Monday, September 23, 2013
How to buy a home: steps for the first time home buyer
If you are thinking about buying a home for the first time, you may be a little baffled about where to start. That's understandable. The process can be more than a little intimidating. Obviously, being a real estate agent in Fountain Hills, AZ, my first piece of advice would be to enlist the help of a real estate agent. If your budget is tight, don't worry because your buyer's agent is paid through commission when you eventually purchase a home, so their services are free to you!
Besides getting a real estate agent, here are the steps I recommend you follow when buying your first home:
1. Figure out what you can afford.
Common wisdom is that your mortgage payment shouldn't exceed 25% of your annual income. Start by calculating this figure and compare it to your current rent payment. If 25% is more than what you currently pay, it can be wise to spend 6 months saving the difference between your rent payment and your potential mortgage payment to see how you do. From there, you can adjust accordingly. Once you know the mortgage payment you can afford comfortably, then you can factor in current mortgage rates and how much you have saved for a down payment and closing costs to get a general idea of the price of the home you can afford. There are several good online calculators available for this. I recommend the one at CNN Money.
2. Shop around to get pre-approved for a home loan.
In today's financial environment, it is very important to get a lender pre approval letter before you start making offers. You can begin this research on the internet. Most banks post their current interest rates online. There are even sites like BankRate.com and LendingTree.com that will bring up rates for several lenders at once. Once you have it narrowed down to a few lenders, you can go ahead and apply for approval with them to see who actually gives you the best rate and closing cost combination. Most financial institutions have friendly agents that are happy to walk you through this process. If the research stage of loan shopping seems too overwhelming, another option is to look for a local mortgage broker that can do the footwork for you.
3. Determine Where You Want to Live
When you start shopping for homes, it can be easy to get caught up in the luxuries of a nice home that's in a bad neighborhood. Remember community contributes just as much to quality of life as the home itself - and I would argue MORE then the house itself! If you haven't nailed down exactly what community you want to live in, (perhaps you are looking at a large metropolitan area like Phoenix), you need to spend some time really considering this. Think about distance from your employer, the quality of school districts, crime rates and traffic congestion in the areas you are considering. Fountain Hills is a just a quick 25 minute drive from major employers in Scottsdale, Mesa and Tempe and we boast low crime rates and quality school districts. We also have a sense of community here that just can’t be found anywhere else in the valley.
You might also consider outdoor recreation, entertainment, places of worship and community events. In Fountain Hills, we have the several outdoor festivals throughout the year that bring the community together – not to mention our famous annual Thanksgiving Day parade. We also have quick access to hiking in the McDowell preserve, mountain biking in McDowell Mountain Regional Park, boating on Saguaro Lake, and cool weather camping just an hour north near Payson.
Think about what you need quick access to, and what you are willing to drive for. After narrowing down your search to a particular community, this is a great time to contact a Realtor that specializes in that area if you haven't already done so.
4. Determine What You Need in a Home
This is where you make your needs/wants list. Number of rooms, parking, yard space, square footage, kitchen space are probably the most vital things on this list. You might also consider how move in ready the place needs to be (do you need to move quickly or do you have the time/funds to fix up the home before you move?). Here in Arizona, a pool is often a requirement. Style, fixtures and flooring are also considerations, especially if you aren't planning on doing any major remodels. Fountain Hills has homes built in every decade since the 70’s, so you will encounter a wide range of architectural and interior design styles during your home search here. Couples, get ready to put on your negotiating hats! Once you have your needs/wants list, share it with your Realtor so they can research homes on the market that might meet your needs.
5. Visit Homes
Once your realtor has found some potential homes, it's time to start the touring process. It's often good to bring a notepad and a camera when checking out potential homes since it can sometimes be hard to remember one home from the next, especially if you are seeing more than one in one day. Make a list of the pluses and minuses of each home as you tour.
6. Start the negotiation process.
This is where you really need a Realtor that knows what they are doing. Negotiations can be tricky and can sometimes take several weeks or more, so work with your Realtor and don't buy the furniture until you actually have the keys! After a price has been agreed upon, make sure to have the house inspected. The contract is usually written so that the price can be re-negotiated or backed-out of if the home inspection reveals that significant repairs need to be made.
7. Move into your new home!
When all the negotiations are complete, it's time to sign a whole bunch of paperwork and load up the moving truck! You are now a homeowner!
If that process sounds a bit stressful, don't be overwhelmed. Home buying doesn't have to be stressful! For home buying success in our competitive Fountain Hills real estate market, use the services of an Accredited Buyer Representative! I have helped Arizona home buyers for over 30 years, and I'd like to help you too!
I will provide you with expert, professional representation throughout the home buying process. Contact me today for complete home buying help in Fountain Hills!