Step 1. Get Finances in Order

One of the most important aspects of buying a house is your financial record. Your credit reports are the witness to your financial management and before you even think about purchasing a home, you should get copies of your credit report. In order to apply for a mortgage you must have the appropriate credit rating in order to show you are worth lending to. There are different types of interest rates available depending on your credit score. For more on credit reports and how to access your personal reports, check out http://www.myfico.com or get a free credit report at http://www.freecreditreport.com. It’s also a good idea to check out your report before applying for a loan to check for errors, which are all too common. Knowing what your credit report says beforehand will go a long way in preparing you to buy a house.

Step 2. Get Familiar with the Mortgage Industry

Understand your financing options.  If you need help in this area, contact me and I’d be happy to put you in touch with a few local Loan Officers/Mortgage Brokers who can help you.  It’s always a good idea to get at least two competing mortgage offers so that you can make the most informed decision. Finding the right loan from the right lender will make your home buying endeavor a success. 

Step 3. Get Pre-Qualified for a Mortgage

Work with your selected Loan Officer/Mortgage Broker to get pre-qualified. This will allow you to really see how much you can afford in monthly installments and will also help determine the type of property you can afford. Getting pre-qualified is important when it comes time to making an offer on a home. A seller is much more likely to approve an offer from someone who is pre-qualified, than someone who is not. It gives you, as the buyer, some control over your home buying experience and also provides some financial muscle to sellers to show you are serious about the offer.

Step 4. Determine Wants and Needs

There’s no doubt that buying a home is an intimidating process, but it isn’t as hard as it seems, especially with June Mellor of Century 21 All Island’s guidance. As you are looking at available properties, determine what it is you actually must have and that you need—a certain number of bedrooms, proximity to work or school or at least 2 bathrooms. Then you can list your wants, or the things that you’d find in your dream house. The perfect home rarely exists, and most home buyers subscribe to the 80/10/10 rule. This means that the home is 80 percent perfect to you, but has 10 percent that you can change and 10 percent that you can live with. This formula generally adds up to 100 percent satisfaction.

Step 5. Find a Good Real Estate Agent or Realtor

It’s invaluable to have an experienced guide to help you navigate the murky waters of real estate. Using a Realtor is the best way to gain instant experience and professional advice every step of the way, from locating property to closing on your dream house. Don’t be fooled by claims that you can do it all yourself and save money. Typically, the seller pays realtor fees, so if you don’t use your real estate agent to their maximum capability, it would be like paying for a service and never using it.

Step 6. Search for a Home

Now for the fun part—searching the available properties on the market. The Internet is an amazing tool that saves time and energy. By working with June Mellor, you will be set up with your own personal Househunting website portal where you will receive up-to-date information on properties that match your needs.  Most of the time, you can even experience a virtual tour to determine if it’s the kind of place you want to see in person. Also, there are several home sales magazines available for no cost at grocery stores, and the newspaper also has classified ads for home sales. June can help you with the purchase of any home listed within these magazines.

Keep in mind that almost every home will have some cosmetic work in store for you. Don’t be turned off by something that isn’t move-in perfect—instead, decide what can be improved, thereby adding value to the home. Kitchen and bathroom remodels, for example, often add a large amount to the overall value of a property. We can even put you in touch with trustworthy and experienced contractors so you can get accurate information on what it would take to improve a property that’s nearly perfect already.

Step 7. Pre-Offer Considerations

Structure, features, amenities and more—it’s all come together in that one house that you adore. But before you submit an offer, take some time to examine every single aspect of the house you are considering. Think about the possible resale value, the age of key appliances such as water heater and air/heat unit, and evaluate the electrical system.

Step 8. Make an Offer

You’ve found the home, checked it out thoroughly and still love it. Now, its time to make an offer. That’s when you detail how much you are willing to pay for the property, the schedule for closing and when you want to occupy the property. Based on a professional inspection, your offer spells out that you are willing to proceed as outlined. If the inspection results in some previously unknown information, an offer can be resubmitted. The offer should be tailored to your needs and the specific property in question.

