So, you want to know how to buy a house? Pretty simple here in Eastern NC. A VERY abbreviated set of steps, of course, every person’s situation will vary slightly-or greatly, no two real estate transactions are exactly the same, sort of like a snowflake.
1. Find a great real estate agent, present company included! 🙂 When buying a home, in MOST cases someone working in the capacity of a “Buyer’s Agent” is actually free to the buyers, the seller paying a listing fee for their home which, again, in most cases, is the commission for both agents.
2. Determine if buying a home is really the right move for you. Generally you see a nice return in an average market in about 2 years, so, will you be in the area for the next two years or more? Most PCS orders are for longer, the USMC in particular being fond of “homesteading” and allowing military families to be stationed at a base for three years or much longer, saving the cost of relocation.
3. First prequalify then preapprove for a loan. This is a very important step because it lets you know if you can actually get a mortgage for a home, if your credit score is strong enough and what interest rate you would qualify for. . . AND how much will your piece of the American Dream cost you each month. What is your buying power, exactly? Well, only one way to find out, apply for a mortgage. Do a little shopping once you get a quote, I’m not talking 30 places, but certainly a total of two or three. . .compare apples to apples. . .what are the various fees? Closing costs? If you don’t qualify, find out WHY. . .sometimes small credit issues can be cleared up in a matter of weeks or months and it is worth pursuing your dream of home-ownership. . .and repairing your credit is imperative no matter what type of loan you want. . .home, car, or credit cards.
4. Go hunting. Looking for the house is my favorite part. You should have a “wish list”. . .within your price range, what are you most wanting in a home? Is school district very important to you and your family? Does a walk-in closet make your heart skip a beat? Is a laundry room in the garage instead of on the second floor a deal breaker for you? Make sure your eyes aren’t bigger than your appetite. Do some research, make sure what you really want is reasonable within your budget, otherwise your hunt will only frustrate you.
5. Make an offer. Here in the Jacksonville area, it is pretty well known that you can probably BUY a place for less than you can RENT it! GENERALLY speaking, under the 200,000 price range, a $500 EMD check (earnest money deposit), is all you need to get rolling on a home! The check is submitted with your offer to purchase (contract), I prefer to include a pre-approval letter from your lender also. If your offer is accepted by the seller or builder, the check is deposited and held in escrow (an interest bearing account, usually by the listing firm) until the deal closes at which point the money is credited back to you –usually as a credit towards your closing costs. . .which MAY be covered in their majority by the seller or the builder. . .which often happens here, the market supports seller concessions. So, there you have it, rather than first month’s rent, security deposit, pet deposit, pet rent, etc. . .you could own a home and enjoy the tax benefits of having a nest egg as well as earning equity as the value of your home gradually increases.
6. Close the deal. In our area, generally a month long process. New Construction Homes seem to average about 120 days to complete (weather and permits permitting). Closing takes place in a local attorney’s office, there are lots in the area that handle real estate law. Sometimes the sellers attend, but not always, sometimes their agent will attend for them if they are already en route to their new home. The attorney ensures all proper loan, deed, title paperwork is completed and signed, records the deed at the courthouse . . .you may or may not owe closing costs. . .depending on the house, your mortgage and what was negotiated. . .and finally, you own a home!
Sure, this is a VERY simplistic version of events. But, as a general overview, not as scary as it sounds. . . and compared to what you may be reading online or hearing on the news, this market is VERY stable. . .we didn’t experience the exciting and record breaking house prices other areas did, but we aren’t seeing the lows either. This is a military community with military paychecks. . .if you have been on the fence about home-ownership, this is a great community to get your toes in the water!
If you have more questions or want to find out what you need to do to start looking for a home, contact me. I would love the opportunity to earn your business.