Regardless of the market, buying a home is complicated. Buying a home is for many the most complex and important transaction they’ll ever do. It involves expert negotiations and familiarity with contracts and extensive paperwork. A good REALTOR® will have a thorough understanding of homebuying process and the current market. Key steps involved in the homebuying process include:
Checking your credit
Your credit score plays a huge part in your ability to secure a mortgage and improving your credit score can take months of healthy spending habits and paying down debt. Check your credit with your credit card company, online, or with a major credit bureau. Typically, if your score is below 700, you will likely pay more for your mortgage.
Figure out what you can afford
You need to sit down and decide how much you can afford to spend on a down payment, monthly payments, and expenses. A mortgage lending rule of thumb is that your total monthly home payment should be at or below 28% of your total monthly income before taxes. However, lenders still can provide you more or less depending on your overall financial history.
Hire a professional
Having an expert, local professional to manage the process is more important than ever before. The internet only does so much – REALTORS® help people traverse complicated, data-heavy and voluminous information, details and decisions. This includes providing a comprehensive report known as a comparative market analysis (CMA) to help you understand market trends and determine what price to offer. This information can be incredibly valuable when it comes to evaluating whether a home is a safe investment and worth the price you’ll pay for it in today’s market. In addition, there are often small problems with initial negotiations and paperwork that, if unnoticed, can put your entire transaction in jeopardy. Your REALTOR® will work with you closely to ensure nothing falls through the cracks.
Find your dream home
Through the Multiple Listing Service (MLS), REALTORS® have instant exposure and access to the largest, centralized database of residential real estate listings in your area to find the perfect home for you within your budget. The MLS system makes it possible for all kinds of brokerage services to compete on a level playing field because they all have access to the same information. This gives consumers a lot of different choices about which real estate professional they want to hire.
Choose a lender and mortgage type
In a typical year, most buyers take out a mortgage to finance their home purchase, most commonly 30-year, fixed-rate financing using a conforming loan. However, there are other options including an adjustable-rate mortgage (ARM), where your payments often start out lower, but could increase over time. When choosing your mortgage, you need to acknowledge and be aware of the risks you are taking on when making this decision.
Make an offer, home inspections, & closing
Once you’ve found the right home and financing option, the next step is to make an offer to purchase your new home. To ensure the home is safe and won’t incur large, unexpected expenses in the future, be sure to get a home inspection before closing on your new home. Once the inspection is complete and you’ve come to an agreement with the seller, you will then close on the deal and sign all of the necessary paperwork. It typically takes a couple of days for your loan to be funded.
For more information about how to buy or sell a home, be sure to work with a REALTOR®, a member of the National Association of REALTORS®. Snohomish County-Camano Association of REALTORS® is the voice for real estate in Snohomish County. If you have questions for The Expert about real estate email us at email@example.com, or by visiting www.sccar.org.