When you are buying a home for the first time, the process can be confusing. All the new terminology can be overwhelming. Let this list empower you to take the next step!
1. Buyer – You decide how much to spend, type of home, location, and features. Most listings have a mortgage calculator so you can understand payments, but are usually calculated at 20% down. Get pre-approved through a lender. This signals that you are seriously shopping for a home and what price range.
2. Real Estate Agent – An agent will guide you through the buying process. They can help you understand the financing, home inspections, and keep the process moving. The agent will compare prices on houses in the area that are similar to advise you better. They can help you prioritize so you can buy the home that is best for you and negotiate the price.
3. Bank or mortgage broker – You can finance your dream home through a bank, credit union, or mortgage broker. Sometimes your bank will be the best choice. Because credit unions are non-profit organizations and owned by their membership, they tend to have easier approval and lower mortgage rates. On the other hand, mortgage brokers are not tied to a particular bank or single product. They price shop for you.
4. Real Estate Appraiser – An appraisal will be ordered by the lender to determine the market value of the home. This will happen after you have the home under contract. The appraisal assures the bank that the property is valued for as much as you borrow. Lower appraisal amounts can delay or cancel transactions.
5. Title Company – They search the historical records for sales, purchases, and liens on the property. Make sure you don’t skip paying for title insurance; it protects you from claims of ownership by other people.
6. Licensed Professional Home Inspector – Inspectors assess the home for problems with structure, mechanical, plumbing, and electrical safety and durability. Some repairs can cost thousands of dollars. Inspectors can save you money and give you confidence and peace of mind.
7. Homeowner’s Insurance – Even if you pay cash for a home, buy the insurance. Things can go wrong, such as severe weather events, on all homes. Homeowner’s insurance protects your investment.