Home Buying Guide to Getting Started

Guide to Home Buying Step-by-Step

Let's say one morning you wake up and realize that, yes, you should buy a home. You're tired of throwing away money on rent and figure that it's time to get into a home of your own. But you have reservations.
After all, if it's your first time, you've got questions. You might be a little nervous that you'll mess up, and it's normal to feel that way.
First, you need to gather information. Information is empowering. Lucky for you that you came to the right place. So let's get started buying your first home!

Learn From Other's Mistakes
Smart people learn from the mistakes of others. May all your home buying mistakes be new ones!

More important, homes to avoid are those with a bad layout or obvious (patent) defects. If you are considering a home with obvious defects, research ahead what will be involved to fix these defects, what it will cost and what amount of time will be involved.

Order a Free Credit Report
Your credit report will determine the rate and terms of your loan. You can order a free credit report online. If you have bad credit because of late payments or a recent bankruptcy, you can still buy a home; you'll just pay more in rate and terms.

Find a Real Estate Agent
There are millions of real estate agents in the business and plenty of reasons why you want to hire an agent to help you. The trick is to find a good real estate agent. Once you settle on an agent, expect to sign a buyer representation agreement or a customer service agtreement, There is a big difference between the two, make sure your representative explains this to you. You will need to sign an agreement for representation or service when you write an offer.

Interview Sales Representatives
After you find several agents, it's smart to interview those agents before selecting your representation. Learn the differences that each Realtor has to offer and choose what's best for you.

Understand How Agency Work
What you've heard about agents from friends and family might not be true. Review agent protocol and ethical rules before you get into hot water, and remember that agents face restrictions regarding their fiduciary responsibility to you. Agents face stringent ethical rules these days for the protection of the consumer. Consider carefully working with an agent who doesn't fully explain these to you.

Find a Lender You Trust
Your bank isn't the only place to get a mortgage these days. You have other options. But do recognize the signs of predatory lenders and stay away from them. Once you find a lender you like, interview your lender before making your final selection.

Apply for a Mortgage
Explore mortgage options. Figure out how much money you will need to put down, as there are many ways to find a down payment. Decide if you should lock your loan rate upon application. Then ask for a preapproval letter from that lender.

Look for a Home
Is there a good day to buy a home? Don't pass by overpriced homes and do take time to look at new homes. Builders offer amenities and hot trends that may payoff big when you sell. When buying in a down market or a slumping marketplace, it's important to act fast.

Make an Offer
You'll write purchase offers differently for a buyer's market than seller's market offers. Avoid offer rejection by employing sound negotiation techniques, putting up a reasonable earnest money deposit and using counter offers to your advantage.

Get a Home Inspection
Always get a home inspection, and remember to look in the attic. Follow up your home inspection with a final walkthrough before closing. Beware of hiring a bad home inspector. If you didn't ask for a home warranty in your offer, considering paying for a warranty yourself.

Obtain Home Disclosures
If you're buying a condo or townhome, get a copy of the homeowner association documents. Also, the seller should provide you with a variety of home disclosures and disclose material facts.

Buy Home and Title Insurance
You can save significant money by shopping for home insurance after signing an offer. It's smart to buy your own owner's title insurance policy, as you will also insure the lender separately. Title insurance will disclose covenants, conditions and restrictions.

Save for Purchases After Closing
After you have taken possession, you may then realize there are things to buy you have not considered. Consider them now.