Maryland First Time Home Buyers
1 – Determine Your Buying Power – Before you set out to buy a home, it is important to figure out what you can afford to buy. The most efficient way to do this is to contact a reputable lender. This entire process can be done right over the phone, and can take as little as 10-20 minutes. The lender will ask questions about your income, assets, liabilities and credit worthiness. Your lender will be able to provide you with a good faith estimate that will show you what you can expect including monthly payments, closing costs and interest rates. When making an offer on a home, the seller will likely want to see a pre-approval or lender letter. To obtain a pre-approval, the lender will have you complete an application and ask to see some of your financial documents (see mortgage checklist ).
2 – Articulate Your Needs and Wants – Whether you are buying a home on your own or with a partner, figuring out the basics of what you really need in your new home can save you a lot of time and energy. Decide on locations, proximity to work, transportation, parking, bedrooms, bathrooms, neighborhood types, housing types and styles, and amenities. Putting it down on paper makes it easy to convey to your agent. Which brings us to.
3 – Select an Agent – Buying a home is probably the largest investment you will ever make. That’s why it makes sense to work with an agent who represents you and can help you through these 10 steps. The Internet makes is easier than ever to find out which properties are available so searching for an agent should be about finding someone who will work well with you to decipher all the available information and negotiate for the best price and terms for you. Contact our Featured Agent to Get Started.
4 – Step Out Into the Community – If you are unfamiliar with an area, use your active listings as a guide and drive by the the properties to see if you like what you see. Visit at different times: weekends, evenings, and rush hour. See if the area seems like a neighborhood you could call home.
5 – Visit Homes With Your Agent – Having a second person with you when looking at homes is always good, but having the opinion of a critical agent is even better. Expecially when you fall in love with a home, it helps to have someone there who can point out the things that may affect your decision. Such as: how it compares to other homes in the neighborghood, how it may appreciate, and its resale value.
6 – Make an Offer – Once you have found a home you like, it is important to gather as much information as you can about the home so you can develop your offer. Your offer will include a sales contract and several disclosures and addenda as required by your state and county. Your agent will help you develop a bidding strategy and understand the language of your offer. There are several protections (contingencies), some included and some which must be added to the offer. You will also need to provide an earnest money deposit and a copy of your pre-approval letter and you must sign the contract. If your offer is accepted. the seller will sign the contract and it will be ratified. If the sellers want to change your offer, they could provide you with a signed counter offer which may include one or many changes. The contract is not ratified until all the terms of the contract are agreed to in writing and delivered to the other party.
7 – Working Toward Under Contract – Once an offer has been accepted and ratified, there is alot of work to be done:
- Your lender will want you to complete your loan application and provide additional information.
- Your agent will help you with one or all of the following: home inspection, termite inspection, radon inspection, lead paint inspection, condo document review, and home owner association document review.
- Depending on your financing or insurance provider, you may have to set up additional inspections. The results of these inspections determine the next steps and your agent will guide you through your options and help you negotiate specific details.
- Once all the contingencies are removed, your home will be listed as under contract.
- While that is happening, your lender will want to appraise the home to be sure it is worth what you’ve offered and,
- the Settlement Company will order a survey to be sure that you know the property’s boundaries and to be sure all neighbors have their fences, structures, or walls on their own property.
8 – Final Walk-Through – Just before settlement, your agent will take you on a final walk-through of the property to be sure that the sellers are conveying it to you in substantailly the same condition an on the day you made your offer. You certainly want to be sure that you are not buying a home that has standing water in the basement or one in which a tree has fallen, but you also want to be sure that any repairs identifed and agreed upon as part of the home inpection have been completed. If things have been damaged during the seller’s move out, compensation can be handled at settlement.
9 – Settlement – Closing usually lasts about an hour. Before you go to the settlement table, you should have reviewed your HUD-1 settlement sheet with your agent. It identifies all of your closing costs and tells you how much you will need to bring to the settlement. Compare it to the good faith estimate you received from your lender to be sure it is correct. Be sure to bring a cashiers or certified check for the amount identified. You will also need to bring a photo ID to settlement so your idenity can be verified. Once you and the seller sign the deed and you sign a stack of loan papers, the seller will give you the keys to your new home.
10 – Moving – Moving is always a little exciting, but moving into your OWN HOME creates all kinds of benefits. Each time you pay your monthly mortgage payment you may not see the savings, but at tax time you will see how much you’ve saved. As time goes on, you will also see how the price of your home increases, earning you equity that will be yours when you decide to sell or refinance your home.
If you are ready to begin the home buying process, Contact Us.