8 Steps to Buying - When You Own a Home!
Be smart when buying and selling -- use these 8 simple steps to guide you through the process. And if you need help at any stage, contact me and I will help, whether it's a referral you need, listings of homes to buy, or getting an estimate on your home. I'm here.
1. Get an estimate on the value of your home. You don´t need a full appraisal at this time. All you need is an estimate prepared by a qualified real estate agent that knows your area. The estimate should be based on the values of homes recently sold in your neighborhood, that are similar to yours in size, age, etc.
2. Call a lender and ask to be pre-qualified for a loan. At this time, you don´t need to go through the lengthy process of getting pre-approved for a loan. That will come later when you know for sure you want to buy. There should be no fee for this service and you are not obligated to use the lender you call when and if you do decide to buy a home. If you don´t know whom to call, ask your real estate agent.
3. Start looking. You can begin on the Internet to get a rough idea of what is out there and available. Services provided by agents using the MLS and my service, JustListed, provide up-to-date information. Many websites are outdated! Even Realtor.com is not real time. Once you begin to have an idea of what you want, tell your agent you want to preview homes to be sure that you want to buy a home, before you list your home. Because pictures on the Internet can be deceiving, you really do need to go preview at least 3 homes. When you feel confident that you can afford something you like, you are ready for the next step.
4. Do the numbers to make sure you have the cash. Your closing costs will be about 1.5% of the price of the home. You will need this amount of cash, and cash to make an initial deposit on any home you make an offer on. Most deposits range from 1-3% of the sales price. So, if you were buying a $600,000 home, you would need approximately $9,000 for closing costs and $6,000 for a deposit, on the low side. If you think you may be short on cash, be sure to talk to your agent and lender for creative ideas. There are many different ways to handle closing costs and deposits.
5. Select an agent to list your home. Commissions are negotiable, so don´t be afraid to ask about the commission they charge. If you have your listing agent also help you with your purchase of a home, they will generally give you a break on the commission. If you are still a little worried that you will find a home before you sell your home, ask your agent to sell your home on the contingency that you will find another suitable home. Look for a buyer that will work with you on a concurrent close of escrow, so you won´t be out of a place to live.
6. Once your home is listed and you are ready to start seriously shopping. It´s time to call your lender and go through the pre-approval process . Be sure to let them know you are out shopping for homes. When you place an offer, you will need a letter from your lender telling the seller that you have already been pre-approved for a loan.
7. Find a home that you want to buy. If your house still isn´t sold, you will need to make an offer contingent on the sale of your home. Sellers generally don´t like to accept these offers, so it´s always nice to have an accepted offer on your home by the time you make an offer on another. This is also the time to call at least 2 other lenders to compare rates and fees. Not all lenders have the same loans and rates, so be sure to shop now!
8. Sell your home and shoot for a close of escrow date that is concurrent with one you are buying. This isn´t always easy, so you might negotiate the ability to rent back your home for a specified period of time until escrow has closed on your new home.
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