First Time Homebuyer's Guide
Hometown America professionals understand that buying a home is one of the most
important personal and financial decisions that you will make in your life. This
is why we are committed to guiding you step-by-step,
answering all your questions along the way, to ensure that your experience is as
pleasant and successful as possible. In the following you will find
information that will help you to better understand the real estate process. This summary is intended as a general overview of a typical home purchase, and
to identify the typical procedures followed. Read on and you'll see that
realizing your dream of having your own home is easier than what you perhaps
Information is Essential
Now that you've decided to investigate home ownership, the best way to approach
your purchase is as an educated consumer. It is very important to educate
yourself on the process and requirements before you begin looking for a home. For example, many people believe that renting is cheaper than buying, or that
you have to be a permanent resident of the United States or have an exorbitant
down payment to buy a house. The reality is that you only need a work permit,
and in some cases, the starter costs of renting may almost be the same as that
of a down payment for a house. Stay informed by talking with people who have
already gone through the process, by attending home-buying seminars, or by
one of our agents.
Choosing to buy a home is one of the most important decisions of your life and
should not be taken lightly. That's why it is in your best interest to associate
yourself with a good real estate agent who has experience, who works in the area
where you would like to live, and with whom you feel comfortable. If you choose
a Hometown America agent, rest assured that you will be dealing with a true
professional who will provide you personalized service and answer any questions
or concerns you may have.
It is important to develop a financial plan so that you not only save money for
the down payment, but for other costs that will come along later like the credit
check, the mortgage application and the closing.
Having an established credit history is an important step in a smooth home
buying process. Build a good credit history by trying to diversify how you pay
for things and don't pay for everything in cash. Pay your bills on time, limit
your debt, reduce the amount of credit cards you have and use them responsibly. It is also important to review your credit report - a record of past and current
debt that states when, how and if you paid. Make sure that the information
contained in your credit report is accurate. You will have the opportunity to
correct any errors. A Hometown America agent can provide you with assistance
in securing a copy of your credit report for review.
A pre-approval is a simple calculation that tells you the amount you'll be able
to finance through a loan and what your monthly payment will be. A pre-approval
also provides the "seller" some comfort that you have the financial means to
purchase their home.
A down payment is generally the money you pay up front toward your new home.
Typically, the more cash you pay as a down payment, the less you will have to
pay each month on the mortgage, and the lower the interest costs will be over
the life of the mortgage. Many people make a down payment of 5, 10 or 20% of the
sales price of the home, but the right percentage for you depends on many
factors. There also are certain loans available for down payments of under 5%. One thing that is certain is that saving the money for the down payment can be a
challenge. This is why there are so many mortgage options available and
your Hometown America professional is a good resource to help you choose the one
that best corresponds to your personal situation.
The types of home financing options available to you toward the attainment of
your new home are varied, depending on your personal financial situation and
unique needs. The best resource available to you in determining your financing
option is your Hometown America professional who can guide you through contacting a
financial lender and attaining a Mortgage Pre-approval, to help you in gauging
what you can afford to spend on a home and financing available to you. As a
general overview, here are some typical financing examples:
Closing and other additional costs
Closing is when ownership of your new home is officially transferred from the
seller to you. Sometimes sellers will pay closing costs. If not, you need to be
prepared to pay this additional cost, which can range to be an additional two to
five percent of the home purchase price. These costs can vary from state to
state. Your agent can assist you, and guide you in this step
towards achieving your homeownership dream.
Securing your dream home
Narrowing your home search down with knowledge about how much you can afford to
spend is only one factor to consider. Having an idea of what specific features
you want versus need in your new home, can also help your Hometown America professional in guiding you through the process to a successful and happy
outcome. With this information in hand, your agent can give
you information on houses for sale and will take you to see those that interest
you. Your agent will discuss with you the pros and cons of
each house. Don't be afraid to ask all the questions you want. Remember that one
of these houses could be your future home.
When you find your perfect home you will need to make the seller an offer in writing. Your offer is often the first step toward negotiating a sales contract with the seller and is much more complicated than simply determining a price. Because of the large amount of money involved, both the buyer and the seller should protect their investments and limit their risk. Therefore, when you make an offer, typically you not only specify the price you are willing to pay, but also the details of the purchase such as:
Before making an offer, thoroughly evaluate the property (including but not limited to the following):
Once you have submitted your offer, you must await the response of the seller. The seller could accept, reject or ponder your offer. Often, the seller will
counter your offer with higher amount. This begins the process of price
negotiation that may continue until both parties either agree on a price or
decide to go their separate ways.
Along with your offer you must provide the amount of your "good faith" deposit
that is designed to, among other things, demonstrate to the seller the
seriousness of your offer. This is one of the additional costs mentioned
earlier. This money is only deposited once the offer has been negotiated and
accepted by both parties.
When there is a serious interest in a property and an offer has been made, an inspection is often ordered. The seller should have the property available for inspection by a professional. In a typical inspection, experts examine the existing conditions of the property. Inspections may be required by law, but the elements of an inspection may vary according to region and state and/or your agreement. The most common type of inspection is the General Home Inspection. A home inspector can provide you with a complete service, which may cover many areas of the home - from the basement to the attic, as well as the exterior of the home, walls, chimneys, and fixed appliances such as refrigerators and stoves. Other specific elements that can be included in an inspection are the following (this is not a complete list):
Before a mortgage company will approve your lending arrangement and allow you to
close on your new home, they will typically ask you to show proof of title,
title insurance, and homeowner's insurance. Your Hometown America professional or
your mortgage representative can help explain the details, and your real estate
attorney can provide counsel on title issues and title insurance.
Before the closing takes place and the property is transferred, your agent may visit your future house with your family. The "walk-through"
provides a valuable opportunity to ensure that the house has been left in the
Ask your Hometown America professional and your attorney to go over the elements of
the "closing" so that you can be fully prepared. The closing process varies
according to the area of the country (and can even vary within the same state).
Finding your new home can be a rewarding experience, especially when you have a
real estate professional at your side, working and negotiating on your behalf,
and guiding you throughout the real estate process. We know that you're looking
for more than just a roof over your head. You're looking for a home to express
your lifestyle and values, a place to spend time with family and friends, a
place to retreat at the end of the day and Hometown America professionals can help
you achieve those dreams. Although the real estate process can be complex,
our agents want to share their knowledge, experience and patience
with you in achieving those goals.
None of the advice or suggestions offered in this summary is intended to be
representative of any or all of the circumstances you may encounter in
attempting to obtain a mortgage or to buy a home. Y ou should consult an attorney
and a mortgage broker, both of whom can provide you with information specific to