Buying a home is one of the most exciting and largest investments you will ever make in your life. OMG: Did I just sound like your mother? If I did, I apologize in advance, but it’s true. If you are looking for your first home, trading up or down, buying your first or 3rd investment property, you will need the help of a real estate professional like me who has been there, done that and then some.
Hi, my name is Audeliz Angie Perez and I am the real estate agent that runs njretoday.com. Because 60% of my real estate sales business comes from the buying side of real estate sales, I can confidently call myself an experienced and successful buyer’s agent. It’s my job and my life’s focus to aid you in what is often a stressful, exciting time for you. Buying a home is, after all, the American dream and I want you to know that I take your dream seriously.
Having said the above, I’ve put together a simple list of home buying steps that describes to you how to find your ideal home. The first two steps that I outline below is what I call the prep work; it’s what I as an agent recommend that you do before and after you ever visit your first open house or home for sale.
Buying a Home 6 Steps From Searching to Closing
Step 1: BEFORE You Start House Hunting Get Pre-APPROVED to Determine Your Affordability, and not Pre-qualified
Before you go online to Realtor.com, Zillow, Trulia or njretoday to search for a home search, before you go to an open house, before you make an offer on a home, sit down with a loan officer.
It’s too easy in today’s market to go online, fill out a web form and get pre-qualified for a mortgage based on what you believe to be your affordability.
Getting financing for a home is so much more complicated than in years past. There are many factors that can affect your affordability and ability to get a home loan like:
- Your Debt to Income (DTI)
- Your spending habits
- Length of credit history or insufficient credit history
- Errors on your credit report
- Recent late accounts on your credit report
- Number of trade lines on your credit report
- Overuse (abuse) of existing credit
- Availability of loan product(s) and current interest rates
- Real Estate Taxes Property Taxes
- Private Mortgage Insurance (PMI)
- Down-payment and other assets and accounting of said assets
- Other Expenses like flood and homeowner’s insurance
It is simply in your best interests to take the time to get your finances, income and expenses in order by gathering the all of the necessary documents to be able to prove your income and assets.
At NJRETODAY, we’ve made it super easy for you to pre-qualify for a home loan. Simply fill out a loan application form and one of our loan officers will contact you ASAP. This person will either provide you with a pre-qualification letter on the spot or a pre-approval, depending on if you give the loan officer permission to review your credit history. Getting pre-qualified or better yet pre-approved is an important first step in the home buying process.
Oftentimes, your credit score and availability of credit or lack there of, including your debt to income ratio, can make or break your ability to secure financing for a home. Upon speaking to one of our loan officers, another important aspect of buying a home is addressed such as closing costs, which are costs associated with buying a home, as in
- home owner’s insurance and title insurance,
- attorney’s fees,
- Deed recording fee
- HOA application fees, etc.
Visit this link for a complete list of sample closing costs associated with buying a home.
Step 2: Create Your Home Buyer’s Wish List
Know Thyself. Outline Your Wants and Needs and conduct a lifestyle search, including creating your own home buying wish list. OR, if its too hard to identify what you want and need, you may want to focus on what you don’t want like no wood paneling or houses on busy streets, etc.
Step 3: Arrange for a Buyer’s Consultation
Never underestimate the value of finding a real estate agent that is accessible to you; someone who understands your wants, needs, goals, buying time frame; or simply someone who has access to other important contacts, other people who might be involved in the sale like a home inspector, real estate attorney, title, insurance, and home protection. Your agent is like your quarter back. He or she manages the home buying process from start to close. This is your point person who manages the entire team and communicates with you daily if not weekly on the progress of your transaction.
Step 4: Search and Visit 12-18 Properties
Sign up for auto email alerts of new homes and listings. Utilize njretoday.com, angie.wesellnewjersey.com, forsalebyowner.com, fsbo.com, craigslist, and your local MLS websites to locate a home of your choice. Then, instruct your agent or REALTOR® to make the appointments on your behalf.
THEN – Make a competitive offer using a CMA and send a complete contract. Your REALTOR® will manage your offer negotiations with the seller.
When you finally find that near perfect house, it’s time to make an offer. In the real estate business, we have a saying, send your second offer first. Too often, inexperience home buyers will struggle with what to offer a seller. I know from experience that you’re likely to ask me how much should you offer on a house that you are dying to own. And my response to you is: it depends. What does it depend on?
- How long the house has been on the market?
- What is the seller’s motivation for selling?
- What type of sale is it? Is it a short sale, REO, estate sale, relocation?
- Are there other parties interested in the home at the same time?
- Are the sellers willing to negotiate?
- When do you or the seller want to close?
- Is the home being sold as it?
- Are you asking for the seller to pay closing costs in the form of a seller’s concession?
- What is price range of sold homes in the area in the past 3 months? 6 Months?
- Is the home dated or updated?
- Are there immediate repairs necessary to the home that would influence your offer?
- What’s included in the sale?
- Is it a buyer’s or seller’s market?
- Is flood insurance required?
- LOCATION, LOCATION, LOCATION
- Saleability and Upkeep
There are a lot of factors that can influence your overall initial offer price. And it’s important to discuss all of your questions with an experienced agent like me.
Step 5: Attorney Review, Inspections, and Appraisals
In NJ, we have a 3 day cooling off period, meaning that your contract is not legally binding for 3 business days. After your initial offer if accepted, you are entitled to have your purchase contract reviewed by an attorney who may reject or alter the contract that is generally prepared by me, your agent. Next, when you are fully satisfied with the language of the contract, you are entitled to several inspection(s). Generally after your inspections are completed, your lender will order an appraisal to assess the value of the home.
Step 6: Other Searches and Closing
After inspections and the appraisal, you will receive a mortgage commitment from your lender. Once a commitment is issued, your attorney will order additional searches called title, flood, and survey respectively. Eventually, you get to the point where you are ready to close.
At NJRETODAY and Weichert, Realtors, I pride myself on affiliating with some of the best real estate brokers or agents in the business. If I can not service your wants and needs, I am sure I can refer you to one of my trusted real estate contacts who will be able to show you properties in the areas you want to live in and represent you throughout the transaction. Tell me more about your home buying wish list!