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:

Title Insurance

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

Homeowners’ insurance provides fire, theft, and liability coverage.

Flood Insurance

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

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.

Purchasing a home is a major decision that requires careful planning and consideration. Purchasing a home is often the most significant financial investment a person will make in their lifetime. Avoiding any mistakes can save a buyer a lot of money and cause unnecessary stress.

In this article, we will cover tips on how to avoid five mistakes that buyers make when purchasing a home. If you’re looking to purchase a home in Central Pennsylvania, keep reading to ensure that you don’t make these common mistakes.

Mistake #1: Not getting pre-approved for a mortgage

One of the biggest mistakes that buyers make when purchasing a home is not getting pre-approved for a mortgage. Getting pre-approved for a mortgage is essential because it helps buyers understand what they can afford. Without pre-approval from a lender, you may waste time looking at homes outside of your budget. This can be a frustrating and disappointing experience. 

In addition, pre-approval takes time. In this fast-paced housing market houses receive offers quickly. Without a pre-approval, you will have to wait to make an offer. This can lead to missing out on a dream house because the seller accepted an offer before the pre-approval process is complete.

To avoid this mistake, it’s essential to get pre-approved for a mortgage before starting the home search process. A pre-approval provides an idea of how much financing a home buyer can qualify for.

Mistake #2: Purchasing a Home without a Realtor

Another common mistake that buyers make is not working with a realtor or real estate agent. While it’s tempting to try and navigate the home-buying process on your own, it can be incredibly challenging and time-consuming. A top real estate agent can provide valuable insights and advice on the local market, and help you find properties that meet your needs and budget. A realtor and guide you through the entire home-buying process.

What’s the difference between a realtor and a real estate agent?

A real estate agent is a licensed professional that can assist home buyers and sellers. A realtor is also a real estate agent but is held to a code of ethics. This code of ethics ensures that all transactions are safe and follow all laws. This is why all agents at Century 21 Realty Services are required to be realtors.

Working with a realtor can help you avoid costly mistakes. A realtor can help you from not overpaying for a property or buying a home with hidden issues. Real estate agents have experience negotiating deals and can help you get the best price for the home you want. If you’re looking to purchase a home in Central Pennsylvania, work with a real estate agent who knows the local market and can help you find the right property for your needs. 

Mistake #3: Not considering all of the costs associated with homeownership

Buying a home involves more than just the cost of the property. There are several additional costs that buyers need to consider, such as closing costs, property taxes, homeowners insurance, and maintenance costs. Not factoring in these additional costs can cause financial stress and make homeownership less affordable than you initially thought.

To avoid this mistake, it’s essential to consider all of the costs associated with homeownership before making an offer on a property. This includes factoring in monthly expenses such as utilities, HOA fees, and property maintenance. It’s also essential to have an emergency fund set aside for unexpected expenses, such as a broken water heater or roof repair.

Mistake #4: Skipping the home inspection

A home inspection is a crucial part of the home-buying process. It allows buyers to identify any potential issues with the property and negotiate repairs or a lower price with the seller. Skipping a home inspection can be a costly mistake. It may lead to unexpected repairs or issues not visible during the initial walk-through.

To avoid this mistake, it’s essential to schedule a home inspection before finalizing the purchase of a home. A home inspector will evaluate the condition of the property and identify any potential issues that may require repair or replacement. This information can help buyers negotiate a lower price or ask the seller to make repairs before closing on the property.

Mistake #5: Falling in love with a home before doing your research

It’s easy to fall in love with a home based on its curb appeal or decorations. However, it’s essential to do research before making an offer on a property. Failing to research the home, the neighborhood, and the local real estate market can lead to costly mistakes and buyer’s remorse.

To avoid this mistake, do your due diligence before making an offer on a property. This includes the following:

• Researching the neighborhood and its amenities
• Checking the property’s history and any previous repairs or renovations
• Comparing the property to other similar homes in the area
• Know the school district
• Proximity to public transportation
• Future development plans in the area

In conclusion, buying a home is a significant investment that requires careful planning and consideration. Avoiding these common mistakes can help you make an intelligent and informed decision when purchasing a home in Central Pennsylvania. By getting pre-approved for a mortgage, working with a real estate agent, considering all of the costs associated with homeownership, scheduling a home inspection, and doing your research, you can avoid costly mistakes and make a smart investment in your future. If you’re looking to purchase a home in Central Pennsylvania, contact Century 21 Realty Services. We connect buyers with experienced realtors who guide you through the home-buying process and help you find the perfect property for your needs.

Buying a home is a big decision. However, home buying is also about understanding how the buying process works and what to expect. We provide an outline of the process and basic terms you’ll need to know below. After reading this, you will be more confident when making your next real estate purchase.

Find a real estate agent

The first step to successfully buying a home is finding a real estate agent. The housing market moves quickly. According to US News, houses in November 2021 only spent 22 days on the market. A real estate agent will help ensure that when the house of your dream pops up it becomes yours! This is why finding a real estate agent is step number one in buying a home.

