Step 2

When to buy?

Once you’ve decided you’re ready to buy; the question becomes “When should I buy?” There are a few factors that come into play here. The most important is getting your financial affairs in order. Once you’ve done that; consult a real estate agent about what you’re looking for. He or she can take a look at the current market and determine if you should go ahead and start looking. They may advise holding off until the real estate market is more aligned to what you’re interested in. Also, if you’ve recently come into a large sum of money you may think now’s the time to purchase. This may very well be true, but sometimes; people are overwhelmed with their newfound wealth, and they make a hasty decision. Be sure you’re not being impulsive.

Step 3

Organising your finances

Purchasing a piece of real estate is a big endeavor so before you commit to such a huge obligation; it’s important to take a close look at your financial profile, and organize it to be better prepared to meet the new financial debts that come along with purchasing real estate.

Consider consolidating some of your debt

If you’re monthly debt obligation is too high to take on a mortgage, search for ways you can consolidate some of it into one lower monthly payment. This will free up more money you can dedicate toward paying a mortgage.

Can you pay off some of your debt?

deally, paying off a portion of your current debt would be best. It’s not always possible to do this; but it’s definitely something to take a look at.

Focus on savings

Every little bit counts. Again, create and review your monthly budget and see if you can find a way to save a little more each month; a little bit here and a little bit there; will add up to a lot over time.

Step 4

Self-credit check

Not only do you need to be able to afford to pay your mortgage, you’ve got to show a lending institution that you are capable of doing it. Take a look at your credit report. Make sure the report is accurate, and if needed; decide where you can effectively pay it down the quickest.

A copy of your credit report can show you exactly what the lender will see when they do a credit check on you. Review the credit report to be sure there is no incorrect information on it.

It may seem unlikely; but many people have discovered errors on their credit reports that negatively impact it. Never assume your credit report is accurate. Also, you’ll be able to see if you’ve got any problem areas that need addressing before you talk with a lender.

It might be better to put off talking with a lender for a few months so you can address those problem areas. You may need to pay down some debt, or repair some missed payments before you apply for a loan. There’s no sense in applying for a loan, if you know you’re more than likely going to be refused.

Review your credit report at least 3 months before you approach a lender, and make sure your credit report looks good.

Step 5

Getting a deposit ready

One of the first things you’re going to need when you’re serious about taking steps toward purchasing a home; is a deposit. The deposit will be used for a down payment and to cover closing costs associated with the sale. Getting a deposit together may not seem easy, but it’s definitely achievable with the right strategy.

Firstly, create a budget on paper so you can see exactly where your money comes from, and where it goes over the course of a month. This will give you a basis to work from when gathering up money for your deposit and closing costs.

Review your completed budget, and make changes where you can. Free up as much of your money as you can. The money you get from these changes can be put away to use toward your deposit.

Also, if you’ve come into a large chunk of money; it may be tempting to run out and purchase that brand new big screen television you’ve been wanting for so long. However, if you’re serious about making a real estate purchase, that money should be saved to go toward your deposit.

Step 6

Leave assets alone

When you apply to be approved for a loan, the lender’s top concern will be whether or not you can afford to pay them back; and whether or not you’ll have any money for a down payment. One of the things a lending institution will review is your financial resources.

They’ll look at your income level, and they’ll look to see if you have money saved anywhere. When they see large deposits or withdrawals, this can set off red flags. For an array of reasons, including their need to rule out fraudulent activities; the lender may require you to provide a thorough financial portfolio that clearly documents these large withdrawals or deposits.

You can avoid this scenario by leaving your liquid assets right where they are. If there is a good reason for moving your money around then certainly do it, but be prepared to provide a paper trail that will document where the money came from and where it went to. If something can wait until after you’ve been approved, it’s better to put it off for now.

Step 7

Pre-qualification

This is the step where people start to doubt themselves and their ability to get prequalified. Relax; it’s not as scary as it may seem. Follow these three tips to get yourself pre-qualified for your loan.
Firstly, don’t put all your eggs in one basket. Just because one lending institution denies you; doesn’t mean they all will. Broaden your horizons and shop around.

Secondly, start shopping to become pre-qualified early. Waiting until the last minute will slow the process down. With a pre-qualification letter in-hand; you stand a better chance of getting that perfect piece of real estate.

Thirdly, Get together all of your financial documentation. You’ll need to back up everything you tell a potential lender about your financial profile with proof of documentation.

Step 8

Finding a real estate agent

For most people, purchasing a new home or business is the biggest financial investment they’ll ever make. This makes it important that you find a good real estate agent who is well versed in the real estate industry.

