Welcome to Home Buying Central
Thank you for visiting HomeBuyingCentral.com. We hope to become a valuable resource to you when planning to buy a home. Real Estate transactions can be very daunting for people without experience but the information on this site will assist you throughout the transaction!
Buying a house is one of the most important decisions you will make in your lifetime. If you have ever found yourself overwhelmed or just asking yourself, “How do you buy a house?” then you have found the ultimate resource on the home buying process. The home buying process can be broken down into five different steps:
1- Getting Pre-Approved financing
2- Finding a professional Realtor
3- Beginning the home search
4- Negotiating a Contract
5- Closing on your new property
Step one might not apply to you. Some home buyers have the ability to pay cash for their purchase. If paying cash is an option it is normally a wise decision. There is no point in paying interest if you don’t need to! The majority of people will need to obtain third party financing. This is a critical first step to buying a home. Many Realtors will not even show you houses until you have a pre-approval letter from a lender. It is a waste of everybody’s time without one. You will end up finding your dream home only to end up waiting 3 weeks for the bank to get your pre-approval together and in this time somebody else has their paperwork together and puts in an offer on the home. When searching for a mortgage lender I recommend finding a lender that specializes in Home Mortgage lending. Many of the big banks like Chase, Bank of America and Wells Fargo primary function is to act as a bank. They all provide mortgage loans but the service is not as good and many times are late on deadlines.
The next step in the home buying process is finding a professional Realtor to assist you along the way. The real estate industry has people of every background and situation working in some capacity. Many of the licensed agents around the country are part time agents. I recommend finding you a good full time real estate agent. Full time agents are going to be more in tune with what’s going on and in most cases will have a great deal of experience. I sometimes ask myself when it comes to part time agents- “Do you want somebody helping you buy your most expensive asset when they can’t make enough money doing it to work full time?” I have met some agents that work part time and are sharp and savvy in the industry but as a rule of thumb I recommend finding a good full time agent. When looking for an agent you can look around town for different real estate firms in your desired area. I then recommend you go in and interview at least three different agents. The agent that makes you feel most comfortable is who you should work with.
The most exciting part is the quest of searching for your home. Your Realtor will be responsible for searching for homes that meet your criteria and bringing you on showing appointments to view the properties in person. However, if you are a hands on type person you can do some searching for homes on the internet that you want to see and forward them on to your Realtor to schedule a showing. Unless, you find a home that is everything you could ever want I advise going out looking at properties 2-3 times. This will give you a chance to get a feel for different areas and also allow you time to make sure it is a house you want to put an offer in on. Keep in mind when you are looking at homes to look past cosmetic things like a paint color you don’t like or the color of the current owner’s furniture. These are all things that are easy to fix and not worth passing up a good home over.
Contract negotiating- This is where having a great Realtor will pay off. Negotiating a contract and representing your best interest in a deal is critical to making sure you do not get ripped off. Most real estate contracts will have a few key points:
1- Offer Price
2- Closing Date
3- Earnest Money
4- Option Fee
You will also find addendums attached that will advise you of different things to consider with this property. They could be in relation to flood zones, hazardous waste, lead paint, home owners associations and even repairs that need to be done on the property. The Realtor will be able to use comparables to determine what the house should be worth. Your agent derives these comparables by running what is called a Competitive Market Analysis or CMA. I find the best way to run a CMA is to take the subject property you are looking at putting an offer on and then find every home that has sold or is pending sale meeting the following requirements: plus or minus 200 square feet, plus or minus 2 years built, same subdivision and going back 6 months from the current date. If that criterion doesn’t yield enough data then you may need to broaden the requirements until you are able to determine a value. Value is usually based on dollar per square foot. For example say the average sale price in your desired neighborhood is going for $90 per square foot and the house you want to buy is 3,200 square feet. Under these numbers you could be looking at about $288,000 being a fair price for the home. The Realtor and you will have to take into account special things like swimming pools and granite counters that may make the value of a particular home slightly higher than its comparables. Just remember two things when it comes down to the contract. Everything is negotiable and do not assume anything! If you really want to keep the refrigerator because it fits perfect in the kitchen throw it in the contract as stuff that must stay with your offer. On the same hand don’t assume those special curtains that match the living room walls are staying. Get everything in writing- verbal is not good enough!
The long hard road is finally coming to a grand finale! You are going to get the keys to your new home. A good realtor will stay on top of your transaction from start to finish ensuring the title company has everything needed to close on time. Make sure your hand is rested because you will be signing a few documents! Congrats on making it through the process please contact us here if you have any questions and we will be thrilled to assist you with the home buying process!