First Time Homebuyers

“I can’t buy a house, I don’t even know where to start”. I hear it all the time! More times than not, though, that is simply not true. I know that buying a home can be a daunting task, but a good REALTOR should be there to guide you through every step of the way. That’s why I’m here. I hate seeing people stuck in the rut of renting and working to build others’ wealth while falling further and further behind. Let’s talk about the steps to buying a home.

1. Find a good Real Estate Agent. Don’t just stop at the first one you meet. Interview different agents, get to know them, and then make a decision as to who you’re going to use. The home buying process should be fun and memorable, the right agent should not only be competent in real estate practices, but should also bring a personal touch to the process. I recommend looking at local agents through REALTOR.com or Zillow, or just walking into a reputable real estate office in your area to see an agent. It is a good idea to find an agent who is a member of the National Association of REALTORS. This designation means that the agent is bound by a strict code of ethics and is dedicated to giving you the best professional service possible.
2. How are you paying? Most Real Estate Agents will ask you this question right off the bat. Don’t be offended, it doesn’t mean they don’t think you’re able to buy a home. The type of funding you will be using will not only help your agent to determine your budget, but also what types of homes you can finance with the funds that you have secured.
3. The Pre-Approval process can often be the most daunting throughout your journey. Your current bank will be a good place to start, but national mortgage companies can offer a wide range of programs that will fit just about any situation. Chances are, your agent will have a large rolodex of lenders that can help you in securing your dream home! If you get denied by the first lender, or do not like the interest rate, keep shopping. In many cases, there is a lender out there that can help you. Fun Fact: many people worry that reaching out to multiple lenders will be detrimental to their credit. That is not necessarily the case. While the first credit check may hurt your score, you have 45 days from the first check to continue to shop around without any further checks having any impact.
4. Finding your dream home. This is the fun part. Your agent, with your help, will search a wide array of resources to find homes that fit your needs. Once you’ve identified homes you like, it’s time to go to showings and open houses! Enjoy this process, take it all in! Don’t rush it, but if you fall in love with a home, act quickly! This market is hot, and there’s a good chance that many other buyers are looking at the same home! TIP: let your real estate agent schedule showings for you. If you’re reaching out to the listing agents without letting your agent know, it can cause mass confusion. Besides, this is what you’ve hired your agent for.
5. The Offer can often times be the scariest and most confusing part of the process. You are putting your commitment to purchase a home on a legally binding contract. Don’t sweat it, though. I’m going to break it down for you now.
   1. Your information. Your agent will need to know your full name, email address, phone number, and current address.
   2. Purchase Price and Closing Costs. This will depend largely on what amount you’re pre-approved for, what type of financing you have, and how much cash you have on hand. A good agent will have done their research and will have a pretty good idea of the market value of the home, as well as the amount of closing costs that you might be able to obtain from the seller. It’s a good idea to talk with your loan officer prior to signing a contract to ensure that your payments will be in your comfort range.
   3. Earnest Money and Due Diligence. Think of earnest money like a deposit that you’re putting down on the home. The amount varies by brokerage policies, the seller, buyer, and the market you’re in. As a general rule, you can expect to put down about 1% of the purchase price. This remains your money and is credited to you at closing. The exception to this is if you back out of the contract for any non-legal reason or a reason not agreed upon in the contract. During the due dilligence period (more on this in a second), you can back out of the contract for any reason or no reason at all without losing the earnest money. After that, it becomes a little harder. Due Diligence is the period of time that is agreed upon to allow the both parties time to not only be sure that they want to follow through with the transaction, but also to do any inspections (home inspection, wood destroying organisms inspection) that the buyer may want or may be required by the lender. As a general rule, it’s 10 days from when both parties have signed the contract, but it is negotiable between the parties.
6. Appraisal. If you’re buying a home using borrowed funds, lenders are going to require that the property that you are buying appraises for no less than what they are lending you. They do this to ensure their investment is worth what they’re giving you for it. If it appraises for less, your contract will protect you from having to purchase the property and will safeguard your earnest money if you do elect to back out due to a low appraisal. You also will have the option to make up the difference in cash. This option, however, is rarely exercised. The appraisal might also outline any repairs that the lender will require. Your agent should be able to negotiate some sort of amendment to satisfy these repair requirements.
7. Sit and Wait. It sometimes can take a while to get everything wrapped up with your loan, or for the attorney to prepare loan documents or title work. This period is pretty slow on the Buyer’s part, but make sure you’re staying on top of your emails and phone calls. The lender or attorney may require additional information or documentation from you. NOTE: no later than 3 days of closing, your lender will send both you and your agent a Closing Disclosure. This document outlines all of your costs, and will show your interest rate, APR, and closing costs. Make sure to review this with your agent and lender to ensure that it matches pretty closely with what you were originally quoted.
8. Final Walkthrough. It is best practice to walk through your new home prior to closing to ensure that everything is just as you expect it to be. It should be in the same condition it was in when you went under contract. Your agent should also be checking for things that the seller agreed to leave behind in the seller’s disclosure, if applicable. You should also verify that any required repairs have been done.
9. Closing day! The time is finally here, and soon your new home will be yours! Make sure to bring your driver’s license or ID card and social security card. Also make sure to bring a cashier’s check in the amount needed from the attorney, or ensure a wire transfer has been successfully executed.

Trust me, I know this is a lot. I know the home buying process can seem like climbing Mount Everest. The right agent will be with you every step of the way, and will make it as easy as possible for you! This is the biggest investment of your life, make sure you’re well-informed. I hope this has helped!

Austin Wayne Futch (Ga. License #422569)

229-425-7822

afutchc21@gmail.com

https://afutch.sites.c21.homes/

Century 21 Smith Branch & Pope

1814 US HWY 41 N Tifton, GA 31794

229-386-8737

229-386-9981

DISCLAIMER: This post should not serve as legal advice, nor does it establish an agency relationship. Austin Wayne Futch is a Licensed Real Estate Sales Person, license number 422569, with Century 21 Smith Branch & Pope located at 1814 US HWY 41 N Tifton, GA 31794 (office number: 229-386-8737).