Getting the right help when making such a big purchase is crucial. A real estate agent will help you understand the aspect in this article more in-depth, but most importantly your agent will help you with the following:

Always on Your Side

When buying a home your realtor has the fiduciary duty to assist you in making informed decisions. This means Your realtor will always have your best interest in mind. They will help you make the best buying decision possible and help you avoid common pitfalls. When putting in an offer your realtor will assist in navigating the many factors that influence home sellers.

Know the Market

A real estate agent knows the market. They can help you find a home that meets your needs and fits your budget. Your realtor will also know trends from across the industry to understand if you should be looking to buy right now or hold off as market conditions change. Real estate agents are also aware of the kind of home you want to buy. Sometimes your agent may become aware of a house becoming available before the public. This home-buying advantage can lead to putting in an offer before anyone else and may even save you money!

Navigating the Process

Agents can help buyers navigate the entire home-buying process. All sorts of issues can arise during the process, from finding financing options to negotiating with sellers and managing paperwork during closing. Your agent can help you navigate these problems relieving your stress and letting you focus on finding your perfect home.

Start to Finish

Your agent will also be there for you from start to finish, walking you through the entire process. In addition, a real estate agent can help you understand the large amounts of paperwork you fill out during the home-buying process. A firm understanding of documents before signing provides peace of mind to many home buyers. 

Understand the Home-Buying Market

The housing market is a key part of our economy. Many factors affect the housing market and the price in which you may pay at any given time, including:

Interest rates

Interest rates move up and down depending on how banks feel about lending money to consumers. If banks are nervous about lending money, they think there might be too many defaults on loans (people not paying back their mortgages). Lenders may then raise interest rates so that lenders can get compensated for taking on more risk.

Home Availability

Home prices themselves are affected by multiple factors. The availability of homes plays into this equation. When fewer homes are available for sale, the demand increases, which drives prices higher. If there are too many homes for sale compared to the number of people looking to buy them, then prices will fall.

Economic Conditions

Economic conditions also play a factor in the pricing of homes. Inflation and federal interest rates play a large part in the economy. Times that the economy is growing at a healthy rate and inflation is low, home prices tend to rise. When inflation is high, home prices tend to fall.

The housing market is large and complex. Due to the complexity of home buying, many seek help from a professional.

Mortgage Basics

Mortgage interest rates are the cost of borrowing money for your home. The rate is expressed as a percent and can vary depending on the market conditions and the lender. You can shop around lenders. Don’t hesitate to see which home lender will give you the best deal. In addition to shopping lenders, consider looking at different types of mortgages.

Interest Types

There are fixed-rate and variable-rate mortgages; each has its benefits and drawbacks. Fixed-rate mortgages maintain a set interest rate for the life of the loan, making it easier for you to budget for your monthly payments. However, if rates go down or up after you’ve locked in your rate, your interest rate will not change. If you choose a variable-rate mortgage, your interest rate will adjust with the market. Your mortgage and interest payment adjust with the market conditions, good or bad.

Mortgage types are options for home buyers and each has different strengths and requirements.

FHA & VA

An FHA (Federal Housing Administration) Mortgage is an insured mortgage through the federal government. These loans require a lower down payment of 3.5%. They normally are associated with easier credit qualifications and low closing costs. These loans may also require PMI (Private Mortgage Insurance) if the down payment is less than 20%.

VA (Veteran Affairs) mortgages are similar to an FHA loan but these are held specifically for veterans, service members, and their surviving spouses. VA loans may even require no down payment or mortgage insurance. If you may qualify for a VA loan make your real estate agent.

Conventional

A conventional mortgage is uninsured by the government. This means there is a higher risk for the lender. To compensate for this higher risk home buyers must have between 3% and 20% down and a good credit score. If you have a down payment of less than 20% you will be required to have PMI (Private Mortgage Insurance).

Private Mortgage Insurance

If you put a down payment of less than 20% of your home’s value, your lender requires private mortgage insurance. A down payment of 20% will help you avoid paying private mortgage insurance (PMI). This added insurance protects the lender in case you default on your mortgage. Once you have put down or paid off 20%of your mortgage, you can remove the insurance from your loan. Removing private mortgage insurance will decrease your monthly payment. It will also allow you to make more payments toward your principal, which will pay off your loan faster!

Down payments

A larger down payment helps the bank evaluate your creditworthiness. A larger down payment can lead to a lower interest rate and reduced fees. It also will bring down the monthly payment of your new home. Most importantly, it can decrease the amount you pay in interest over time. Decreasing your interest rate can equate to tens of thousands of dollars or more in savings!

Get pre-qualified and pre-approved for a mortgage loan

The first step in buying a home is getting pre-qualified or pre-approved for a mortgage loan. You’ll need to do this before you start looking at homes. It will help you narrow down what kind of house you can afford. 

