Define your needs for your new home

Do you need a larger house?  Have you just married or had a baby?  Do you want to start building equity?  Are you relocating to another city, state or country?

When do you need to make a move?  Is your lease expiring?  Are you starting a new job? 

Visualize your dream home.  Make lists separating your "must have" and your "it would be nice to have" features.  Set your priorities so that you have a clearer picture of what you want, when it is time to see what is available.

Investigate the availability of financing

There are two ways to find what you can afford -- being pre-qualified for a loan and being pre-approved for a loan.  Both require that you work with a mortgage broker or lender. 

Pre-qualifying is the simpler of the two processes and can usually be done online or over the telephone.  You will need to provide information on how much money you make, bills that are currently owed, etc.  With this information, the mortgage broker can give you a rough estimate of the amount of money you will be able to borrow.

Pre-approval is a more involved process.  The mortgage broker will conduct a thorough check of your financial history including not only your source of income and debts owed, but also your credit rating.  Your credit history, your income, your outstanding debts and the amount of money you have on hand to make a down payment on a house will determine the amount of money that you will be able to borrow.

Most sellers prefer working with buyers who are pre-approved.  Being pre-approved lets the seller know that you are serious about purchasing a home and that there should be no unexpected obstacles in securing the money you need to buy a home.

Where do you want to live

You know what type of house you want and you know how much you can pay for your home.  Now you need to decide where you want to live.  In choosing the neighborhood that is right for you consider the following:  location (convenience to work, shopping, family, etc.), area schools, community amenities (swimming pools, tennis courts, parks, etc.), and the demographics of the surrounding area.

Finding your home

Once you have concluded the steps listed above, you are ready to look for your home.  If you are moving into a new city, you need to narrow your search area by looking for communities that meet your criteria and then refining your search to include homes in those areas.

Working with a Realtor® is probably the most efficient way to locate homes in the areas where you would like to live.  Your real estate agent can provide you with up-to-date information on available properties meeting your must have, would like to have, housing budget and neighborhood criteria.  After reviewing available property with you, your agent can arrange a tour of the homes at your convenience.

Buyers can also find homes by reading local real estate magazines, checking the real estate sections of local newspapers, contacting neighborhood associations, visiting the Chamber of Commerce, surfing the internet and driving through the communities in which you are interested.  While driving around is a good way to see houses, it can be time consuming. 

Making an offer

You have found your home and it is time to make an offer to the seller.  Your Realtor® can help you determine the offer price through reviewing recent sales of area homes that are similar in size, quality, conveniences and amenities.  Additionally, your Realtor® can advise you on how to structure an offer that will have the best chance of being accepted.

Your offer is a written contract that must conform to local, state and national legal requirements.  The offer binds both the buyer and seller to the details of what needs to be done to complete (execute) the transaction.  It should protect the interests of both parties and ensure your financial position as the buyer.

The offer contract should include, but is not limited to, the following:

• Legal description of the property
• Offer price
• Down payment
• Financial terms
• List of fees and who will pay them
• Amount of deposit (earnest money)
• Inspection rights and possible repair allowances
• Appliances, furnishings and other items that will stay with the property
• Closing (settlement) date
• Contingencies

The legalities of the offer are very important.  If you have any concerns or questions, be sure to ask your Realtor® right away.

Negotiating the offer

Once the offer is made, you may need to negotiate with the seller in order to reach an agreement that is acceptable to everyone.  While almost everything is negotiable when you are buying a home, the following are common negotiable items;

• Price
• Financing
• Closing costs
• Repairs
• Appliances and fixtures
• Occupancy time frame

Counteroffers occur frequently.  During the negotiation process, remain in close contact with your Realtor® so that you can respond quickly to any changes presented by the seller.  Negotiation is a business process that involves both compromise and mutual respect.

Service provider coordination

Once your offer is accepted, your Realtor® can help you coordinate all the activities needed to accomplish the sale and also serve as your advocate when working with service providers.  Your Realtor® will make sure vendors have access to the property and will oversee the provision of needed services on your behalf.

Four services typically desired by buyers are:  a home inspection, title insurance, surveys and a home warranty.

An inspection by a professional can provide you with information regarding existing and/or potential problems.  The ASHI (American Society of Home Inspectors) website can help you find an ASHI member in your area: http://www.ashi.org.

Property insurance is usually required by mortgage lenders and may include both homeowners and flood insurance (depending on where the home is located in relationship to a flood plain).

Having the aforementioned services performed in a timely and professional manner is critical to finalizing the purchase of your home.  Make sure that selected service providers are reputable and reliable.  Once again, the experience and product knowledge of your Realtor® can be invaluable.

Before the closing

As the closing/settlement date nears, buyers will need to be in contact with their lender and the title company or attorney handling the closing to ensure all required paperwork is completed and delivered to right location by the right date and time.  Buyers will need to ask what form of payment will be acceptable for monies due at closing.  If a cashier's check is required, make sure the check is made payable to the appropriate party.

With computerization, many times it is not necessary for both the buyer and seller to be present at the time of closing; however, both parties should be represented by their Realtor®.

The closing

Closing is where the ownership of the home is legally transferred from the seller to the buyer.  Closing procedures are usually held in the offices of a title company or an attorney.  The closing officer coordinates the signing (execution) of the documents and the collection and disbursement of funds.

Prior to closing, the buyer and seller should receive an estimate of settlement (closing) costs and be prepared to bring necessary documentation and funds to the closing.

Agreements of who is paying (buyer or seller) for particular closing costs should be acknowledged in writing.

After the closing

Congratulations on the purchase of your new home!

Be sure to arrange for the initiation of services such as electricity, telephone, cable, water, sewer, and trash removal.  Also be aware of fees for homeowners' associations, landscaping, property taxes, etc. and budget accordingly.