Check Your Credit Report
The first step simply enough is to know if now is the right time to buy a home. Many credit card companies offer free credit score reports, also Annualcreditreport.com and you can obtain one free credit report once a year with Equifax, Experian, and TransUnion.
A few things mortgage lenders are seeking:
- two years employment at your current job or in the same industry
- credit score 620 or above, some programs are available at 580 and up but require more cash down
- no bankruptcies within 3 years
- no collections over $2,500
- debt to income ratio (DTI)
Meet & Greet
After step one now it's time to talk with me discuss what type of home you're looking for. Many buyers think this is easy but it can be complicated, especially when there is more than one person involved in the search. Knowing your needs early keeps things going smooth.
I also go over my services, buyer agreement, agency disclosures and answer any questions or concerns you may have.
Read more about pre-approval on my website under Tips & Tools in the "Buyer" tab. Getting pre-approved with a mortgage lender is not only crucial to know what your budget is so we're not touring homes over the budget but also most sellers want to see a buyers pre-approval letter to know that financing shouldn't be an issue and make our offer more competitive against other buyers.
You may choose any lender you want or I have a few referrals under Tips & Tools under the "Finance" tab.
The fun part right? I will set you up on a list that will email you homes new on the market that fit the criteria you're searching for.
I also have more tech savvy buyers who search online, if you do I recommend either Redfin and Realtor.com as they seem the most updated. Many houses are vacant we can tour whenever but some need advance notice so be prepared to be flexible.
Placing an Offer
You found a house you love now time to put in an offer. I'll discuss market data and other advice to help you decide what you want to offer.
After you provide me with what price you want to offer I'll send you the offer to electronically sign and.... we wait. Best scenario the seller accepts our offer and we're off to the next step. Worse case they found another buyer and our home search continues.
In the middle is the counter offer, which we'll huddle to discuss the new terms. This is called a counter offer which cancels the original offer and a new offer is presented and it's now up to YOU to decide if you accept their new offer.
Now that the seller has accepted your offer it's time for home inspection. Read more about Home Inspection under Tips & Tools in the "Buyer" tab.
While you have the right to perform your own home inspection it is HIGHLY recommended you hire a LICENSED home inspector to inspect the home. His report will tell you the good, the bad and the ugly so you can decide if you pursue the home further or decide to move on from it. It's also suggested to do a side sewer inspection as well here in WA State but also not required.
Each inspection comes at a cost so be prepared to spend $300 and up for the home inspection and $200 and up for the side sewer inspection, which you pay and is NOT refunded. Expect 2-3 hours for the home inspection or I can attend for you.
Depending on how you are paying for your home you may also need a home appraisal. The appraiser will tour the home and report back to the lender his thoughts on the home.
The lender then decides if the home is worth the price both parties agreed to in the purchase agreement. If they agree then the transaction can continue, if the agreed price is over what he appraises then either seller must reduce his sell price to the appraisal value or both parties will need to negotiate how to handle pricing to reflect the new changed value.
Now... we wait.
Now that the home inspection and appraisal went well we now enter the waiting period where the escrow agent, title company and lenders do their behind the scenes work. This time may seem forever but is critical in the home buying process.
MAKE SURE YOU DO NOT TAKE OUT ANY NEW CREDIT, DEFAULT ON ANY DEBITS OR DO ANYTHING TO JEOPARDIZE YOUR HOME LOAN. During this time they will run credit again and if you've defaulted on payments or took out additional credit during this time your approved amount COULD be reduced and in some cases potentially affect your home loan altogether.
Congratulations! Now all the financial paperwork is completed you simply now need to go in to sign paperwork. Expect about an hour there and prepare to sign A LOT of documents! Afterwards, I hand you the keys to your new home!