First time home buyers have several important steps to consider.
Home buyers need to first make the decision to either work with a realtor or navigate the field of real estate alone. We highly recommend collaborating with a real estate professional who can save the home buyer both time and money. Realtors, like Paul and Dianna Howell, can guide any buyer through the process of selecting and purchasing your first home.
Here are some of the 10 “big steps” we journey through with our clients in the home buying process:
1. Consultation
The first step is a consultation with a real estate agent. In the initial meeting, you will get to know the realtor and see if he or she is a good fit for you. A realtor should be attentive to your needs, hopes and dreams.
The realtor should also provide a plan and discuss the necessary steps. The realtor should explain the costs involved in purchasing a home. With your best interest at heart, a good realtor will be your advisor and guide.
2. Pre-Approval vs. Pre-Qualified
Pre-Approval and Pre-Qualification may seem like similar terms, but there are fundamental differences between the two. Essentially, Pre-Qualification is a basic financial conversation between a home buyer and a lender. The lender can then “pre-qualify” the buyer’s home loan based on the information exchanged.
However, Pre-Approval is a financial assessment that allows a lender to access a home buyer’s credit report and financial records to provide documentation, showing the buyer’s approved loan amount.
Pre-Approval is a more accurate reflection of purchasing power than Pre-Qualification. For example, a Pre-Approved home buyer is much more likely to win a bidding war against a Pre-Qualified buyer. We highly recommend any buyer to get Pre-Approved before viewing homes so that you can have a realistic expectation of what you can purchase.
There are few things more disappointing than finding your perfect home and being unable to get Pre-Approval for the loan.
3. Expenses for Home Buyers
When it comes to buying a home, there are many costs. We recommend consulting with your realtor to map out the home buying expenses. The home inspection will be your first expense, and other inspections may be necessary as well, such as septic, radon, HVAC, etc.
In Alabama, the buyer is expected to pay half the closing attorney fees as well as half the title policy. Other potential expenses include loan charges, hazard insurance, taxes and surveys.
Your realtor can provide a custom assessment of your costs in a Buyer’s Net Sheet.
4. Research
After setting a budget, the real fun begins – searching for homes! We suggest searching initially online for homes in your budget and the area you desire.
The Howell Group of Alabama’s new website allows you to save and create an online file of homes you love as your search through listings! When you are ready, your realtor will make appointments to view your favorite homes in person.
5. Make an Offer
Making an offer can be the most exciting and unnerving part of buying a home. Your realtor should provide you with a market analysis value of the home and guide you through making the offer. A realtor will negotiate for you the best price and terms. They will hold your hand through this process.
6. Under Contract
Once buyer and seller agree on terms and sign the offer, the offer becomes an executed contract and everyone works towards closing. Now the inspection period begins.
7. Inspection
Inspections are necessary to ensure there are no hidden costs of damages unseen during initial viewing of the home. The inspection is done by a license/certified home inspector who knows what to look for. Depending on what the inspector finds, the home buyers may decide to purchase as is, get out of the contract, renegotiate the contract based on findings, or ask the seller to fix the issues. This process is also handled by a realtor.
8. Appraisal
The appraisal is ordered by the lender to assess the value of the home. Appraisal is another nail-biting process because of its potential to come in under value. If contract negotiations are necessary, a realtor will guide you through the steps.
9. Title Search
A title search ensures the home title is free of any liens against the property.
10. Closing
Finally, the day has arrived to make your dream home your own. All documents are signed by both buyer and seller.
The home is now yours!
We want to hear from you! What has been your experience when buying a home? What advice would you give first time home buyers?
If you or someone you know is in the market for a home, we would be honored if you would share this article with family and friends and personally connected The Howell Group, Paul or Dianna, with them.
For information on buying a house in the Birmingham, Alabama area, please contact Dianna Howell at 205-568-5435 or email her at dianna.howell@kw.com
Learn more about the home buying process in these related articles:
Search for homes in the Birmingham area on our website: www.thehowellgroupofalabama.com
