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Step 1
Choose the city first, then the zip code, then the neighborhood. The zip code will dictate what insurance rates you pay, what schools your kids can go to and how well your home will hold its value.
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Step 2
Go to your bank or mortgage broker to obtain a pre-approval. Once you are pre-approved, ask for a pre-approval letter. This is important because most real estate agents will not show you a home without a pre-approval letter. This is also important because you may want to buy a home for $400,000 but, the Loan Officer may tell you that you only qualify for a $300,000 loan. If that is the case, either look for a $300,000 or less home or wait until you can afford what you want. Do not seek to find a way to qualify for a $400,000 home because you will find it and it will come back to haunt you.
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Step 3
Look for a real estate agent. Be loyal to one real estate agent, but don’t sign their exclusive agreement to only work with them because if you do and they mislead you or don’t give you good service, you can’t drop them and work with someone else. Do not choose the real estate agent that is selling the house for the owner as your agent.
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Step 4
Obtain a home inspection and a pest inspection. Do not let the real estate agent choose them.
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Step 5
Know that your lender will usually choose the Appraiser. It is in their best interest to get a good appraisal because they are lending money on the property. When the appraisal comes back, ask the loan officer to go over the appraisal with you. You need to know all the little secrets of the property. Often discrepancies are found between what the home owner or real estate agent told you and what the appraisal says.
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Step 6
Choose your own title company and bring someone with you to the closing who understands the documents. Title companies will explain in detail what your loan officer explained to you about the loan. They will also explain legal issues as it relates to the lien(s) on the property and your responsibility to pay.