For Your real estate agent should be personable, have patience, and be willing to do whatever is necessary to help you find, view, and ultimately purchase; that piece of real estate.

What is the best way to find a real estate agent like this?

Word-of-mouth is one of the best resources you have when trying to find a good real estate agent. When people share their personal experiences about how they were treated, and the service they received, you can get a good idea of what sort of person you’d be dealing with; should you decide to do business with that same person or company.

And, there’s nothing wrong with making some phone calls to numerous real estate offices, and letting them know what you’re looking for a real estate agent. You could also do some investigating on the internet into real estate companies in your region.

Step 9

Set price and location

OK, so you’re ready to purchase. Now you need to set a price and determine a location to start searching.

Location – Is the location of the property situated in a setting you’re looking for? Close to a business district or far enough away from one? How far will you have to travel to work? How far is it from important places like hospitals, schools etcetera? Make sure it has a convenient location; or one you’re happy with.

Price – When searching for a property, be sure to know exactly what your budget is and how much you can afford to pay. Knowing what you’re able to afford will save lots of time and help you avoid wasted effort.

Other considerations are the size of the property, and whether or not there are lots of maintenance or code issues.

Step 10

Asking the right questions

It’s important that you’re confident you’re making a wise choice when you purchase a piece of real estate. Blindly putting your fate into the hands of your real estate agent isn’t wise. You can do your part and ask yourself these questions in order to make an educated decision.

How will I know if the property is overpriced?

Get the answer to this question by looking at what other properties similar to the one you’re considering purchasing have sold for over the past few months; or what they are currently selling for.

Does the seller have any grievances with the property?

Are the neighbors loud? Are there barking dogs in the neighborhood? Do the streets flood? Are the school accredited? The answer to these types of questions can give you some great insight as to what it will be like to live there.

Other questions to ask:

• Why is the seller selling?
• What did they pay for the property and when?
• What improvements have been made?
• Has the property been inspected by a qualified inspector?

Finally, ask yourself the most important question, and answer it honestly. Can I afford this property?

Step 11

The inspection

The inspection is a critical part of purchasing real estate. Skipping or underestimating the value of a home inspection isn’t wise on any level. The inspection is your chance to take an intimate, and detailed, look at the property to see if there are any issues with it.

What you do or do not discover can help you decide if the property is right for you. Here are three key things to remember with regard to the home inspection.

Firstly, it may seem like a nice gesture and a way to save a little money; but using the property owner’s inspection report isn’t wise. It’s always better to pay for a private home inspector yourself so you know you’re going to get accurate results.

Secondly, once the inspection has been done; review it and ask questions. If the inspection reveals issues; you’ll need to know how much it will cost to make the proper repairs.

Thirdly, use any issues discovered in the home inspection as a bargaining chip during negotiations. There’s a good chance you’ll wind up negotiating with the property owner. Having that home inspection handy could give you leverage to bring the price down, or at the very least; ask that the property owner make any necessary repairs as a condition of you purchasing the property.

Step 12

The disclosure

The disclosure statement can be your best friend when trying to determine if a particular piece of real estate is right for you. It can make you aware of any significant problems you may need to contend with should you decide to purchase the property. It can also serve as a means by which you may be able to back out of a deal or seek restitution for an issue that wasn’t disclosed to you prior to purchasing the property.

A disclosure forces the property owner to inform you of any and all serious defects that exist with regard to the property. If, for some reason; a serious defect is discovered that isn’t presented on the disclosure statement, you can back out of the deal, without blemish.

Always ask for a disclosure statement, and when you get it; scrutinize it thoroughly. Your real estate agent can help you understand what’s in the disclosure, and give you advice on how to proceed.

If you find a serious defect with the property once you’ve purchased it, and it wasn’t disclosed to you on the disclosure form; you very well may have grounds for court action to recoup your losses.

Step 13

Negotiation tactics 101

Negotiating is part of the real estate purchasing process, and isn’t something you should be intimidated by. Inevitably, both parties barter back and forth as each of them attempts to get the best deal for themselves. It’s a natural part of the industry, and it doesn’t matter which side you’re on; you’ll be faced with negotiating at one point or another.

The first thing to remember is not to show your true emotions no matter how badly you want the property. If the seller figures this out; you won’t have much success at negotiating.

Another thing to remember is to bid lower than what you’re actually willing to pay for the property. This way the seller can counter-offer, which will make them feel as if they are winning. Countering back and forth is very common.

Another negotiating tactic is to don’t seem impatient. The seller may pick up on your impatience and use it to their advantage.

