The Home Buying Process
Browsing on the internet is a great way to familiarize yourself with an area and the home buying process. But when its time to start seriously looking for your new home, you’ll want to choose an agent to work with that can assist you throughout this process. When choosing and agent, you want someone who will understand your wants and needs and guide you every step of the way. You may speak with several different agents until you find one that you can work well with. You want someone that is available to you. If you work very firm hours and need someone who is available to talk after hours, or weekends, make sure you discuss that so that you don’t become disappointed or frustrated down the road.
Below are my recommended steps to follow to help you understand the home buying process, and what to expect.
Meet with your agent
Whether this is by phone or in person, its important to take the time to discuss what’s to come so that you and your agent are on the same page. This is the time to discuss the area, see what homes are available in the area that you would like to be, and match that up against your expectations that you have in a new home. You likely have an amount in mind that you are thinking of spending on your new home, and perhaps have been doing some home searching online to get an idea.
During these initial conversations, you will be able to get a clearer picture of what is available, and what the price points are for what you are looking for.
Get pre-qualified
Nothing is worse than falling in love with a home, and then realizing its not within your budget. The most important step in the home buying process is to know your budget, and to only look for homes that fall within that budget.
If you will be taking out a mortgage, you will need to speak with a lender, and get pre qualified. You may have someone in mind already or may need a referral. A pre qualification is a fairly quick and easy process, and will tell you exactly what price range you can purchase, based on the monthly payment that is comfortable for you. Having your documents ready such as pay stubs, w-2’s and any other pertinent financial documents will speed up the approval process.
You may use any lender of your choosing, however, working with a local lender to the area that you are buying your home in, is the best way to ensure a smooth transaction. A Local lender will be most familiar with the area regulations for insurance, flood zones, and local taxes and assessments.
If you are paying cash for your home, then your budget is already set! A simple bank statement showing your available funds will be sufficient to get your pre-qualified. This is called your proof of funds.
Before you begin to look at homes, you will need t provide your agent with your proof of funds or pre-approval. Most homeowners will want to know that you have shown proof before they will allow showings and once you are ready to make an offer, this will need to accompany your offer.
Double check your budget
Once your budget is set for your purchase price, you will want to make sure that the taxes and insurance are within the range of the lenders estimates. This is another huge benefit of using a local lender that knows the area and can give you the most accurate estimate of these costs. I have seen some online lender calculate the yearly taxes of a home to be $2,000 per year, when in fact the taxes are actually $7,000. That is difference of almost $400 a month and can push people well out of the comfort zone, or disqualify them from the home.
Taxes and insurance will vary form home to home, so once your further along in the process, more specific numbers can be determined. You will see property tax information listed on the listings. However, you CANNOT use those numbers. Property taxes are recalculated when a home sells. Please don’t hesitate to ask what estimate of the tax will be if you were to purchase. For homes in Lee County, we can run an estimate for you. You can also view property tax information on the Lee County Property Appraisers
Set your search criteria
You already know what price range to search for. Now its time to make your list of “must haves” and “would likes”. This is the time to be truly honest with yourself, and your agent, and know what you absolutely cannot live without. You may have already started looking at homes on online, and that’s great! At this point, your agent will set you up on a search portal, if that hasn’t been done already, and set your specific needs and wants.
Be flexible
Sometimes you can get all your wants and must haves within your price range. Sometimes, you cannot. I see it often. You want a very specific type of home, in a very specific neighborhood, for a very specific price. But sometimes that home does not exist. It is very important to be flexible throughout the home buying process.
If your uncertain of what you really want, I recommend starting your search without very specific criteria, and seeing what homes in the area have to offer in your price range. Now of course, if you want a home with a minimum of 3 bedrooms, or within a specific school zone, then stick with that, but maybe be open about flooring type or the layout. Flooring can be changed, and you never what you will fall in love with, even if its not what you thought you were looking for.
Perhaps a preliminary look at some homes would be best to help you decide. Taking a look at some homes in different neighborhoods, or different home styles, whatever is it that you were uncertain about can be helpful. Do you love and open, modern kitchen, the pool with a hot tub, and that specific neighborhood in the SW Cape? Great! Now lets focus on that area and concentrate your search solely on those homes.
Looking at homes
Now that you have narrowed it down, lets go see your list of top picks! This list may have 2 homes on it, it may have 15. Either way, you are making progress. At this stage, you will have a good idea of what your looking for, and a good idea of your costs for your payments and taxes will be and can make an informed decision. This is the fun part of the home buying process!
Make an offer
You have found your dream home!! Awesome! Now its time to make an offer and move forward with your purchase process! During this time you will go over all the details of a Florida sales contract, and all of your terms such as, offer price, deposit amount, time needed to conduct any and all inspections, what inspections are recommended, time frame needed to get your loan complete, or time to get your funds together, and when you would like to close.
Contract negotiations
You have made your official offer in writing, and now you wait to hear from the seller. They will either choose to accept your offer, or make a counter offer. Once you and the seller have agreed on price and terms, you will be officially under contract.
Under Contract
Once all parties have signed the contract, you will have obligations to meet in certain time frames such as deposits, inspections, and loan applications. Once you have met all these deadlines, that will be outlined in your contract, you will want to get your insurance and utilities set up and wait for your closing date.
For information regarding utilities, please visit Helpful Information Before Closing.
Closing day!
Once you have signed all documents, and all funds have been transferred, you have successfully made it through the home buying process! Congratulations! You are officially a homeowner!
*For information you will need after closing, please click HERE.