11 Steps to Home Ownership
Buying a home is not only exciting, but also a bit nerve wracking. We’re here to help. We’ll walk you through your dream of owning your own home and take away the nervous jitters and replace them jitters of excitement!
Step 1: Check your credit and get your credit score.
Everyone is entitled to one free credit report a year. Use it to learn more about your credit BEFORE trying to buy a home. You want to ensure your credit is clean and there are no outstanding issues you may not even be aware of before deciding to buy a home. You will also learn what your credit score is and this is important to know as lenders use your score to determine the interest rate of your mortgage and to help you select the best financing option to buy your home.
Step 2: Find a REALTOR®.
A little bit about us.
- We are licensed REALTORS® and Jenny is an Associate Broker.
- We love our jobs. We never go to work because it’s not a job; it’s a passion.
- Not only will we walk you through this experience, we’ll have fun along the way.
- We believe in doing the right thing, no matter how difficult that may be.
- We believe in Karma. We only put out there what we want to get back.
- We believe in being nice. Being mean is just not nice.
- Jenny is very direct and Scott is the softer side of the business. She says what she means and means what she says, in a nice way of course.
- Jenny is a tough negotiator. Growing up overseas, she learned to negotiate for everything. She never paid full price for things growing up, as it was part of her day-to-day live growing up. Scott is an excellent negotiator as well, as everyone walks away feeling like they won. This is a required skill for your Realtor when buying a home, as seller’s take the selling process very personally and they are concerned about whom is buying their home. It’s all about a fair deal for both sides.
- We love helping others find their Dream Home!
Step 3: Get Pre-Approved.
It’s important to understand what you can afford before you start searching for your dream home. To help you find the perfect home that fits within your budget, know before you go.
“Pre-approval” means you have met with a loan officer, your credit files have been reviewed and the loan officer believes you can readily qualify for a given loan amount with one or more specific mortgage programs. Based on this information, the lender will provide a pre-approval letter, which shows your borrowing power. You can visit as many lenders as you like and get several pre-approvals, but keep in mind that each one carries with it a new credit check, which will show up on future credit reports.
Although not a final loan commitment, the pre approval letter can be shown to listing brokers when bidding on a home. It demonstrates your financial strength and shows that you have the ability to go through with a purchase. This information is important to owners since they do not want to accept an offer that is likely to fail because financing cannot be obtained.
See our Resources Page for a list of Lenders that can help.
Step 4: Start looking at Homes.
Houses are more than just bedrooms and bathrooms. In order to not overwhelm you with options, it’s important you have an idea of what’s on your wish list. What is a MUST-have and what is a NICE-to- have? Think about school districts, commutes, styles of architecture, building materials (brick vs. stucco), neighborhoods, amenities, county taxes (Fulton vs. Dekalb) and more.
Step 5: Choosing your Dream Home.
How do you know this is the one? You’ll know because for several reasons, we know it’s the right house for you being the most important of them. We have had many Buyers ask us if “we’re ever going to let them buy a house.” Our response is always, “Yes, when we find the right one for you.” We don’t want you to settle – we want you to LOVE your home. We’ll also make sure we see enough homes so you’ll know which one you want to be your home. Trust us, you’ll know when you’ve found your Dream Home!
Step 6: Get a Loan.
There are lots of options out there for financing your Dream Home, but in general, the mortgage you choose will likely be determined by at least several key factors:
- How much down? Loans with 5% down or less are available – in fact, loans from major lenders with no money down have appeared in recent years.
- If you place less than 20 percent down, lenders will want the mortgage guaranteed by an outside third party such as the Veterans Administration (VA), the Federal Housing Administration (FHA) or a private mortgage insurer (PMI, or private mortgage insurance, is required by lender to protect against any mortgage defaults). Millions of VA, FHA and PMI loans are generated each year.
- How’s your credit? The best rates and terms are only available to those with solid credit. To get the best loans, make a point of paying credit cards, installment payments, rent and mortgage bills in full and on time.
- Are you a first-time buyer? It might seem that “first-time buyer” means someone who has never owned property before, but under most state programs, the term refers to those who have not owned property within the past three years. State-backed first-timer programs often feature smaller down payments and below-market interest rates.
