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Step 1: Needs Analysis
C
ongratulations
on your decision to purchase a new home. Your first step toward buying your new home will be to analyze your needs. By analyzing your needs you will be able to get a clear picture of exactly what you want your new home to look like and how it should function for you.

First, you should write down why you are looking for a new home.

Second, establish a time frame that you would like to stay within for buying your home.

Last, you most likely have a mental picture of what you would like your house to look like and what features it should have. It's very important to write these ideas down to avoid any ambiguity later in your home search. You should make at least two lists: one should be a list describing your dream home and the other should list the features of the home that are an absolute must have in order to buy it. In a perfect world, your new home would fulfill both lists 100 percent. It is more likely that you will end up blending the two lists into a schedule of prioritized items as you progress through the buying process.

Step 2: Pre-approval vs. Pre-qualification
You are going to need to know in what price range to look. There are two ways to go about this. You can get pre-qualified or pre-approved for a mortgage. Either way you will need to contact a mortgage company.

Loan pre-qualification is a simple process. It takes into account very basic information regarding your financial status and gives you an amount for which you may qualify. This can be done strictly on a verbal level or electronically over the Internet (not recommended). The type of mortgage you apply for will depend on many factors, but the majority of that decision will be based on your ability to pay a monthly installment.

Pre-approval is a much more involved process. The lender will take all pertinent information regarding your finances and perform an extensive check on your current financial status. This will ultimately give you the exact amount that you will be eligible for (depending on what type of loan you decide to go with). Being pre-approved lets the seller know that you have gone through an extensive financial background check and there should be no unexpected obstacles to buying the home. You can see how being pre-approved would be more attractive to a seller than just being pre-qualified.

Step 3: Neighborhood Information
People don't just buy a house; they buy the neighborhood the house is in. Think about that...if you found the perfect house but it was in a neighborhood that was not to your liking, would you make an offer on it? Most likely the answer would be, "No.  So, you will need to make another list of what type of neighborhood you want to live in. You will most likely want to consider things like how living in the neighborhood will effect your drive time to and from work, what amenities are offered (swimming pool, tennis courts, park, etc.), and, if you have children who are attending school or soon will be, what school district you will be in and how close the schools are. You may even want to make two lists just like you did with your home criteria. . If you don't know much about the city that you are moving to you will most likely want to start your search by finding neighborhoods that meet your criteria and then narrowing your search to particular homes in the area.

Step 4: Home Search
Find an agent.  
Find one that is will & able to work with you & meets your time frame & works in the areas & price range that you are looking to purchase in.  Find one that represents you.

Your agent can save you time and money by keeping up-to-date on available properties that possibly meet your criteria and your agent will screen these properties for you. You can eliminate the haphazard searching through papers and the Internet and let the listings come to you through your agent. Then, when you find one that you like, your agent can arrange for you to walk through the property when it is convenient for you.

Step 5 Making an Offer:
Now
that you have found the home you would like to purchase, it's time to make an offer. Taking into account the recent sales of homes in that neighborhood which are similar in size, quality, conveniences, and amenities, what are you willing to pay for the home?

Make sure that you have everything down in written form... no verbal agreements. Present the seller with a written document detailing what needs to be done by both parties to execute the transaction. The contract should protect the best interests of all parties involved and should be comprehensive in nature. Once the seller accepts it, it may be too late to make any changes, so make sure review your offer thoroughly before submitting it. The contract, though not limited to this list, should include the following:

  • A legal description of the property
  • The offering price
  • The down payment
  • Financing arrangements
  • A list of fees and who will pay them
  • Amount of the deposit
  • Inspection rights and possible repair allowances
  • The method of conveying the title and who will handle the closing
  • A list of appliances and furnishings which will stay with the home
  • The settlement date
  • Any relevant contingencies

Remember that the legalities of this phase are very important. If you have any questions or concerns, they need to be addressed right away.

Step 6 Negotiating to Buy: Some of the things that you may have to negotiate on are:

  • The price
  • Financing
  • Closing costs
  • Repairs that need to be done
  • Appliances and fixtures
  • Landscaping
  • Painting
  • Occupancy time frame

The key to successful negotiating is keeping in mind that the end result must make you, the buyer, and the seller happy. Otherwise, negative feelings will persist throughout the remainder of the process and someone may walk away feeling that they were not treated fairly.

Step 7 Vendor Coordination:
After your offer has been accepted, the property will need a thorough examination. Working with your lender, you may need to have a formal appraisal and a survey done for the property designated in the contract. A property inspection (home, pest, lead, radon, water, septic, etc). Homeowner insurance is another very important item that will need to be taken care of at this point. Attorneys can either represent you or the lender jointly or separately.

Step 8 Pre-close Preparation:
As the closing date draws near you will need to be in contact with the escrow company or closing attorney and your lender to make sure that all the necessary documents are being prepared.

You should have all your documents into the lender & have received a clear commitment letter.  You can ask for a copy of the property appraisal for your review. You will also need to confirm that the documents will be delivered to the correct location so they can be reviewed and that they will be ready on the appropriate date. At this point, you should find out what form of payment you will need to bring to the closing for any unpaid fees. Make sure that your payment is made out to the appropriate party. This is the time to order all utilities to transfer or be activated for the day of closing & order your mortgage insurance binder. (At least a full week prior to closing). The day prior to the closing you should receive HUD-1 information on your closing information & the amount that you will need to bring to the closing in the form of a check. You should also have a walk through of property on the day of the closing.

Step 9 Closing:
C
losing
is where ownership of the home is legally transferred from the seller to the buyer. It is a formal meeting in which most parties involved in the buying/selling process will attend. Closing procedures are usually held at the title company's office or lawyer's office. Your closing officer coordinates the document signing and the collection and disbursement of funds. In order for the closing to go smoothly, each party involved should bring the necessary documentation and be prepared to pay any related fees (closing costs). There may be more than one form of acceptable payment for your closing costs so ask the closing officer which form of payment will be required and to whom it should be paid.

Sellers sometimes pay for a portion or all of the closing costs, depending on local market conditions, terms of the purchase contract, and the seller's cash and timing considerations. Any such concessions should be acknowledged in writing. Most lenders will allow a credit from the seller to the buyer for the non-recurring closing costs. However, they usually won't allow a credit that reduces the amount of the buyer's down payment or any of the buyer's recurring costs, such as expenses for fire insurance premiums, Private Mortgage Insurance (PMI), or property taxes.

Step 10 Post-Closing:
Congratulations
on the purchase of your new home! Now that you have taken ownership of the property you will need to have your local services such as electricity, cable, and phone set up. Also, you should already be aware of the expenses that are typically associated with owning a home. Neighborhood Association fees, landscaping costs, and annual taxes should be budgeted for throughout the year to keep from getting into a financial bind.

 


MHB Realty   Maureen H Brennan, Realtor/ Broker
MHB Realty
96 Assumption Ave • Worcester, MA 01606 Map it
Direct: 508-981-4761 • Cell: 508-981-4761 
Fax: 508-856-0977 
MaureenHBrennan@aol.com

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