Homestead Realty LLC Blog

7 Steps to Owning Your Dream Home

October 25th, 2018 3:59 PM by Judy Ness Broker/Owner


7 Steps to Owning Your Dream Home                                                             

by Judy Ness, Broker 

Homestead Realty LLC

 

Thinking about buying a new home – or purchasing your first home?  As interest rates have crept up slightly over the last several months, many prospective buyers are feeling a sense of urgency to make a move. However, before you “jump into the deep end of the pool”, a little bit of preparation will go a long way in making your home buying process as stress-free as possible.  Here are a few tips to get you started:

 

  1. Select a Real Estate Professional to guide you through the process. In the age of the internet, there is a tremendous amount of information available online – and buyers and sellers sometimes make the mistake of thinking they can navigate the process without the assistance of a real estate professional. And although it is true that some do buy or sell successfully without using an agent, are you sure you want to make what is typically the most expensive purchase of your life without the assistance of a professional? As the old adage goes, “It’s what you don’t know you don’t know that will get you!” Think of your real estate agent as a guide on your trek up the mountainside. Your goal is to reach the summit and purchase your dream home – and the job of the agent is to be sure you get there safely.

     

    A competent real estate professional, who has good knowledge of the local market, can help make sense of all of that information on the internet – and guide you through the process of submitting an offer, negotiation, financing, home inspections, appraisals, and more!

     

  2. Get Prequalified! Unless you are fortunate enough to have all the cash you need to purchase your home, financing will be a large piece of the puzzle. Getting prequalified BEFORE you start looking at homes (or very early in the process) will put you in the position to move quickly when you find your “dream home.” Your real estate agent can give you information about various types of loans, and put you in touch with a competent loan officer. How much down payment will you need? How much money will you need for closing costs? Can any of the closing costs be paid for by the seller? Does the house have to meet certain criteria for a particular type of loan? All of these questions can be answered by your real estate agent, in cooperation with the loan officer.

     

    Once you get prequalified, it is important that you STAY prequalified.  Too often would-be homebuyers have destroyed their chances of getting financing by making costly mistakes. DON’T: quit your job, open new credit or charge accounts, miss payment obligations, make a large purchase,  accept a gift of money from anyone who is not a blood relative and willing to sign a gift letter, etc.  Basically, don’t do anything that changes your financial picture during the financing process.

     

    Another advantage of prequalifying is that if you have some bumps in your credit history, a competent loan officer can advise you as to what you can do (legally) to get your credit in shape.  Be wary of companies that provide “credit repair” for a fee.  And unless stripes are your favorite wardrobe pattern, do NOT lie on your mortgage application.  Mortgage fraud is serious!

     

  3. Distinguish between “Wants” and “Needs” - and try to keep an open mind! Once you are prequalified for financing, and know what you can afford, the fun begins! But your home search process will be much more efficient if you can clearly identify what is a “must have” on your wish list, and which items are “nice to have, but not essential.” Number of bedrooms, bathrooms, garage size and school district MAY be non-negotiable. Other items like an open concept, granite countertops, and fireplace may fall into the second category. Keep in mind that NO house is likely to have all the features on your “wish list”. Try to look for homes that are structurally sound, have the floor plan you need, and are in your desired location – but may have some potential for improvements without breaking the bank.

     

    I always encourage buyers to not only  look at what the lender says they can afford,  but to also carefully look at their budget and determine  the amount of monthly house payment they can live with.  It is no fun to be “house poor”; feeling like you can’t have a family vacation or evening out because you are strapped by your mortgage payment.  It is also important to plan for unexpected repairs or emergencies when you own a home, and have a contingency fund.  You don’t want a roofing repair or new water heater to throw you into foreclosure.

     

  4. Negotiate! Once you have found a suitable home, it is time to make an offer. Here is where a seasoned real estate professional will be invaluable! They can advise you on the specifics of the market and how you need to structure the offer to meet your needs, and still have a successful outcome. Is it a seller’s market – and are there multiple offers on the table? You may need to move quickly and come in with a strong offer to be the one that is accepted. Has the market softened some? You may be able to negotiate a more favorable price or terms.

     

    Keep in mind that the transaction is most likely to go smoothly if BOTH parties feel like they have “won” – at least on some points important to them.  Decide what is most important to you - price, terms, or closing date – and negotiate accordingly.

     

  5. Don’t Skip the Inspection. Congratulations – your offer was accepted! Most buyers at this point think they have “bought” their home – but in reality, you are only about half way through the process! A home inspection is the next step in being sure this property is your “dream home” and not a “nightmare.”

     

    Sometimes buyers who are short on funds are tempted to skip the home inspection, but I strongly discourage that decision.  The purpose of a home inspection is to be sure that there are no major (read expensive) defects or repairs that are unforeseen.  Although home inspectors cannot predict the future (and can’t see through walls to discover hidden defects), a good home inspector will help you identify what is a serious problem, and what is a maintenance issue.  I always encourage homebuyers to attend the home inspection whenever possible, so that they can become educated about the home, and ask questions.

     

    Once the home inspection is complete, you may need to go back to the table to negotiate repairs – or cancel the transaction altogether.  Your agent will be instrumental in advising you through the process.

     

  6. Stay in touch – with your loan officer, and your agent! The lender will likely ask for additional documents, sometimes multiple times. Although this can be frustrating, it is important that you provide the information requested in a timely manner. And your agent can help guide you through the “next steps” – appraisal, title work, securing insurance, transferring utilities, final walk-through and closing.

     

  7. Moving Day – Celebrate! Once the closing has successfully occurred, and you have the keys to your new home, congratulate yourself and take a moment to celebrate! Hopefully if you have prepared well, the process has been seamless – and you will enjoy living in your new home for many years to come!

 

The agents at Homestead Realty LLC are seasoned professionals, and know the southern Minnesota market well!  We would be honored to help you – give us a call today!

Posted by Judy Ness Broker/Owner on October 25th, 2018 3:59 PM

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