First Time Home Buying 101: The Essential Guide
A home is one of largest purchases an individual makes in their life. Yet, many people are unaware of how to go about buying a home until they start the process. To prepare you for the journey that lies ahead, explore this essential guide to first time home buying!
If you need assistance selling your house or are looking for a new condo in Isle of Palms, SC, contact Jimmy Carroll Realty today.
Research Desired Areas
The first step to buying a home is doing some research on the areas you potentially want to live. Some information you may want to look into includes:
- Average prices of homes
- School district
- Crime rates
- Location to restaurants, stores, parks, etc.
- Plans for building in the immediate area
- Your commute time
If you live near the neighborhoods you’re interested in, drive through them on various days at different times to get a feel for the traffic and atmosphere of the area.
Get Pre-Approved for a Loan
Getting pre-approved for a loan serves two main purposes:
- It reveals the maximum amount you’re able to afford based on your income
- It shows sellers you’re a serious buyer
To get pre-approved, you’ll need to work with a mortgage banker. You will send them financial information regarding your income, savings, debt, investments, assets, and more for them to determine how much money you qualify for.
If you’re aiming to make a 20% down payment and have a modest amount of other debt, lenders typically recommend buying a home that costs no more than three to five times your annual income.
Make a Budget
Once you receive your preapproval letter, you can then create a budget that suits your financial situation. Remember, what you’re preapproved for represents the maximum amount a lender is willing a provide you. You may want to set your budget slightly lower to account for unexpected and other costs, such as the following:
- Closing costs
- Home inspection fees
- Appraisal costs
- Moving fees
- Home repairs
Hire a Real Estate Agent
With your budget set, you can then hire a real estate agent to help you find your dream home. Hiring an agent is a smart choice, as they have invaluable local connections and resources to search for the top available properties. They will also serve as a liaison between you and the seller, helping negotiate a fair price, asking for contingencies, and drawing up important documents to move the buying process forward.
If you’re looking for real estate in Isle of Palms, SC, contact Jimmy Carroll Realty today!
Create a List of Needs vs Wants
Before you and your realtor can start house hunting, you need to identify what you need in a home versus what you want in a home. This can help narrow down your list of potential properties and ensure you end up in house that’s suited to your lifestyle.
“Needs” are features that are non-negotiable, such as:
- Number of bedrooms & bathrooms
- Square footage
- A fenced in yard for children or pets
- Location/neighborhood
“Wants” are features that you desire but aren’t crucial for day-to-day life, such as:
- A pool
- A back deck
- A screened porch
- A skylight
Start Browsing Houses
After disclosing your list of needs and wants to your realtor, you can start browsing homes! Your agent will procure some options that best match your requests and take you on tours. The home you ultimately land on should meet all of your needs, not just a few. Never compromise needs in exchange for your wants.
Make an Offer
Once you’ve found the home of your dreams, you can then make an offer on it. Your offer will include:
- How much you’re willing to pay for the home (whether it’s at, below, or above asking price)
- Who will be responsible for fees such as closing costs
- Your earnest money, which is basically a deposit you make on the property. It’s usually a percentage of the offer price that’s set by regional standards.
- Any contingencies you might have, such as making the purchase contingence on a flexible closing date, selling your current home, or a home inspection.
The seller will accept, counter or decline the offer. If they counter, it’s up to you to agree to their terms. After both parties come to an agreement, you then enter into a contractual agreement in regards to the sale.
Set up a Home Inspection
The next step to the home buying process is ordering a home inspection for the property. A home inspection will reveal any major issues with the property, such as a faulty foundation, structure, hot water heater, and other important items. You will be notified of these issues, and from there, you can request that these problems are fixed by the seller before you move in. Or, if the number of issues turns you away from a property, they can serve as a viable, legal reason to get out of your sale agreement.
Shop for & Secure a Mortgage Loan
When the inspection is complete, you can then start shopping for a mortgage loan. The goal here is to find a low mortgage rate, which varies depending on the type of loan you choose and the loans you qualify for. You also need to consider the rates and fees the lender charges by working with them, as these hidden costs can add up quickly.
Order an Appraisal
An appraisal of the property is necessary to ensure the value of the home matches the purchase price. The lender is in charge of taking this step in order to approve your loan.
Close on Your Home
Once the above steps are complete, it’s finally time to close on your home. On your set date, you’ll meet with your realtor, an attorney, and occasionally, the sellers to sign your closing documents. Once all signatures are complete, you’ll be handed the keys and can start moving in!
Choose Jimmy Carroll Realty
We hope this essential guide to first time home buying assists you! If you’re ready to find the home of your dreams, contact Jimmy Carroll Realty today. We can introduce you to all of the available properties in the Isle of Palms, SC area that you’re sure to fall in love with. We look forward to assisting you!
