Steps to Buying a Home
1.
Check out local real estate listings in the newspaper or online directories
like Realtor.com, the official
website of the National Association of Realtors, containing over a million
mls (multiple listing service) listings.
2.
Research neighborhoods for affordable housing near your work, good schools,
and shopping.
3.
Is the neighborhood safe? Check the police department and the newspapers
in your city to find crime stats:
4.
Find a real estate agent. You may find an agent in the newspaper, yellow
pages or through an online directory such as Realtor.com.
Keep in mind that the agent is the SELLER'S advocate and works on commission,
receiving around 15% of the selling price.
Some agents
are independent and local, while others are franchisees of large national
brokerages like Coldwell-Banker and Prudential.
!
NOTE: If you are interested in a newly built home, you must contact
the builder's representative for that development. New home prices are
normally not negotiable.
5.
Ask the broker to "pre-qualify" you for a mortgage. Unless
you are planning to pay most or all of the purchase price in cash, you
will need to shop for a "mortgage," or home loan. The maximum
mortgage you can receive is based on your annual income, length of employment,
credit history and other factors. Knowing your allowable mortgage will
let you narrow down the appropriate price range so you won't be rejected
for a mortgage after you've made an offer.
6.
Once you have picked a few homes you would like to see, make an appointment
with the agent, builder's rep or owner. Many homes will have an "open
house", usually held on a weekend, where people can casually survey
the home.
7.
If you find a home that looks suitable for your needs, make an offer
contingent on an inspection. An inspection can detect hidden problems
with roofing. plumbing and construction. If the home is in an area prone
to earthquakes, you should find out whether the home is retro-fitted.
A properly retrofitted home should be bolted to the foundations. Note
whether the home is prone to mudslides and flooding - e.g. is at the
bottom of a treeless hill. Also note areas prone to future erosion,
like houses perched on cliffs that may collapse or on beaches that may
disappear.
8.
Make sure you know everything included in the price before making your
offer. Be prepared to negotiate the price. Unless the home is newly
built, you can negotiate both the price and items included in that price,
like new paint, appliances, etc.
9.
If the offer is accepted, the agent or owner will contact you to set
up a contract signing.
10.
Obtain a mortgage - mortage financing is a competitive buisness. You
can shop around for the best deals. You can choose from a 15-year or
30 year mortage with a fixed or variable interest rate. Some buyers
prefer to wait until interest rates bottom out before buying a home.
Useful
links on mortgage purchasing:
What
price can I afford? See:
http://www.bankrate.com/mortgage.aspx
Homegain
provides a number of tools, including current mortage rates for different
states, compare loans, learn mortgage terms like rates vs. points).
11.
Buy homeowner's insurance:
http://www.netquote.com/nq/s-home.aspx
12.
Buy mortgage insurance:
http://www.insurelog.com/mortgage-insurance.htm
