Everything you need to know about buying a home, but are too afraid to ask
So you’ve decided it’s time to take the leap and purchase a home, but where do you start?
Have these items ready when meeting with a lender to get pre-qualified:
- • Photo Id and Social Security Validation
- • Current YTD Paystubs (30 Days)
- • W-2’s & Complete Tax Returns (Past 2 Years)
- • Bank Statements (Most Current 2 Months)
- • Divorce Decree, Child Support or Bankruptcy Info (if applicable)
- • Verification of employment
- **additional information may be requested as needed**
Figure out what you can afford: The first step to the home buying process is determining not only what you can qualify for, but determining a price point you are comfortable with. I highly recommend working with a local lender who understands our market and will help walk you through the process. There are a variety of loan programs, some as low as $0 down. Talking with a lender will help you figure out the best option for you.
Pick your Realtor: A Realtor will guide you through the home buying process to help coordinate all the moving parts and advise you along the way. I always recommend interviewing a few Realtors to determine who is the best fit for you and your needs. Once you decide to hire a Realtor you will sign a buyer’s agency agreement allowing them to represent you and determining how they will be paid. A buyer’s Realtor is typically paid by the seller of the home purchased at closing.
Start shopping: I recommend having your Realtor set you up with automatic updates from the MLS to be notified as soon as a new property hits the market to ensure you won’t miss a thing. Seeing all the homes on the market that fit your parameters will help you to get current with what is on the market and identify your likes and dislikes. The majority of the homes listed for sale require 24 hours notice prior to a showing, so be sure to plan ahead.
Keep an open mind: The average home owner moves every 5-7 years. Within this in mind, remember the home you are shopping for today does not need to be your dream home. One of the wisest purchase decisions you can make in our valley is breaking into the market at a price point you’re comfortable with and paying down your mortgage. By doing this, when you decide upgrade you will have a down payment ready to purchase your next home instead of paying thousands of dollars in rent and not getting any of it back.
Submit an offer: Once you have found a home, your agent will prepare an offer detailing everything from purchase price, deadlines, inclusions, contingencies, and more. When you submit the offer you need to have earnest money ready to be deposited if your offer is accepted. Earnest money is typically 1-2% of the purchase price and will be applied towards your down payment at closing. It is strongly recommended to attach a pre-qualification letter from your lender with the offer to verify you are qualified to purchase the home at the price offered.
Almost to the closing table: Once the offer is accepted you will have a few weeks to complete your due diligence and determine if you want to complete your purchase of the home. Most buyers choose to have an inspection completed early in the escrow period (typically between $300-$500) to determine any possible red flags with the home. Your lender will order an appraisal, which is typically required to verify the purchase price and insure the loan, and those typically cost between $500-$800 and are also paid for by the buyer. Once you have completed inspection and appraisal your agent will negotiate as needed and it is on to the closing table.
The home buying process can feel daunting, but with a great team by your side, and an open mind it can be an exciting and rewarding process.
Alisha Riddile is a Broker Associate with Roaring Fork Sotheby’s International Realty in Glenwood Springs. Alisha services Western Garfield County and the lower Roaring Fork Valley. She can be reached at 970-444-2BUY, Alisha.Riddile@SIR.com or http://www.bestcoloradorealestate.com
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