Understanding and planning are critical elements in simplifying the process of home buying. By planning, you can anticipate requests from lenders, attorneys, and a variety of professionals, and find valuable shortcuts in the home-buying process. Here, we’ll walk you through 9 steps. This includes finding the right REALTOR® in Central Pennsylvania, making an offer, and closing the deal.
9 Steps to Buying a Home
Step 1: Partner with a Realtor®
The first step in home buying is to find an experienced REALTOR®. Buying and selling real estate can be complex. While it might seem easy to find the right home at the right price by checking local picture books or online sites. However, it’s a different story when you delve into the intricacies of forms, financing, inspections, and negotiating. Century 21 Realty Services, as your local REALTOR® , can navigate these complexities with ease. Our REALTORS® are well-versed with the Central Pennsylvania community and beyond, providing you with the expert guidance you need.
Step 2: Secure Loan Pre-approval
As you move forward with home buying, getting preapproved for a loan is crucial. “Preapproval” means you have met with a loan officer, your credit files have been reviewed and the loan officer believes you can readily qualify for a given loan amount with one or more specific mortgage programs. Based on this information, the lender will provide a preapproval letter, which shows your borrowing power. You can visit as many lenders as you like and get several preapprovals. However, keep in mind that each one carries with it a new credit check, which will show up on future credit reports.
Real estate financing is available from numerous sources, including lenders in the finance section of Homestore.com, mortgage companies that have worked with local REALTORS® and in some cases, individual REALTORS® themselves. Based on his or her experience, your REALTOR® can provide suggestions for local lenders with a history of competitive programs and reliable rates. One of our top lending partners is Rob Frey who handles many clients of ours.
Step 3: Shop Homes in Central Pennsylvania
Choosing a home goes beyond assessing bedrooms and bathrooms. Many factors play into the decision, such as pricing, location, size, amenities, and design. During your home buying journey, Century 21 Realty Services can help you prioritize your needs and envision your future requirements.
Each of us is different and so it’s important to list the features and benefits you want in a home. Consider such things as pricing, location, size, amenities (extras such as a pool or extra-large kitchen), and design (one floor or two, colonial or modern, etc.).
Next, it’s important to consider your priorities. If you can’t get a home at your price with all the features you want, then what features are most important? For instance, would you trade fewer bedrooms for a larger kitchen? A longer commute for a bigger lot and lower cost?
Lastly, consider your needs in several years. If you’ll need a larger home, maybe now is the time to buy a bigger house rather than moving or expanding in the future.
Step 4: Choosing Your Dream Home
As a buyer, here’s what actually happens. A home has been placed on the market for which the seller has established an asking price as well as other terms. In effect, this is an offer. At this point, you have three choices: accept the seller’s offer and create a contract; reject it and not make an offer; or suggest different terms and make a counteroffer. If you choose this last option, the seller may accept, reject or make a counter-offer.
No aspect of the home buying process is more complex, personal, or variable than bargaining between buyers and sellers. This is where Century 21 Realty Services shines, with our experienced REALTORS® negotiating the best deal for you in the Central Pennsylvania real estate market.
Step 5: Obtain Financing
Understanding mortgage options and costs is crucial in the home buying process. Century 21 Realty Services, with our network of trusted partners, can guide you through thousands of loan options available to you.
There are thousands of loans available out there from a variety of lenders. However, in general, the mortgage you choose will likely be determined by at least several key factors:
- How much down payment?
- How’s your credit?
- Are you a first-time buyer?
To obtain a loan you must complete a written loan application and provide supporting documentation. Specific documents include recent pay stubs, rental checks, and tax returns for the past two or three years if you are self-employed. During the prequalification procedure, the loan officer will describe the type of paperwork required.
Step 6: Make an Offer
Making an offer in the home buying process involves more than just the price; it also considers terms and conditions. Our expert REALTORS® at Century 21 Realty Services can guide you through making the best offer based on the current Central Pennsylvania real estate market.
How much do you offer?
You sometimes hear that the amount of your offer should be X percent below the seller’s asking price or Y percent less than you’re really willing to pay. In practice, the offer depends on the basic laws of supply and demand. If many buyers are competing for homes, then sellers will likely get full-price offers and sometimes even more. If demand is weak, then offers below the asking price may be in order. Your REALTOR® can help you understand the unique market situation and make the best offer possible.
How do you make an offer?
In a typical situation, you will complete an offer that the REALTOR® will present to the owner and the owner’s representative. The owner, in turn, may accept the offer, reject it or make a counter-offer.
Because counter-offers are common (any change in an offer can be considered a “counter-offer”), it’s important for buyers to remain in close contact with REALTORS® during the negotiation process so that any proposed changes can be quickly reviewed.
How many inspections?
A number of inspections are common in residential realty transactions. They include checks for termites, surveys to determine boundaries, appraisals to determine the value for lenders, title reviews, and structural inspections.
Step 7: Secure Insurance
Home insurance is vital to protect your asset against unforeseen circumstances. Our REALTORS® at Century 21 Realty Services can guide you through the various forms of real estate insurance associated with home buying ensuring your new home is fully protected.
There are various forms of insurance associated with home ownership, including these major types:
A one-time purchase at closing, title insurance protects owners in the event that title to the property is found to be invalid. We normally use Purity Abstract Company as our trusted partner.
Homeowners’ insurance provides fire, theft, and liability coverage.
Generally required in high-risk flood-prone areas, this insurance is issued by the federal government and provides as much as $250,000 in coverage for a single-family home plus $100,000 for contents.
Home warranties With new homes, buyers want assurance that if something goes wrong after completion the builder will be there to make repairs.
Home warranties for existing homes are typically one-year service agreements the seller purchases. In the event of a covered defect or breakdown, the warranty firm will step in and make the repair or cover its cost
Step 8: The Closing Process
The closing process can be complex. With a Century 21 REALTOR®, you can rest assured that all necessary paperwork will be handled with precision and professionalism. The closing process, which can be known as “settlement” or “escrow,” is increasingly computerized and automated. In many cases, buyers and sellers don’t need to attend a specific event. Paperwork can be sent to the closing agent via overnight delivery.
What to expect?
Settlement is a brief process where all of the necessary paperwork needed to complete the transaction is signed. Closing is typically held in an office setting, sometimes with both buyer and seller at the same table, sometimes with each party completing their papers separately.
What do you need to do?
Before closing, buyers typically have a final opportunity to walk through the property to assure that its condition has not materially changed since the sale agreement was signed. At closing itself, all papers have been prepared by closing agents, title companies, lenders, and lawyers.
This paperwork reflects the sale agreement and allows all parties to the transaction to verify their interests. For instance, buyers get the title to the property, lenders have their loans recorded in the public records and state governments collect their transfer taxes
Step 9: The Move
Now that the home buying process is complete, it’s time to move into your new home! While it is understood that the sellers will leave the home “broom clean.” This expression does not mean “vacuumed” or “spotless.” Broom cleaning makes sense because it means the house is ready to be painted and cleaned. You can now make the home your own!
Your home, your money.
A home is usually the most significant single asset people possess. Hence, it’s crucial to protect and enjoy it. Despite the legalities, contracts, loans, and taxes associated with home buying, homeownership should be a joyful experience. Especially in the vibrant and beautiful region of Central Pennsylvania. With Century 21 Realty Services as your realtor, we will ensure your journey in home buying is as smooth as possible. Enjoy your new home!
P.S. If you are in need of a deeper dive into the home buying process read our article on Understanding the Process which covers more details regarding mortgages, pre-approval, and making an offer.