Finally, lean on the know how of your real estate broker to guide you through the negotiating process. You still have final say; but listen to what they are telling you before making a final decision.

Step 14

The final walkthrough

Once you’ve found the property, contacted the real estate agent, viewed the property, completed the inspection process and negotiated the price; you’re now ready to seal the deal. STOP! Before you sign on the dotted line, you should do one more walkthrough of the property.

The purpose of the final walkthrough is to ensure the property is in the condition you are expecting it to be in. This is especially necessary when repairs have been made to the property as part of the sales agreement.

Workers who performed the repairs could have inadvertently damaged part of the property, or there could have been a misunderstanding about what was supposed to be done. You also need to ensure that if repairs were supposed to have been carried out; that they have been completed.

You should require that you be allowed to do a final walkthrough of the property as part of your initial offer to buy it; and the final walkthrough should happen at least five days before the closing date.

Step 15

The closing date

In the excitement to make an offer on a property, you may forget to include a closing date with your offer. Once you’ve found that perfect property, it’s easy to get a little hasty and want to make that offer before someone else comes along and makes their own offer. Still, it’s important to include a closing date in your offer to purchase a piece of real estate.

The reason for this is that if you are on a time schedule to vacate where you are currently residing; or if you’re going to have to give a certain amount of notice before you can vacate; you’ll want to make sure the new property is readily available for you to move in.

The current property owner could be facing their own time frame issues in relation to vacating the property as well. A closing date will clear up any confusion with regard to timing the actual move.

Ensure you have a contingency plan in place in the event there is a delay with the closing. It’s not a common thing; but it can happen. It’s better to be prepared now rather than completely unprepared later.

Step 16

Preparing for the move

Once you’re ready to make that much anticipated move into your new home; be sure to address these important matters that require your attention.

• 
  
  • 1.
  • Not getting pre-qualified
• 
  
  • 2.
  • Letting your true feelings show through
• 
  
  • 3.
  • Assuming a foreclosure is the best deal
• 
  
  • 4.
  • Not budgeting for property taxes and insurance
• 
  
  • 5.
  • Not getting a professional inspection
• 
  
  • 6.
  • Buying the first thing that looks good
• 
  
  • 7.
  • Not shopping around for good mortgage rates
• 
  
  • 8.
  • Guessing at their budgeting
• 
  
  • 9.
  • Not dealing with a qualified real estate agent
• 
  
  • 10.
  • Hesitating

Any one of these mistakes can wind up breaking the deal; getting you in over your head or making you eventually regret your decision. Your time and money is valuable. Be sure to do your homeworkand elicit the assistance of a qualified real estate agent who can help you successfully navigate each step of the purchasing project.

Step 17

Preparing for the move

Once you’re ready to make that much anticipated move into your new home; be sure to address these important matters that require your attention.

• Switch your utilities over from your current home to your new home.
• Re direct letter delivery from your current letter box to your new address.
• Switch your drivers’ license and other important documents over.
• List your new address with all financial institutions you do business with.
• Cancel garbage pick-up at your old address and start it at your new one.
• Take photographs of your current home in the event you need to show the condition of it at the time you moved out.
• Make sure all smoke detectors are working in your new home.
• You may want to consider changing the locks on your new home.
• Register your new address with town officials for voting purposes.
• If necessary; have new healthcare professionals in place before the move is finalized and have your medical records transferred.
• Finally; be sure to send out an announcement to all your friends and family regarding your new contact information.

Step 18

Tips for making a smooth transition

• Consider hiring a moving company, but get multiple quotes before selecting one.
• Moving out mid-week may be cheaper so ask.
• The earlier you commit to a moving company the better.
• Insure your property so in the event it’s damaged in the move you can replace it without taking a hard hit on your monthly budget.
• Notify your utility provider 3-weeks in advance of your move.
• Leave pets and children with friends on moving day so they’re not underfoot.
• Pack up early, and make an inventory list of your belongings.
• Use some sort of labeling system when packing to avoid a nightmare when unpacking at your new home: sticky labels, color-coded box etc.
• Pack toiletries and other essentials you’ll need immediately in your new home in suitcases for easy access.
• Confirm you move time so you know your household items will arrive before you do; this will help avoid potential removal costs.
• Give all keys for your current home to your real estate agent to deliver to the new occupants.
• Exchange mobile phone numbers with the movers so you can stay in constant contact with them.
• Once you arrive in your new home, check that the phone and electricity etcetera are working.
• Contact your real estate agent immediately if you find something amiss or damaged.