Residence. Flat. House. Investment. Dwelling. Abode.
If this is your first time purchasing, find below a few good tips to give some clarity to this memorable and exciting next step in your journey.
1. Decide what you want.
What kind of home?
Do you prefer a 2 story? How about the basement? How many bedrooms do you need? Do you want to mow a large yard or a small yard? Do you have a romance for an old house, or do you want a contemporary new home?
Do you like the North side - maybe Fishers, Carmel, Noblesville? Do you want a more urban feel with a place downtown? How about something in the middle, maybe Broad Ripple?
When considering the "when", be sure you think about the commute to work, schools (for children you have, or those you may have in a new home), and amenities such as community pool, convenience to town, etc.
When are you going to be ready to move? Have you given enough thought to this that you are ready now, as in yesterday, or do you need more time to prepare?
2. Get Your Financial House In Order.
What can you afford?
What can you bring for a down payment? How about taxes and closing costs? What is the monthly budget amount that is in your comfort zone?
3. Get Pre-Approved.
According to the National Association of Realtors, 9 out of 10 buyers finance theirs homes. Talk to lenders. Find one you are comfortable with, that is offering you the best arrangement.
Obtain a pre-approval letter, have this on-hand when you make an offer on a home so that the seller knows you are prepared.
4. Find a Realtor.
Meet Realtors, interview them. Sometimes you can do this by attending open houses in the areas you like, browse profiles, or read recommendations from lenders. Most importantly, talk to your friends. They can assist you in who they may have used in their experiences and offer invaluable suggestions.
5. Find a Home.
Finally. The fun part. You know where you want to be, what kind of house you are looking to find, you know what you can spend and you have your approval letter in hand. Now...get to shopping.
At any given time, there are homes going on and off of the market. Inventory of choices is altered on a minute-by-minute basis. The best part of shopping for a home in today's market is that you can do the work yourself by peeking around Zillow, Mibor, Trulia, and so many other websites, or you can give your honey-do list to your Realtor and they can do the finding for you.
When you arrive at a showing, think critically about the home. If you like the curb appeal as you drive up, that's a good start - but, even if the landscaping is nothing to get excited about...is there something you can work with to make it your own? When you walk through the front door, is the layout suitable for your needs? Some things can be changed inside of a home, but are you looking for a fixer-upper or a move-in ready? Are the bedrooms large enough? How about the yard?
6. Understand Mortgage Options.
So, you've found something that you love and you're ready to crunch numbers. Note that financing will be more than the purchase price of the home. As discussed above, there will be closing costs, taxes and other fees. Be prepared. Now is also the time to consider what amount of money you will put down on your home. If you put less than 20% down, lenders will want the mortgage guaranteed by an outside 3rd party such as VA (Veterans Administration), the FHA (Federal Housing Administration), or a private mortgage insurer (PMI) to protect against mortgage defaults.
Financing is available through mortgage bankers, mortgage brokers, savings and loan associations, mutual savings banks, commercial banks, and credit unions.
7. Make an Offer
Your choices on the offer-making process are to 1. accept list price 2. make a counter-offer with different pricing and/or terms of sale. Be sure that you are prepared to confer back and forth with the home owner to reach an agreement that is acceptable to all parties.
Once an offer is accepted, a few things can happen next. Structural inspections of the home, appraisals and surveys to determine boundaries and values for lenders, and title reviews.
8. Insurance and Warranties
Title insurance will be suggested at closing for a one-time fee. This will protect you in case the title is invalid.
Homeowner's insurance will aid in protecting your new investment. It covers fire, theft, liability, etc. Be sure you know beforehand if you will need flood insurance.
Home Warranties will depend on whether the home is new or existing. Talk to your realtor about the specifics of a home warranty and what will be covered.
9. Close on Your Home
Closing is the finality of your home searching experience! There will be a lot of paperwork signing and the title will be transferred as well. Be sure that the utilities are paid up and switched over as needed.
10. Tie Up Loose Ends
Consider changing the locks to your new home, just to caution on the side of safety. Two weeks following closing, contact the local property records office and confirm that the deed was recorded.