Step 9. Earnest Money

Generally when an offer is made, earnest money is included. This is essentially a good faith deposit that reveals to the seller that you are serious enough to submit some money for the deal. Generally in this state, it’s customary to provide $1000 in earnest money, depending on the total property price. However, there is no limit on the amount that can be offered.

So who gets the earnest money once it’s offered? The check is put into an escrow account upon acceptance of the offer.  If the offer is denied or otherwise falls through, it is returned to the buyer. If negotiations are stalled for any reason, and both the buyer and seller agree that there can be no further negotiations, the check is returned to the buyer.

Remember to give the earnest money check to the Realtor, never to the seller. Only attorneys or Realtors should handle earnest money, for your protection.

Step 10. Negotiation and Counter Offers

Once the seller receives an initial offer, one of three things will happen. The seller will reject the offer outright, the seller will accept the offer, or the seller will submit a counter offer. This offer/counter offer could go several rounds before all the parties are satisfied, and there are specific timeframes that each side must adhere to. However, usually this process doesn’t take very long and agents are adept at getting to the point of each offer and counter offer.

Step 11. Home Inspections and Other Contigencies

Contingencies are in place to protect you all parties within the transaction – Buyer and Seller.  One such contingency is the home inspection. Home inspections are usually conducted within the first 10-14 days of acceptance.  Hopefully, the inspection will reveal that the home is fine, but there can be some surprises as a result of a full inspection. Any issues that are discovered must be addressed by the seller and they must either pay for repairs or have the cost of the repairs taken out of the contract proceeds at closing. Repairs must be made and re-inspected.

Other contingencies throughout the process include buyer approval of the following:
* Preliminary title report
* Seller’s Real Property Disclosure Statement
* Survey/staking (if applicable)
* Homeowner’s Association & Condominium Documents (if applicable)
* CCR’s (if applicable)
* Termite inspection report
* Final walk thru

Step 13. Home Appraisal

As part of the loan approval process, the lender will arrange for an appraisal. Depending on what the appraiser decides, the loan may or may not be approved. It isn’t very common for the appraiser to determine that the home is worth more than the lender is willing to lend, and real estate agents are very much on top of which homes are overpriced and which ones are prime candidates for loan approval. Know that lenders usually have a maximum price per square foot that they will lend, and an overpriced property will be obvious in a hurry. In that case, you may want to renegotiate with the seller, as the seller is unlikely to be able to sell the home at that price to anyone.

Step 14. Closing on the Property

This is the point in the transaction where a I can really help reduce stress and panic. All parties involved in the real estate transaction are working hard to bring it to a close, but invariably there are issues that pop up that must be dealt with. It’s important to stay on top of things at this stage so that any issue can be immediately dealt with to keep things on course. At this point, it’s important for the buyer to know of several things you should not do during the closing phase. Among these no-no’s are:

·         Don’t change jobs unless absolutely necessary

·         Don’t make any other major purchases, such as a car or boat

·         Don’t panic if an appraisal is lower than you expected

This is the time to rely me, your Realtor because I've been through these scenarios and more and my expertise and experience will help guide you through all the little bumps that are to be expected. Use me as your teacher, guide and coach, and the dreaded closing phase of home ownership will be a piece of cake.

Step 15. Settlement and Possession

You’re nearly there, and possession is closer than you think. When settlement, also called closing, is complete, it’s time to transfer the property to you At this point, anything unusual can still happen, including glitches, issues and roadblocks. Among the many things that might happen are:

·         Closing costs are higher than anticipated due to extra service fees

·         Errors or mistakes in your credit report are discovered

·         The seller hasn’t completed agreed-upon repairs in time

·         Appraisal has to be rescheduled

No matter what issue arises, I will be able to help you decide how to best proceed and how to handle these last-minute issues. Experience really becomes important in these instances. After all the issues are resolved and the papers are signed—you’ve are now a homeowner. Congratulations! The home is yours!