There are many market predictions, however if you want to buy your first home—there is no wrong time. The motivation to buy is not determined by regional market conditions or by location. Industry opinions and investor speculation can not predict when a particular individual will be ready to buy. For the great majority of folks, the most compelling reasons to buy a home are based on individual circumstances and personal needs.
• Family needs and desires for children/parents/in-laws/couples • Convenience to home, work, school, social activities • Sense of achievement or fulfillment • Freedom and independence
Even though there are many changes in the market, both up and down—people still need and want to buy homes. This desire to buy a home is deeply rooted in the fabric of our consciousness. The value of homeownership gives far more satisfaction than ROI calculators can quantify. Today, there are many different loan programs with flexible terms to fit all buyers. There is city and county down-payment assistance programs to assist in buying a home. For future buyers with blemished credit, there is debt reduction and counseling programs to help gain a fresh start.
How do you make the leap to become a homeowner? First, determine that you want to buy a home. Get your finances in order. Determine your financial situation and check your credit to determine where you fall as a borrower. Look at all of your available assets for your down payment and examine all of the finance options available to you. If you have some credit blemishes, take the time to make timely payments to your creditors to present the best financial picture. Make sure that you have a track record of stability in your employment history. Postpone any major purchases. Your actual home purchase may still be 12-18 months down the road, but you can still prepare for it now.
Get pre-approved for your mortgage. Once you’ve cleared the financial hurdles, talk to your lender or broker to find out how much you can afford to borrow along with the expected out-of-pocket costs you will need to incur for the closing. This will include the required down payment along with funds for closing costs. If you are buying in a seller’s market, you may want to search for homes below your approved price range, so that you can have the most room for negotiation.
Find a credible licensed real estate agent. Look for an agent that can work with you based on YOUR needs and your schedule. Check references of previous clients. You may not know exactly what you want in terms of a new home, and your agent should work with you to determine your needs and help you find a property that meets your immediate and future needs. Check with family and friends for successful agent referrals. Ask them how satisfied they were with his/her services and if they would use them again.
Become an informed and practical buyer. Once you determine where you would like to live, determine what factors are most important for your family. Calculate your new commute time and research school information for your children. Make sure to evaluate the surrounding factors that are most important to you, along with factors that are least important.
Find a home that works for you. Envision yourself (along with your family living in the home). What are the key points of consideration for your home? If you spend a lot of time in the kitchen, then you want to make sure that the kitchen can accommodate your habits. If you will be working from home, make sure that your home office setup will work. Make sure that all of your telecommunications and electrical needs can be met.
Make the offer. Once you have located a property that meets your needs, make an offer based on the listing price, along with comparable information and market considerations. Your agent can work with you to determine the best price, along with any contingencies for the sale.
It is good to get a home inspection, so that you can know what the potential pitfalls and future maintenance needs may be. In a seller’s market, you may find yourself bidding with several other buyers for a single piece of property. Work with your agent to determine what is customary in your area. This is when negotiation skills really come in handy!
Once your offer has been accepted, you will enter an escrow period, where all of the title research will be handled, funding requirements met; tax and title transfer paperwork managed. Prior to the close of escrow, you will sign all of your finance paperwork, and pay your remaining deposit and closing fees. After funding is complete, the title company will record the new purchase deed with the County Recorder’s office, and you will officially “close”.
Congratulations! It’s time to move. Make sure to connect your new utilities along with mail forwarding. The purchase of a home can be a lifelong achievement, but one that is truly a worthy accomplishment.