When you’re prepared for the processes, buying a home can be one of the most thrilling adventures of a lifetime. However, if you go in blind, you can find yourself sideswiped by reality, a rude awakening from the perceived American Dream. Before you hop on to that home-buying band-wagon, here are some steps to follow.

Credit Score

Step 1: Before you even begin to look for your dream house, it’s imperative that you get your financial affairs in order. This means not only polishing up your credit score to pristine condition and saving up for a down payment, but also in seeking out pre-approval for your home mortgage loan. Neglecting the financial preparations could lead to stress and frustration as contracts get stuck in limbo while loan processes take place. You may fall madly in love with a house only to find out you’re not qualified, or lose the house to another buyer who already has their loan secured.

Finding the Best Real Estate Agent

Step 2: Seek out a qualified, professional real estate agent to guide you through the phases of home buying, from home searches to contract negotiations and required services.

House Shopping

Step 3: When investigating potential properties, dig deeper than ideal location, price point, and a fancy wish list. Be reasonable and understand fair market value. There can be unrealistic expectations of what you get for your bucks. Explore the neighborhood, potential homeowner’s associations, be aware of high traffic, loud areas, construction, and distance to amenities such as shops, restaurants, and recreation. Check out the condition of neighboring properties and yards, and then fully explore the structure of the property.  When you’re fully satisfied that you’ve found “the” house, your real estate agent will help you make an offer and move into the contract phase of home buying.

You should also be prepared to write a check for an EMD, or earnest money deposit, with your offer. The earnest money deposit is a way for you to put your money where your mouth is to prove to the seller that you’re equipped to take action. Also, when making an offer, carefully review the seller’s timeline to determine a closing date. Expect the entire process to take anywhere from 30-90 days, respectively. There’s no such thing as “instant gratification” when purchasing real estate, and most real estate transactions require a great deal of patience.

Appraisals, Home Inspection

Step 4: Once your offer is accepted by the buyer, the bank needs to ensure that the property is worth the amount being borrowed in the home mortgage loan. To accomplish this, an appraisal and home inspection are required. Appraisers take into consideration the age, size, features, and general condition of the property whereas the inspection is designed to uncover any major flaws such as system failures or defects such as with plumbing, electrical, and structural elements like foundation and roofing.

In most cases, the fees for the appraiser and inspector are included in closing costs, a lump sum the buyer typically pays at closing. Your lender or real estate agent can recommend independent appraisers and inspectors. This is one of the only phases of the home buying process where negotiations are still acceptable. Negotiations may include a lower price in lieu of repairs, required repairs prior to sale, or, in the worst case scenario, the buyer can back out of the contract if the appraiser and/or inspector reveal monumental discrepancies in the condition or value of the home.

Negotiations

Step 5: An escrow officer is an independent agent responsible for handling the finances and clerical processes of the home buying process. The escrow agent arranges for a title search to verify there are no liens or holds on the property, arranges the transfer of title, and then dispenses funds where appropriate on closing day. Those closing costs take into account the lender fees, appraisal and inspection fees, and also the commissions earned by the buyer’s and the seller’s real estate agents.

Close of Sale

Step 6: Once all documents have been signed and fees paid at what’s referred to as “the closing table”, the keys are transferred from seller to buyer, and the seller has already vacated the property.

Preparation and patience are key elements in purchasing real estate. Don’t shop until your finances and credit are in order. Work with a qualified real estate agent. Be realistic with your budget and wish list. Be prepared with earnest money deposit and down payment. Expect the appraisal and inspection to be lengthy processes.

Your real estate agent is the best source of information about the local community and real estate topics. Give Jon Bastian a call 772.291.8851 or Nancy Bastian at 954.816.2061 to learn more about local areas, discuss selling a house, or tour available homes for sale.

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