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Here to Home Ownership in 9 Steps – Part One

Home ownership is the “Great American Dream” …it also happens to be one of life’s greatest stresses. However, if we pay attention to these simple 9 steps, we can maximize the “Dream” part while minimizing the “Stress” part of the process. Over the next series of articles, we will cover the necessary steps to buying a home.

1. Get Pre-Approved for a Mortgage with a Federally Licensed NMLS Mortgage Banker

The first thing you want to do is get pre-approved for a mortgage. The pre-approval process will give you an idea of if you can buy a home now, if not, how quickly or what you need to do to put yourself in a position to buy a home. The pre-approval process will give you an idea of the price range of home you qualify for. This will allow you to start your online shopping to see what will fit your family. Start by calling any federally licensed NMLS local mortgage banker.

2. Find a Realtor

Once you’ve been pre-approved, you will want to find a reputable realtor in your area. Try coming up with a referral from a number of sources. For example, one from your mortgage banker, one from a friend who you know bought or sold a home though their agent. This will provide some type of assurance of the competency of your agent. Your agent will be able to provide great insight as to the area’s you are looking into, school districts etc. that will be important to your home buying decision.

It should be noted, at this point, if you’ve done a good job picking a Realtor, and an NMLS licensed Mortgage Loan Officer, steps 3-10 have just become a lot easier.

3. Shop for a Home

This can be time consuming but fun. Based on your input, and the preapproval letter, your realtor will be able to narrow your search to a handful of homes for you to evaluate. Before shopping, make sure to have a list from the entire family of what is important and don’t forget to prioritize them. Is a big lot important to your son, but not to you because you have to mow it? Also, don’t overlook the functional items, like electrical outlets, closet space, and lighting.

4. Offer and Negotiate the terms of the purchase

If you’ve never negotiated for anything before, this can turn out to be the most stressful part of the process. Please be careful here, the negotiation should be about getting a better price of what you want to pay for a home you are buying, and not so much about what you can pay for the home you buy.
This is one place where a good realtor is invaluable to be able to determine what a good market price is for your home so that your offer is appropriately priced.

In the contract, you will be negotiating not only contract price, but also seller concessions, closing and possession date.

The sellers may make a counter offer and there may be some tweaking of the figures. After both sides agree, you will be expected to make and Earnest Money Deposit(EMD), which goes into escrow as your good faith gesture of intent to purchase the home.