The 9 Steps to Home Ownership

Now is a really good time to invest in real estate - whether it is a home for your family or investment property. There is still an inventory of homes in all price ranges and areas around Greater Cincinnati and Northern Kentucky, and interest rates are the lowest they have been in years.

To say the real estate landscape has changed drastically in the last 12-18 months is an understatement. There are more lender or bank owned properties, HUD owned properties - all with their own peculiar requirements and set of problems. Now more than ever you need to consult a real estate professional.

These 9 Steps to Home Ownership are a great place to start. Or contact me and let me send you my Homebuyers Guide.

Step - 1 Make the Decision to Buy

It seems obvious, but it's good to note that the first step to buying a house is making the decision to buy. Consider the reasons you want a new home and write them down. How long will you want to live in the new house? In this market, with low interest rates and high inventories, you should be able to find a home that meets your new home criteria and fits your financial needs. Can you afford a house that will meet your list of requirements? A good rule of thumb is your mortgage payment should not exceed 1/3 of your after tax monthly income.

Step 2 - Seek Professional Guidance

I'd like to schedule a time to meet with you to hear your plans for the future. We'll talk about neighborhoods, schools, economic factors liable to affect the market today and tomorrow, as well as how you would like your house and neighborhood to grow with you.

At our initial meeting I will educate you about the aspects of negotiating for a home. Lender owned and HUD homes will have a completely different negotiating strategy than consumer owned homes.

I will also help you get pre-qualified for a mortgage loan. Pre-qualification is a written statement from a loan officer indicating her opinion that you will be approved for a mortgage loan up to a certain amount. The fact that you are pre-qualified will put us in a stronger position when we are negotiating the deal, and in the case of lender owned properties, it is a requirement before they will even consider an offer to purchase.

Step 3 - Begin the Hunt

After our initial meeting, I'll search all my resources for houses on the market that fit your criteria. Once we have established your criteria, I will set up a "Client Portal" to the Multiple Listing Service (MLS) to provide you access to all of the current property listings. This will notify you immediately of new homes that meet your criteria, which can be very important in certain areas and price ranges.

As we tour houses, I'll point out positive features and negative features. I'll ask you to tell me what you like and what you don't like. You'll probably amend your "wish list" as we tour houses, some things will become more important and others less important. With this new information, I'll refine our search criteria to narrow in on the house of your dreams.

Step 4 - Know the Market

My knowledge of the local market is an essential factor in the house search. Despite the shift to a buyer's market there are still some neighborhoods that remain "hot" and require immediate action.

As we tour houses, I'll let you know how this home compares to other recent sales and when the house is "priced to sell". My unique market knowledge and your personalized Client Portal will keep you a step ahead of the "house hunting competition".

During a buyer's market there are more houses for sale than buyers. This gives us more negotiating room as houses are taking longer to sell. But sellers, both consumers and bank owned properties, have adjusted to the buyer's market and, for the most part, are pricing properties appropriately.

Step 5 - Find Your Dream House

I'm confident we'll find your dream house. When we do, I'll put together the Contract to Purchase, tailored for your needs including appropriate contingencies (such as obtaining financing, favorable home inspection, clear title, etc.).

The Contract to Purchase is normally presented with "earnest money". This is a cash deposit held in an escrow account by the real estate broker, to secure an offer to buy the property. The amount is applied to closing costs. If the seller accepts the offer, generally closing is held 30 to 45 days from the offer date (generally dependent on the turn around time of your mortgage financing).

Step 6 - Negotiate the Deal

With consumer owned properties, it is not uncommon to receive a counter offer when the initial Contract to Purchase is submitted. Don't let this discourage you. We will discuss the counter offer and decide whether or not to accept the counter offer, submit our own counter offer, or reject the counter offer and move on.

With lender owned properties, they will typically review all offers (Yes, there are frequently multiple offers under consideration) and accept one to work with and reject the rest. While you can still ask for inspection and financing contingencies, an offer without those contingencies would most likely be accepted first.

Market conditions will play a role in how aggressively we negotiate the deal. We will also work within your limits. Emotions can lead to buyer's remorse. It is better to set limits prior to negotiating an offer and stick to these limits.

Step 7 - Get a Loan

During the closing period, you will be working with your mortgage lender to provide all of the necessary documents for your loan application. Since you pre-qualified for the loan before starting your home search, you will be that much closer to the end. I'll gather the necessary property information your lender will need to close the loan.

You will also need to secure a one year paid homeowners insurance policy for your new home at least 7-10 days prior to closing.

Step 8 - Close the Deal

You will receive a "Good Faith Estimate" of closing costs at the time the loan application is submitted to the lender. The estimate is based on the loan officer's past experience and will include estimates of escrows for homeowners insurance and real estate taxes, if applicable. This document will detail the money you need to bring to closing. I will be glad to review the "Good Faith Estimate," with you answering any questions.

The closing date will be agreed to in the original Contract to Purchase, usually 30-45 days from the date of the Contract.

Step 9 - Move In

Congratulations! It's time to move into your new house and make it your home. Enjoy this exciting time. I'll give you a checklist to help you remember the numerous details, to assist in making your moving day as stress free as possible.