While this article was originally geared towards the first-time homebuyers, often a ripening age and the passing of time since your last purchase might slide you right back into that greenhorn status. Following are the steps you can expect to take when buying a home . . . at least in Kentucky! There are real estate laws and a this-is-the-way-we've-always-done-it" mentality that sets each state uniquely apart, so talk to a local Realtor before you decide to purchase. That's what we're here for!
Though this must-do tip is not an official "step," I'm going to say it anyway . . . stop making late payments! It affects your credit, adversely. Which brings me to the authentic first step.
FIND A LENDER! Okay, I dont mean to yell, but as first steps go, this one's a doozy. I can't stress enough the importance of finding a mortgage lender. Many a dream home has been lost because the debt-to-income ratio just doesn't jive or your credit rating has dropped significantly when you weren't even looking.
The unofficial rule of thumb for finding a lender is to talk to at least three of them. And tell them you're shopping around! This encourages lenders to not only find the best loan for your situation, but a little competition might go a long way towards reducing your interest rate. Don't be concerned that lenders pulling your credit will affect your credit rating. Not the case anymore. Once you've found your lender, you can lock into the interest rate for 30, 60 or even 90 days. But you dont have to. Keep in mind, though, that the interest rates could change before you lock in.
Your lender will then give you a letter of approval or commitment letter. Times being what they are, many sellers/Realtors want this submitted right alongside the offer.
Decide on a Realtor. Dont even look at homes without first finding a Realtor. And I'll tell you why. I am nauseatingly consistent in telling people this: Realtors are just people. And there are good people and bad people . . . Some people are lazy. Some are air-headed. Some are indifferent. Some are just plain mean. You never want to be stuck with someone you don't like or trust. Pick the Realtor you want.
There's a little known term that most laypeople dont know. Its called "Procuring Cause." What that means is that if a Realtor shows you a home that you decide to buy, you cannot then bring your own Realtor into the mix. There are disgustingly few exceptions. The first exception is if the Realtor that showed you the home is sweet enough to give up his commission out of the goodness of his heart and allow you your chosen representation. Enough said. The second is if your Realtor will guide you through the process and expend effort and time without pay. Also enough said.
Finding a Realtor is easy. Talk to people you trust. Ask them if they liked their Realtor, and why. Good Realtors should get more business from word-of-mouth than soliciting folks at their doors.
Please, please remember, though, that Realtors aren't perfect. We make the same mistakes that other humans do. Try and cut us at a little slack when we don't call you back right away because our phone fell in the toilet. Stuff happens.
Search for a home. This is one of the most enjoyable aspects of the process, but make it easier both on yourselves and your Realtor. Prepare. I know that when you've finally reached this stage, you're chomping at the bit to "kick some tires," but it's important to narrow the search down first. Make a wish list. Write down all the things that are important to you. If you must have a first-floor master, write it down. If you want a basement but will do without one for the home that has a ton of storage space, leave it off. You don't want to waste everyone's time looking at homes you're not going to buy, but you also don't want to miss a terrific home because your criteria is choking it out.
Writing the offer. Once you've found your dream home, it's time to make an offer. Your Realtor will hold your hand throughout this whole process, but I'll address briefly what to expect. Having decided on the home to buy, your Realtor will do some research on your behalf. She'll run the comps to find out if the home is priced accordingly, how many days it's been on the market, etc.
Armed with all the information revealed by your Realtor, you'll submit an offer on the home. It will either be accepted, rejected or countered. If the seller counters the offer, you will have a limited amount of time to respond with your own rejection or counter. Once the offer or counteroffer is accepted, you move on to the next stage.
Inspections. Your contract should allow you a time limit for inspections. Some states may require home or pest inspections, some may not, but they are highly encouraged. Let me put it this way: If I am your Realtor and you decide not to have inspections, I will require you to sign a Home Inspection Disclosure stating that I pleaded shamelessly with you to have inspections, but you declined and therefore release me from any liability resulting from said refusal . . . or words to that effect. Have inspections!
Many lenders will require you to have termite inspections. That's okay. In Kentucky, the price for the inspection is minimal. But home inspections are equally (if not more) vital. For a few hundred dollars, you can find out beforehand whether or not there are any plumbing leaks, foundational instability, shingle damage, repairs and/or renovations that are not up-to-code, if your chimney needs tuck pointing or your tub drains slowly, whether your bathroom has proper ventilation or the attic has adequate insulation, whether there are electrical issues, siding issues, drainage issues . . . the list goes on. Again, have a home inspection.
Once the inspections are concluded, if you didn't state in the contract that you were buying the home as-is, you can ask the seller to make repairs. Please don't make the same blunder that some married folk find themselves making. You need to pick and choose your battles. If you can fix it yourself for minimal cost and effort, don't ask for it. If it's no big deal to you in the whole scheme of things, let it go. The mistake most people make is nickel-and-diming the sellers into wondering why they ever accepted your offer in the first place. Let your Realtor be your guide. A good starting point is safety. You want to make sure the home is safe before you pack it full of kids, pets and all your worldly possessions.
Escrow. Escrow is just the period of time from contract acceptance to closing. Its boring, but you can offset the tedium or lessen the anxiety by packing. Now is the time to box up your possessions. Meanwhile, your lender is working to set the closing date and gathering any necessary paperwork that may be missing.
Utilities. Remember to call the utility companies a week ahead of the closing date to schedule the turning on or transfer of service for the day of possession.
Closing. This is it! Whether you're jumping from the closing table into the moving van or waiting because you've given the sellers a few days to move out, you will own your home today! Be prepared to sign enough paperwork to line your new kitchen. Either before the closing agent sticks a pen in your hand instructing you to "sign here, here and here" or when he's out of the room making copies is the time to ask the sellers what day is trash pick-up and whether or not that ugly bush is on your property or your neighbor's.
But equally important, dont forget to recommend your Realtor to others. We feed our families on commission!