If you’re considering buying your first home, CONGRATULATIONS! It’s easy to want to view homes right away (that’s the FUN part!), but as with anything in life, buying a home takes a bit of preparation. Here are some simple tips to get you started on the path to homeownership:

1. Check your credit score. 
   1. If you need to improve your score, you can pay down credit cards. Stop using them two months prior to applying for a mortgage if necessary.
2. Save money, as there are several upfront expenses.
   1. Down payment (typically 3-20% of your purchase price)
   2. Earnest money (typically 1% of the purchase price)
   3. Inspection(s) 
   4. Appraisal
   5. Closing costs (2-3.5% of the purchase price). 
3. Get your documents in order that will verify your finances to the lender. 
   1. W-2s
   2. Bank statements
   3. Pay stubs
   4. Tax returns
4. Determine the type of loan you are planning to take on. 
   1. Conventional
   2. VA
   3. FHA
   4. You can take on a mortgage for as little as five years and as many as thirty. The interest rates tend to be higher on the longer mortgage loans. 
   5. Keep in mind, Private Mortgage Insurance is paid monthly if you put down anything less than 20%. 
5. Compare lenders to find the best rate and get a qualification letter. 
   1. Local lenders tend to be most familiar with the area and keep relationships personal. They stick to deadlines and have appraisers that are educated on the local market. 
6. Meet with a qualified real estate agent. 
   1. Share your hopes for your future home.
   2. Learn about the home buying process.
   3. Get set up on a personal search to keep track of the market. 
   4. The agent’s commission comes from the seller. 
7. Sign a Buyer Brokerage Agreement. 
   1. This agreement protects both parties during the transaction.
8. Look at properties with your chosen agent. 
   1. The average buyer looks at 5-7 properties before making a decision. 
9. Write an offer to present to sellers. There are a few main terms to agree upon.
   1. Sales Price
   2. Closing Costs
   3. Closing Date
   4. Timelines
10. Negotiate the terms. 
    1. The sellers are likely to come back with a change for the contract. 
11.  Under Contract
    1. The sellers have agreed to the terms and the home is no longer available to other buyers. 
    2. Earnest money is due within 3-5 days of the binding agreement date. This money is deposited and held in an escrow account until closing day. 
12. Due Diligence Period
    1. This period begins the day after going under contract.
    2. This is typically 7-10 days. 
    3. All inspections are completed during this time and all repairs are negotiated. 
    4. This is the one time during the transaction where the buyer can terminate the contract for any reason and get the earnest money back. 
13. Financial and Appraisal Contingency Period
    1. This is typically 18-21 days. 
    2. The lender is making sure the loan is officially approved. 
14. Closing
    1. This always takes place Monday through Friday, in an attorney’s office.
15. Possess Home 
    1. Typically, the buyer leaves the closing with the new keys in hand! 

If you are thinking of purchasing your first home, The Peters Company would love to assist with this exciting process. Last year we had the pleasure of helping 235 individuals and families buy and sell. Give us a call at  678-921-1470. 

Written by Claire Conarro