Here you are! You finally made it to this very momentous part of life…BUYING A HOME! This process is extremely exciting, but can also be a little(or a lot) overwhelming. So, here are a handful of tips to help guide you along the way:
- Find your main man/woman-Your realtor is the key to helping you through all the highs and lows of the home buying process. Build up that relationship. We want to know all the things there is to know about you, especially what you need in a home, what you want, and the budget.
- Find your lender- “Listen Linda…Listen” Get preapproved! Your lender is also essential to having the best experience you can have! They will help you navigate what budget best suits your needs and what price will keep you from being “house broke”.
- Begin your search- Where the real fun begins! Don’t look above your budget….you’ll be disappointed. Here is a good rule of thumb I came across: 30/30/3 rule “You should be spending no more than 30% of your gross income on a monthly mortgage payment, have at least 30% of the home’s value saved up in cash or semi-liquid assets, and buy a home valued at no more than three times your annual household gross income.” That’s a great guideline to go by, however, there are some lenders who offer 100% financing, meaning no down payment.
- Go-Look-Offer- Have your preapproval letter ready from your lender, and try to have 1% earnest money in your checking account.
- If you price it right, they will come(field of dreams…dream home lol you see what I did there)- Multiple offers are still in play. If the location, condition, and price are positioned right in today’s market, you will still see multiple offers to compete with as a buyer. In that situation, you definitely want to make sure your realtor is knowledgeable about: A)Escalation Clauses B) Contingencies such as inspections and appraisals C) Earnest Money D) Ask what’s important to the seller.
- YOU FOUND IT- Congratulations! You found the dream home, and the sellers accepted your offer. Now what?! So begins the financial and inspections contingencies timeframe. Alabama is a BUYER BEWARE state, so it’s up to us to find out what exactly(if anything) is wrong and in need of repair.
- Is it worth it?- You’ve gotten through the inspections, and you’re waiting on the bank’s appraisal to come in. Typically speaking, there are three things that can happen with the appraisal: 1) The value comes in right on the money, and is the same as the purchase price on the contract. 2) The value comes in below the agreed upon purchase price. Well, this is when the buyer and seller have to come to an agreement on either lowering the price or moving forward with the buyer making up the difference in the appraised value vs. the purchase price. Or they can choose to not move forward. 3) The value comes in above the agreed upon purchase price….FANTASTIC you just made a great deal as a buyer!
- CLOSING TIME- Go sign and get your keys!
- Teamwork makes the dreamwork- Working with a team of real estate professionals is extremely beneficial and it doesn’t cost you any extra! Here at Angela Grisham & Associates, we are a family. So, if your agent is out of town and there’s a new house on the market, don’t worry, one of our other incredible agents can show it to you.
Now you get to move in to your gorgeous DREAM HOME!! Hope this helps with a little bit of the home buying process. Don’t hesitate to reach out to any of us! We are here to help.
~Linsey Hood