First Time Home Buyer...What to Expect in 10 steps -

The market is changing, again, and we are experiencing a slight pick up in buyers again. I recently closed a transaction working with a First Time Home Buyer. I love working with First Time Home Buyers because they are so excited about their new home and it brings a fresh take on the transaction which I see every single day. While no buyer is like the other, First Time Home Buyer’s are special. There are always lots of questions and the first thing I am always asked is “what to expect” so if you are a first time home buyer…this post is for you.

1- Get Pre-qualified for a loan

It’s important to know right out of the gate, what type of home you can actually qualify for. As a word of advice, just because you can qualify for a certain amount, doesn’t mean you should. Ask specific questions like “What will my monthly payment be?”. When you have a number in mind move on to step 2.

2- Work with a qualified Realtor

Interview your real estate agent, and ask for recommendations from your friends at family. Do no just call the name on the sign of the house you like. You want to be represented and as a buyer, the seller usually pays for your real estate agents commission, so just make sure you look at homes that offer a buyers agent commission. Make sure you find an agent that can accommodate your schedule and usually Full Time Real estate agents are going to be your best bet.

3-Start looking for homes

Usually the real estate agent will set you up on a system that will allow you to browse through active listings. They will discuss with you exactly what you are looking for and will narrow the list down the more they learn about your wants and likes

4-When you find the one

When you finally find the house you want, you will put in an offer. Be prepared to go through the negotiation process. Not very many offers are accepted without some negotiations. Don’t be afraid to make the offer you want to make and never get pushed into offering more than you can afford. Your real estate agent can run a quick Comp Report for you to make sure you are not overpaying

5-Pay your Earnest Money

Earnest Money is an amount of money that you agree to with the seller that will be held in a trust account. This money does go to your down payment on the house and there are a lot of deadlines in place to protect your money.

6- Get an Inspection

Do NOT skip this step. As smart as you dad is and as handy as he is, you still want an independent inspector to look at your biggest purchase. You will have a period of time to complete this and that is called the Due Diligence period. If you find something on an inspection that you don’t like you can either negotiate repair or money for your own repair, or you can walk away and keep your earnest money. Word of Advice….In Utah don’t skip the Radon Test. There are lots of options to get that done for free. Do it!

7-Appraisal and Financing

Your lender will be working behind the scenes and will most likely have asked for “conditions” from you. Make sure to get an documentation to your lender as quickly as possible. As soon as they have the approval from you, they will order an appraisal. This appraisal is conducted by an independent appraiser to give your lender a value of the home. If the value matches your purchase contract, you can move forward. If it comes in low you have options to, again, negotiate or walk away with your earnest money in tact. Your lender will also want to make sure before your financing and appraisal deadline that with your conditions in you can still qualify for the loan that makes sense to you.

8-Clear to Close-CD issued

This is a very simplified version, but once your loan is complete and all conditions are in and approved you will be issued a Clear to Close and the CD (closing disclosure) will be sent out. You need to view that CD right away to start the 3 day clock. You cannot sign paperwork for your house until that 3 day period has passed. Double check the numbers here and ask all the questions you want to ask now. This is also a great time to schedule your final walk through.

9-Settlement

Settlement is the act of signing the paperwork. You won’t get your keys at this time. You sign the paperwork, wire any additional funds and then wait.

10-Closing

Closing is when the purchase of your home actually records. This means that the paperwork is submitted to the city and the house is actually yours. You can now get your keys and move in. Don’t forget to change all utilities into your name and congratulations on owning your new home!