4th step to buying a home: searching & making an offer
- gotten your pre-approval,
- chosen the right lender and mortgage loan for you, and
- found a stellar real estate agent?
Good! Then it’s time to start house hunting. As a mortgage loan officer for the last 10 years, I certainly have a lot of knowledge in real estate, but still always refer to experienced realtors for this next step. Their knowledge of the housing market, along with expertise in real estate contracts, are the key to making the best selection of the property in which you could spend at least 5 years (but for some of you, potentially the rest of your life). I referred to Anita Trozzolo, a Kansas City realtor to give us some guidance for this next step.
Create a priority list
You are making perhaps the biggest purchase of your life, and you deserve to have that purchase fit both your wants and needs.
Your priority list should include the basics, such as:
- neighborhood and size
- number of bedrooms and bathrooms
- basement (finished or unfinished)
- a kitchen that comes with appliances
If you can’t get a home at your price with all the features you want, then what features are most important? Start prioritizing. For instance, would you trade fewer bedrooms for a finished basement? A longer commute for a larger home and lower cost?
What type of home best suits your needs?
You have several options when purchasing a home from a traditional single-family home, duplex, townhouse or condo. Each option has its pros and cons, depending on your wants and needs, so you need to decide which type of property is best for you. You can also save on the purchase price in any category by choosing a fixer-upper. Keep in mind, though, the amount of time and money involved to turn a fixer-upper into your dream home might be much more than you expected.
Regardless of your choice, it’s important to target your search. By using options such as general location and affordability, you can refine your search and focus on homes that offer the most desirable features. However, based on my experience with the hundreds of first time home buyers for whom I successfully found and negotiated their first home, it is imperative to nail down location first. The majority of buyers purchase homes from their choices in their most desired location.
Here are some more tips for your search:
- Make sure your realtor understands your wants and needs.
- Your agent must be patient, and show you as many homes as you would like to see. This is most likely the largest purchase of your life!
- Have your agent set you up on an automatic home search program. This is an efficient way to guide you in your search.
- Drive through neighborhoods on your off time to check out the area.
- Choose your favorites before submitting an offer, and tour as many times as you feel comfortable. Oh, and don’t forget to bring parents and friends. The more eyes the better!
Submit an offer, and most importantly understand the sales contract. Your agent will assist you with the following:
- To determine how much to offer, your realtor will show you a market analysis of all the recent sold properties comparable to the home or homes you’re interested in.
- Obtain all material defects known from the seller through the seller’s agent.
- Discuss types of insurance that is required.
- Counsel you on what price to offer the seller.
- Make sure closing costs are explained and negotiated.
- Make sure home warranty is explained and negotiated.
- Explain the sales contract and all other forms associated with the contract.
- Present your offer to the seller.
- Negotiate your offer and counteroffers.
- Set up inspections.
- Provide the contract to the lender and closing company.
- Stay in constant communication with the lender.
- Arrange and attend the closing.
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Jackie Ahumada is a mortgage loan officer with UMB Bank. She has more than 10 years experience in the mortgage industry and more than 18 years in management of customer service delivery and operations.