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What Are the Steps in Buying a Home?

Want to Start Looking for a New Home?

Here’s a few things that almost everyone should think about. In the column on the right you’ll most of your questions answered about value, mortgages and what’s going on in the market. If you want an MLS snapshot of the area, OK.

Photo by Kevin A Kent

Photo by Kevin A Kent

You’re Ready? What’s the First Step?

While attending open houses is much more exciting than filling out paperwork, the first step a homebuyer should take is getting pre-approved for a loan. That’s why I work only the best lenders in the business. This helps you determine how much house you can afford and set a firm budget. Sellers are also more inclined to take you seriously and consider your offer if they know the home is within your pre-approved limit. Often that pre-approval document is part of the Offer package.

How Does My Credit Score Impact My Home Loan?

When determining how much home you can afford and whether you are eligible for a home loan, a lender will look at your credit score. Typically, you need a score of 580 or higher to qualify, but it is recommended to have a 620 or higher. The higher your credit score, the better lending terms you may be eligible for. Simple advice is to NOT buy a car or make any large purchases on your credit cards before you get in the home.

How Many Homes Should I View?

There is no right or wrong number of homes you should view before making an offer. Sometimes we find your dream home on day one, other times we may spend weeks or months. The good news is now with the MLS daily searches and sites like Homes.com, Realtor.com, Trulia and Zillow, you can often find the range and the neighborhood, before we go in for the details and speaking with the listing agents. I’ll take you to see as many homes as we need to. I do find that the first day out, I’ll discover a lot about your priorities so we can focus in on just what you love.

How Do I Search for a Home?

Start by viewing MLS listings on a real estate database, such as Homes.com. Narrow down the results by searching for homes within your price range and with the desired number of bedrooms and bathrooms. Your real estate agent can also research homes and make recommendations based on your criteria.

How Safe is the Neighborhood?

No one wants to live in a dangerous city, but your real estate agent can’t help you with this question. Due to the Fair Housing Act, a real estate agent cannot answer questions regarding crime statistics. Before starting your house hunt, research crime data for the cities and neighborhoods you are considering.

How Much Do Real Estate Agents Charge?

Typically, you aren’t paying a real estate agent to help you find your dream home. A home seller pays their real estate agent a percentage of the home sale price, and that agent pays the buyer’s real estate agent for bringing in the buyer. A standard commission is 6 percent of the transaction, which is split between the seller’s agent and the buyer’s agent.

What Home Service Companies Are Available?

As Internet providers and home service companies vary by location, it is important to know what options are available and how to compare and save money on cable, satellite, or Internet services in your new area. Note, I provide a list of service providers and lenders on my site. CLICK HERE.

What Should My Down Payment Be?

While it depends on the type of loan, most mortgage lenders require at least a 3-percent down payment, and FHA loans require a minimum of 3.5-percent down. The percentage you are required to put down will depend on your credit history, the type of property, and several other factors. In 2014, the average down payment was 14 percent.

How Long Does the Home-Buying Process Take?

The process varies significantly and depends on the state in which you are buying and the type of property you are purchasing. Once the seller has accepted your offer, it takes an average of 36 days to close. FHA and VA loans can take a few additional days, and short sales are notoriously slow, taking an average of 90 to 120 days to close.

How Will My Home Purchase Affect My Taxes?

There are a number of tax benefits to buying a home, but filing your taxes can be a lengthy process if you aren’t used to itemizing. You can deduct your mortgage interest payments, as well as property taxes, points paid at closing, interest on home equity loans, lines of credit, and other items. A tax professional can help you decide what to itemize.

Buying a home for the first time can be overwhelming. I’m here to not only help you find the right deal for that home you love, but also to help you along the way with all of the documents with our Transaction Coordinator. I am not a tax advisor, but I can tell you that buying a home will be one of the better tax decisions you will ever make.

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