the searching and have them educate you on the current market and mortgage rates.
4. Previewing homes.  As you begin your tour of the available homes keep in mind that the perfect home does not exist, but the right home does.  Keep a scorecard on the homes you are previewing noting the pros and cons.  The process can get confusing, especially if there is a large inventory of homes to see.

Step 3 – Securing a Mortgage

1. Be Pre-approved.  As you are looking for homes it is best to have yourself pre-approved for a mortgage loan.  This will save you time and ultimately money by putting you in a better negotiating position with a potential seller.
2. Look for First Time Homebuyer programs.  Speak with your agent and the loan officer to determine if there are any special programs to help defer some the closing costs or down payments.
3. Check the rates and different types of loans.  Compare the different types of loans.  Determine what type of loan best suits your needs. 
4. Begin choosing the Title/Escrow company.  Get some guidance on who should perform your closing and their costs.

Step 4 – Making the Offer

1. Understand the process.  Have an understanding of the steps in buying a home.  Get familiar with the Contract of Sale before making the offer.  If you have a Buyers’ Agent they will assist you here.
2. Determine your Offer Price and Terms. 
   1. Discuss a negotiation strategy with your real estate agent for price, good faith deposit and anticipated closing date.
   2. Determine what you believe the home to be worth to you after reviewing comparable homes, market conditions, average days on market, etc. and establish a walk away price.
   3. Create a list of the items you wish to be included in the purchase.
   4. Review all property disclosures and request additional information if you have any questions.
   5. Go over any contingencies, such as financing, home to sell, etc.
   6. Discuss seller concessions if needed to close and assist in the purchase.
   7. Review Home Owner Association documents , if applicable.

Step 5 – Finalizing the Agreement

1. Contract and Addenda.  Get all paperwork signed and initialed in the appropriate places and maintain a copy for you files.
2. Closing.  Establish a closing and possession date.
3. Contact a Title company/Escrow company.   In parts of the country an attorney should be contacted to perform your closing.
4. Funds for Closing.  Begin gathering the necessary funds to close.  Usually a final amount needed to close will not be determined until a few days before closing.  Check with your real estate agent.
5. Financing.  Lock in your mortgage rate if market conditions dictate.
6. Inspections.  Make sure you have all your required inspections performed in a timely manner as per your agreement.

Step 6 – Do Your Homework

1. Utilities.  Check timeframe for converting utilities to your name.
2. Insurance.  Make sure you have all the necessary insurances in place.
3. Home Warranties. You may want to check into getting a home warranty to give you some peace of mind in your new home purchase.
4. Your Move.  Contract for a moving company and begin packing for your move.

Step 7 – The Closing

1. Walk-through.  Perform a walk-through prior to closing to determine that the home is in substantially the same condition as it was at the time of contract.
2. HUD-1.  Review the HUD-1 Settlement sheet to see that all payoffs and funds are accurate.
3. The Documentation.  Review and sign all required mortgage papers and documents.

Step 8 – The Move

1. Possession.   It’s time to move into your new home.  Please see the It’s Your Move Checklist.  Enjoy your new home!

Compliments of:

Audrey & Frank Serio, CRS

Lucido Global Team of Keller Williams Realty

Bethany Beach DE

www.TheSerios.com