See our Financing Options page for options on how to buy your Dream Home.
Step 7: Make an Offer.
There are many components to an offer: price, special stipulations and closings costs to name a few. We’ll ensure attention to detail is taken when presenting your offer. We want to ensure you are paying a fair price for the home and asking for things that are on your MUST-have list.
In a typical offer situation, we will complete an offer that we will present to the owner and the owner’s agent. The owner, in turn, may accept the offer, reject it or make a counter-offer. Counter-offers are common (any change in an offer can be considered a “counter-offer”), so we’ll make sure we are in close contact so that any proposed changes can be quickly reviewed.
Step 8: Inspections.
Inspections are common when buying a home. They include checks for termites, surveys to determine boundaries, appraisals to determine value for lenders, title reviews and structural inspections. Inspections can take several hours so planning ahead is important. We’ll ensure you have the proper inspections performed and are given enough notice to plan ahead and be present when they are being performed.
Step 9: Get Insurance.
Just as you cannot purchase or drive a car without insurance, the same goes when purchasing your home. There are various forms of insurance associated with home ownership, including these major types:
a. Title insurance: Purchased with a one-time fee at closing, title insurance protects owners in the event that title to the property is found to be invalid. Coverage includes “lenders” policies, which protect buyers up to the mortgage value of the property, and “owners” coverage, which protects owners up to the purchase price. In other words, “owners” coverage protects both the mortgage amount and the value of the down payment.
b. Homeowners’ insurance: Homeowners’ insurance provides fire, theft and liability coverage. Lenders require homeowners’ policies.
c. Flood insurance: Generally required in high-risk flood-prone areas, this insurance is issued by the federal government.
d. Home warranties: Home warranties for existing homes are typically one-year service agreements purchased by sellers. In the event of a covered defect or breakdown, the warranty firm will step in and make the repair or cover its cost. With new homes, buyers want assurance that if something goes wrong after completion the builder will be there to make repairs. Home warranties bought from third parties by home builders are generally designed to provide several forms of protection: workmanship for the first year, mechanical problems such as plumbing and wiring for the first two years, and structural defects for up to 10 years.
Step 10: Closing or Settlement.
One of the best parts of settlement is that you need to do very little.
Just prior to closing, you’ll also want to determine the status of the utilities required by the home, items such as water, sewage, gas, electric and trash services. You want utility bills to be paid in full by owners as of closing and you also want services transferred to your name for billing. Usually such transfers can be done without turning off utilities. We can provide contact numbers and related information.
Also before closing, you will typically have a final opportunity to walk through the property to assure that its condition has not materially changed since the sale agreement was signed and binding by you and the Seller.
Settlement is a brief process, typically held in a closing attorney’s office, where all of the necessary paperwork needed to complete the transaction is signed. All papers have been prepared by closing agents, title companies, lenders and lawyers. This paperwork reflects the sale agreement and allows all parties to the transaction to verify their interests. For instance, you get the title to the property, lenders have their loans recorded in the public records and state governments collect their transfer taxes.
Whatever the case, the result is that title to the property is transferred from seller to buyer. You’ll receive the keys and the seller receives payment for the home. Deeds, loan papers, and other documents are prepared, signed and filed with local property record offices.
Step 11: What’s Next?
Congratulations. You officially own your Dream Home and we were happy to help. But, you’re not quite finished. Whether you’re a first-time buyer or a repeat buyer, there are several more steps you’ll want to take.
The papers you received at settlement are extremely valuable, so hold on to them! In the short-term they can help establish tax deductions for the year in which the property was purchased. In the future, such papers will be important for tax purposes when the property is sold, and in some cases, for calculating estate taxes. About one-two months after closing, you will receive your recorded deed in the mail – there is no need to pay for this service, as it’s part of the closing attorney’s fees. Such records are public notices that show your interest in the property. Many owners also make a photo or video record of the home and their possessions for insurance purposes and keep the records in a safety deposit box. Your insurance provider can recommend what to photograph and how to secure it.