A Step-by-Step Guide to Homebuying
We know buying a home can be a very time consuming, stressful and overwhelming experience. To help we have put together a brief guide to assist you through the madness.
1. Selecting Your Realtor
Most people select their realtor by referral from a friend or family member or by selecting an office with a reputable name. This is certainly one way to go about it and may work just fine. However, not all realtors are created equally. Here are a few tips for selecting a good realtor:
Pick a Realtor That is Credit Union Friendly
Some of our members have reported being forced to use a specific lender of the Realtor’s choosing. Members have stated the Realtor tells them they “must” use the specific lender in order to secure the home. This is an illegal practice and violates your rights as a home buyer. If you encounter this practice, please contact us immediately.
Check SCCU’s Watchdog Realtor Ratings
Get feedback directly from other credit union members who have utilized the Realtor’s service.
Use Official Industry Websites Such As www.REALTOR.org
Find the Realtor that is just right for you. With the ability to search by location, certifications, language and business specialties you will be sure to find a Realtor that meets your needs.
Ensure The Realtor Has A User-Friendly Web-Site
This will save you a lot of time and a lot of gas. No need to drive around from house to house on your Saturday and Sunday afternoon, searching should be easily done right from your own home.
2. Finding Your Dream Home
Searching for just the right home is just the right time to be picky. After all, when the dust settles and the boxes are unpacked you want to be happy in the home you have selected. Here are a few tips to get you headed in the right direction.
Know Your Price Range and Stick to It
Buying a home is an emotional decision; try not to let yours get the best of you. Aim for a monthly payment you are comfortable making while maintaining your desired lifestyle. Also, going beyond the amount you have been pre-approved for may result in the need for a larger down payment.
Location, Location, Location
The right location is one of the most important factors in purchasing a home. Consider how close you will be to work, schools, shopping, recreation, highways, airports, etc. Also, become familiar with the
type of neighborhood. Is there a Homeowners Association (HOA)? Are you in a flood zone? Are there future plans for development that could alter your decision?
Know the Cost of Property Taxes and Insurance
The cost of property taxes and insurance can be deal killers. These costs will be figured into your monthly payment and affordability of the home. If the home is located near water or in a flood zone you can expect a significantly higher insurance premium. The same holds true for property taxes on homes in more desirable areas or with more land. At the time of your pre-approval these costs will be estimated, but any fluctuations could have an effect on the amount you are eligible to borrow.
There are many great websites that will allow you to view hundreds of homes in your desired area and provided detailed information about the home and the area. All of this can be done without ever leaving your home. Some of the sites we like are:
3. Making an Offer
Making an offer can be one of the most stressful steps in purchasing a home. You will want to be prepared for some back-and-forth and even the possibility of the deal falling through. To help you get the most value for your money we recommend the following.
Know the Comparables
To get the home for a fair value it is essential to know what others have paid for similar homes within a reasonable distance from the home you have your eyes on. This information should be provided to you by you Realtor. However, it can also be found on many of the home search sites such as those we have recommended above. A good rule of thumb is to only look at sales in the last six months.
Ask for Closing Costs to Be Paid
Often time’s buyers are successful at offering close to the asking price, but requiring the seller to pay closing costs. If successful this is one less out of pocket expense for you and a potential source of funds to make your move less stressful by hiring movers.
Ask for Contingencies
Sometimes deals fall apart and you want to ensure you are protected. Ensure your offer is contingent on obtaining financing, a satisfactory inspection and a reasonable appraisal. In the event anyone of those items fails you will not be contractually obligated.
Make Sure You Are Provided Enough Time For Closing
It is not uncommon for a seller or their agent to attempt to rush the deal by requiring a closing within an unreasonable amount of time. While some loans can be processed more quickly than others, you should ask for a minimum of thirty days to close.
Be Prepared to Accept Their Counter-Offer
Many people lose homes during the offer process because they are dead-set on ‘their’ price and are unwilling to budge. Carefully consider the counteroffer, you would be surprised how little a few extra thousand dollars adds to your monthly payment. If the counter is reasonable, you can still afford it, and you absolutely love the home, don’t be afraid to go for it.
Be Prepared to Walk Away
For as many people that fall into the category above, there are just as many who may foolishly pay more than they should. If you have done your homework and your offer is fair, you have carefully reviewed the counter for reasonableness, and you still feel they are asking too much…walk away. While this may be difficult ‘in the moment’ remember there are more homes and you will find the one that is right for you.
4. You’re Offer Was Accepted, What’s Next?
If you’ve made it this far congratulations, but the fun isn’t over yet. Not to worry, we’re here to get you through the rest.
Send us the Contract ASAP
The contract is required to begin processing your request for loan closing. The sooner we receive this, the sooner you will be calling the movers. To get the process started, call your Express Sales Associate directly or request assistance from our Mortgage Processing Department.
Watch Your Email and Sign Disclosures ASAP
Your initial disclosures will be provided via email. Be sure you look for these disclosures within 24 hours of confirmation your contract has been received. Without signed disclosures we cannot proceed.
Provide Payment for the Appraisal
Again, this will assist us in expediting your closing.
Have Your Documents Prepared
You will be required to provide more documentation than you probably care to. We will do our best to minimize this for you and make the process as convenient as possible by allowing you to upload documents online. The minimum documents you should have prepared are:
Last 2 Years of Tax Returns for All Borrowers
Last 2 Pay Stubs
Last 2 Months of Bank Statements (If you provided a list of assets we will require bank statements for those accounts. In addition, we require bank statements for the accounts holding your funds for closing costs/down payment)
Call Us With Any Questions You Have, We Are Here to Help