Many times your real estate agent will have a lender they have a relationship with that they trust and can recommend. Ask your real estate agent which lender they would recommend.

Pre-qualification

A pre-qualification is when they’ve analyzed basic information about your financial situation. Your lender then determined that you could qualify for a certain amount of money on your house purchase. This does not mean this is the final amount you are eligible for but a rough estimate.

Pre-approval

Pre-approval means your lender has run checks on other factors such as credit score, employment history, etc. Once they have analyzed these factors and have found you creditworthy, they’ll provide a pre-approval letter. This letter means they are conditionally ready to lend money for your new home purchase. You can now go out shopping for a house and be confident that you will be able to get a mortgage for the amount of money provided. Once you find your dream home and it costs more than your pre-approval letter, you have options. However, you will need to convince your lender or find another lender that you can qualify for more. If this does not work, you will need a larger down payment to make up the difference between their lending amount.

Finding your dream home

Once you are pre-qualified and have your real estate agent lined up, it’s time to start looking for your dream home! The first thing to do is research what you may want in a home. Are there specific features that are important to you? Do you have kids or plan to have kids in the future? Once these things are determined, then be sure to look at homes that fit those needs. Keep in mind, many times you may compromise on some of your wants. For example, you may want a big backyard and still be within 10 minutes of grocery stores and other retail establishments. Upon searching, the only place you can find in your price range has only half the yard you wanted. Understanding or ranking your wants and needs can help you stay objective throughout the process.

Fixer-Upper or Move-in Ready?

Also, consider whether or not you want an easy-to-maintain property or are willing to put work into repairs. If something needs repair now or soon after moving into the home (such as plumbing), you will be responsible for addressing these issues after closing. Keeping in mind the level of work you are willing to do yourself or pay for is something to keep in mind.

Neighborhood

If you’re looking to live in a specific area, then be sure to read up on the local crime rates and other factors that might affect your decision. For example, if you want a quiet neighborhood and are worried about safety, try finding a home with plenty of streetlights or other features that help deter criminals from hanging around!

View Homes

Once you’ve found a few homes you are interested in, schedule time with your real estate agent or the buyer to view the home. Once you’ve found a home that ticks most or all of your boxes, it’s time to put in a contingent offer.

Make an Offer on Your New Home

Once you’ve found a home you want to buy, it’s time to make an offer on the property. The seller will likely have a list price in mind and may accept or reject your bid based on whether or not they think it meets their expectations.

If they accept your offer, you’re one step closer to owning your dream home!

However, if the seller rejects your offer, they may be willing to negotiate with you on other terms, such as who pays for closing costs. You could also choose to walk away from the deal and keep looking. A real estate agent is perfect for navigating these kinds of real estate deals.

Contingency clauses

A contingencies clause is an agreement between two parties that their contingencies must be satisfied before the party is obligated to perform their end of the bargain. The clause allows the party to leave the deal if any of the conditions listed aren’t satisfied.

For example, you want to buy a house and put down 20% as your down payment. However, your lender requires no liens against the property (like a tax lien) before approving you for financing. In this case, we have a financing contingency related to your lender. In addition to liens and other title check issues, a lender, seller, or home buyer may add contingencies related to home inspection, appraisal, and more.

When you are negotiating a purchase contract, make sure to include contingencies in the document.  The contingency will save you the hassle and money of losing deposits or having legal issues.

Get A Home Inspection

It is always a good idea to have a home inspection before you purchase. A home inspection brings to light issues that can potentially stop closing or cost you money in the future. The price usually isn’t all that high, but it is money well spent because it helps prevent unpleasant surprises down the road.

A home inspection is even if you’re buying a new construction home. Many things can go wrong during construction and not be discovered immediately (or even after moving in). A builder’s inspection can help find fixable issues before you move in, but it may not find everything. 

Close On Your New Home Purchase

When closing on your new home, there are closing costs. These are fees associated with drafting documents and processing paperwork needed for purchasing a home. Closing costs vary and can range from 2-5% of your purchase price (or more). The lender provides a cost estimate before closing. Be sure to ask about them! You can also negotiate who pays what percentage of the closing costs. Be sure to speak to your real estate agent to understand the best option for you.

In addition to closing costs, you should get title insurance. If you have a mortgage, title insurance is required. Title insurance is advisable, even if you are paying cash for your new home. Title insurance is a good idea for any real estate transaction and can provide peace of mind for buyers and sellers alike. It protects against potential title issues, such as liens, unpaid taxes, and past owners with a claim to the property. Approximately 20% of all real estate transactions have a deed or another potential issue that title insurance protects against, making it an essential part of the process for many buyers and sellers.

Conclusion

Buying a home is one of the largest investments most will ever make. If you are buying your first home, speak to experts in the field. Century 21 Realty Services is always here to answer your questions. Contact one of our team members at (717) 737-2121