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First time home buyer….Where to start & what to expect
Congratulations on deciding to take the plunge into being a first time home buyer and stop paying rent! Rent is basically paying for someone else’s children to go to college and owning a home is one of the best financial decisions you can make for YOUR future. Buying a first home can be a daunting process. Here are the basic steps to home ownership:
1. Mortgage pre-approval. 
The first step in finding a home is knowing how much you can afford. Contact a mortgage professional and they will ask you a few quick questions and let you know how much a lender would give you to purchase your first home. A lender takes into consideration things such as income, debt, length of time at your current job and credit score. This will allow you to be realistic about size, location, work needed to go into a home, etc. Lenders can also help you identify any special programs you may be eligible to receive.
2. Determine your criteria.
What area(s) would you like to live in? What do you want must haves and want are your “would like to haves”? Are there certain deal breakers that will determine what neighborhoods you can consider? For example, do you need to have a fenced in yard for your dog? Then you had better be sure the HOA allows fences! Are you willing to put in some elbow grease to update a home? Do your expectations of location and features match your budget? Are you thinking you will be able to get a 4 bedroom, 5000 sq ft home for $200,000 in a neighborhood where they are normally $500,000? Be sure your expectations are realistic!
These are just some of the questions you should ask yourself prior to looking for a home. It is important to remember that rarely is a home 100% perfect. You need to determine what features of a home you have to have and which you can add or live without. Search here for your next home!
3. Enlist the help of a real estate professional.
In most circumstances, the person selling the home pays all of the commission for the real estate agents. Why not solicit help in your search? A qualified agent helps you understand the area, if the home is fairly-priced, and the current trends. A professional will guide you through the process from start to finish always keeping your best interests in mind.
4. View properties and make an offer.
If you have followed the steps above you shouldn’t have to see more than 5-10 homes to find the perfect one for you! Once you find your home your real estate agent helps determine the offer price and what other items to ask for in the purchase agreement. After possible counter offers from the seller an agreement is reached. The next step is submitting earnest money. Typically this is presented via check to the listing agent and represents around 1% of the offer price of the home (depending on purchase price).
5. Inspection.
It is recommended that you receive an inspection on the property. This will not only identify any issues with the property, but provide knowledge for you on the ins and outs of your new home. You should plan on being present at the inspection and bring all your great questions. This is probably the last time you will be able to be present in the home before closing. So this is also a great time to measure for furniture and bring paint color swatches.
6. Appraisal.
Your lender will require an appraisal to be done on the home. The appraisal is a subjective determination of value by a professional licensed appraiser. You will pay for this through your lender. If the appraisal amount comes in low, you will enter another round of negotiation on the price.
7. Closing.
After all the hurdles are jumped and negotiations are complete it is time to schedule a closing! In Indiana closings happen at a title company. All parties and their real estate agents sit at one table and sign the papers. At the end, you get the keys and are a homeowner!
Congratulations on taking this important step to home ownership. As a first time home buyer, I am here as your agent to guide you through the entire process and help you realize your dream of owning a home. Please reach out with any questions, or to set up your first showing appointment!
