I want to buy a home! How do I make that happen?
Steps to buying a home for the first time:
- Search online to educate yourself about realistic homes and what they cost in the area you are looking in. If needed, research areas or ask!
- Contact a lender to see what you realistically can afford and if there any credit issues you may need to work through.
Note: Credit issues are a very common occurrence. Many times people have marks against their credit score that can simply be corrected by asking the biller or issuer to remove them. Cases of mistaken identity are another common problem. Just ask my friend, Josh! There are two Josh Garrett in the world? Who knew! He had marks on his credit that were actually someone else’s with the same name. This is a perfect example of things that can be corrected on your credit report. Having your credit checked is a must. I find it’s always a good idea to check your score yearly, whether you are looking to buy or not.
Sometimes people don’t have bad credit, they just don’t have ANY credit! There are many ways to establish credit. A lender can guide you step-by-step on ways to build your score.
Remember, credit issues are very common and nothing to be ashamed of. Correcting these issues does take time and patience, though. Better to be aware and start early!
Next home buying steps:
- Contact me to set up an automatic search of new listings, updated daily.
- Set up a few home showings- Time to meet and look at some houses for sale. This will give us a better idea of what we are looking for.
- Find the home. (This in itself is a detailed portion, but for the purpose of this list, we will keep it simple.)
- Submit an offer – Requires earnest money down within 2 days of an agreed offer; negotiations may take a few days, depending on offer
Once an offer is accepted:
- Financing contingency- Start the process for the loan. He/She will guide you through what is required to obtain the loan. This step will already be in process, as you do not want to start searching for a home without having a pre-approval with a lender, but this is the first step in the buying portion where your pre-approval will be presented and the loan will actually begin. Note: Some agents prefer to see the pre-approval attached to any offers made, so having this on hand is needed.
- Inspection contingency- We have usually 10 days from the binding agreement, unless noted differently, to hire a home inspector to come review the property. You will meet the inspector at the property to discuss his/her concerns and things noted about the property. (You will be required to pay the inspector on the day the service is done. This can cost anywhere from $200-500 dollars typically, depending on the size of the home and the inspector’s pricing.)After inspection is complete, the home inspector will send a detailed report via email. We will review the list and decide on a list of repairs we wish to ask the seller to complete.
Note: If the home is bank owned, an estate sale or a distressed property, it may be an AS-IS sale. If this is the case, we will agree to either accept the home in it’s current condition, or withdraw our offer and request our earnest money back. In some cases, going back to re-negotiate price can happen.
Once the repairs are agreed upon, we wait till the repairs are complete to go and review.
- Termite inspection- You do not have to be present for this. A professional will come out and make sure the home does not have any active termites. If there is evidence of active termites, the seller is usually responsible for this treatment, after all, they own the termites! In some cases though, special arrangements are made. Termites are very common in Middle TN and most homes have had termites and previously been treated or eventually will get them. If properly treated, termites are not that big of a deal. Left untreated, termites can cause costly damage.
After the inspection phase:
- Your lender will order the appraisal-once the buyer and seller have agreed on everything, it’s time to order the appraisal. The lender will take care of this. In some cases a fee is requested up front to pay for the appraisal. The home has to appraise for the amount on the loan on the property. If you are paying cash, an appraisal is not required, but recommended.
- Process paperwork and loan- This will be a lot of information coming from the lender. They will ask for receipts, copies of bank statements, tax returns, and likely anything financial may be requested. It can get annoying, but keep in mind, the bank is loaning you a large amount of money. They need to make sure all the proper paperwork is complete.
- Seek out a person to handle your homeowners insurance- You may go with the company that also does your car insurance. Ask a friend or call around. You will need to find a company you feel comfortable with. (also see vendor list)
- Set a closing date- this is usually about 30-45 days from when the offer was written and agreed upon. The lender will let us know when to schedule this. I will make all necessary arrangements. Closings usually take place at a title company, previously agreed upon.
Prior to closing:
- Call the local utilities on the home (power, water, gas) and request that the current utilities be moved into your name, on the day of closing, not before. This may save you a set up fee. Sometimes this is not applicable on distressed properties.
- Start packing!
- Final walk thru- This is usually done a day or two before closing. This is a final time to double check repairs were properly complete.
- Closing- Make sure you bring a photo ID and a steady hand!
Note: Once you know the amount you are bringing to closing, this will need to be made out to the title company closing your side of the closing, via cashier’s check or wire. The lender and I will give you all this information when needed.
MOVE IN AND CELEBRATE!