10 steps to home ownership
There’s no greater example of the American dream than owning your own home. Nearly 1.1 million residents in Maricopa County are homeowners and you can be one, too! One of the best feelings after a long day is home ownership and coming home to your very own space.
The home buying process is often tricky, which is why one of the most strategic things you can do is work with a REALTOR. If you’re like many first-time homebuyers, you may not know where to begin. Don’t worry, here’s our checklist of 10 steps to home ownership.
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1. Choose a Trusted, Full-time Real Estate Agent
Starting your home buying journey is exciting but it also comes with frustrations and challenges, which is why you need a trusted realtor® to guide you through the ins and outs of the market.Finding the right real estate agent is tricky. The Phoenix metro area alone is home to over 24,000 agents – that’s one for every 67 residents. Choose an agent you trust and pay attention to how they engage with you. You know you’ve found a good fit in a realtor when they’re easy to get along with, provide honest advice and share expert knowledge about the neighborhoods you’re interested in. Agents should have a plan for you and they should be proactive and strategic.
2. Get Pre-qualified for a Loan, or Set Aside Cash
The last thing you want is to waste your and your realtors’ time if you’re window shopping without having the means to buy a home. Knowing what you qualify to purchase will set you and your agent off in the right direction. If you can make your purchase with all cash, great! If not, ask your realtor for lender recommendations. Your agent will suggest other professionals they know can get the job done and who treat their clients with respect and diligence. Be prepared to show your lender proof of your financial health. The bank will want to verify your job, income, debt and assets when you submit your loan application.
3. Search for Homes on the Web
There are many websites that can help you find a home. Some of the most obvious, popular and resourceful websites are Realtor, Zillow, Trulia and Redfin. If you find a home you like on these apps, give it a gander on Google Maps so you can see the surrounding area around the property. Of course, consumer-related house hunting websites will only take you so far and are designed to capture your information and sell it to lenders and agents. The advantage of working with a realtor is that they have access to a professional MLS (multiple listing service) database. The MLS system is the most powerful real estate marketing platform out there and contains key insights, data and resources for buying and selling homes you won’t find anywhere else. All other sites (including those listed above) are fed from the MLS, therefore going straight to the source is your best and most powerful option. At Halpern Residential, we’ve taken it one step further, keeping you in mind, and integrated the MLS tool into a powerful home search tool on our website that works on all devices.
4. Visit Homes in Person
Based on your dream home checklist, a realtor will provide you with options that meet your criteria. It’s essential to tour homes with your realtor. This is one of the most expensive purchases you’ll make in your lifetime so you don’t want to make any unforced errors. While you draw your eyes to the impeccable staging and floor plans, realtors use their trained eye to look for things that aren’t obvious to you, such as warped floors, watermarks on ceilings and walls, foundation integrity and other technical issues.
5. Submit Offer(s)
It’s not uncommon to view ten or more homes before you narrow your choices to a few you want to submit offers on that fit within your budget. Your realtor will take the lead in helping you draft an offer that helps you stand out and win. They’ll run comparisons on what similar homes in the area are selling for to determine if the price the seller is asking for is reasonable. Then, your realtor will advise you on an offer strategy.
6. Find a Reputable Home Inspector
Remember, in step 4, we noted your realtor will look out for red flags during your home tour. Here, you can raise those issues with a licensed home inspector whose job is to spot immediate and potential problem areas. You never want to buy a home without a thorough inspection. Your realtor will recommend one or more inspection companies that they know are very good at what they do. Do NOT go for the cheapest inspection company. Go with reputable and seasoned inspectors. Call and interview them and check out their reviews online. Ask about their experience, certifications and what the inspection will include.
A home inspection can last a couple of hours and you want to be present for the review of findings so you can ask thorough questions and get a better understanding of what the inspector found. Keep in mind, an inspector will never make recommendations beyond providing you their findings. Oftentimes, inspectors will find more substantial issues that will require other trades (HVAC, Roof, Plumbing, Electrical, etc.) to come and investigate further. Your agent should have those contacts as well.
7. Get an Appraisal
It’s important to get an appraisal to determine the fair market value of the home you want to buy. An appraisal tells you how much the home is worth and informs the lender, who’s financing your home loan, that the price you’re going to pay for the home is fair. In Arizona, if the home appraises for below the contract price, you get a chance to renegotiate with the Seller (unless to get the home in a competitive bid situation, you waived that right) or cancel the contract and get your earnest money back.
8. Get Financing Approved
Getting financial approval for your home is nerve-wracking and on average, can take a few weeks to roughly 30 days. The lender is determining the risk associated with giving you a loan and is surveying your finances, bank statements, tax returns, debt, credit history, etc. Ensure all the documents you provide your lender are accurate, thorough, and respond to their requests quickly to prevent delays. The longer your approval takes, the higher the chances of you losing out on your dream home.
9. What to Look For in a Final Walkthrough
A final walkthrough is one of the last tasks before you become a homeowner. This is also your last chance to make sure the house is in the same condition as it was at the time of contract acceptance. If you notice a problem after you sign on the dotted line, too late, the problem is yours now. Here are some key things to look for in a final walkthrough:
• Tour the entire property
• Examine final repairs you requested from the inspection
• Turn lights off and on
• Test all electrical outlets
• Open windows and doors
• Test all appliances
• Inspect bathrooms
• Inspect heating and air conditioning
• Inspect kitchen and run the garbage disposal
• Run water and check for leaks
• Inspect ceiling, walls and floors
• Look for signs of rodents
• Look for damage the sellers may have done when moving out
10. Receive Your Keys!
By this point, it will feel like an eternity has passed since you started the home buying process. But once you get to closing day – you’re at the finish line! In Arizona, three days prior to closing, you sign your stack of loan documents. The title company will notarize and send your loan docs back to the lender. Once the lender approves and sends their funds, the title company will register your closing documents with the county. Barring running out of ink or paper cuts, you can now FINALLY get keys to YOUR new home! Congratulations.
Author: Trevor H. Halpern, J.D. is the No. 1 independent agent at Phoenix-based North&Co. and the founder of the Halpern Residential real estate group. As a Phoenix native, Halpern’s deep knowledge of both people and property has allowed him to create client success in all areas of town. As a graduate of ASU’s College of Law, Halpern prides himself on delivering high-level strategy, efficient negotiations and precise tactical execution. Since 2011, Halpern has sold over $100 million in real estate and has been in the top 1% of real estate agents in the Greater Phoenix Metropolitan Area since 2016.