Thinking of buying or building a home in Indianapolis? Make sure you know what to expect - whether you're a first-time buyer or a real estate aficionado. Here are the steps you need to know for buying a home.
Step 1: Freshen Up Your Finances & Figure Out What You Can Afford
Freshen up your Finances Before you dive into the exciting part of home buying… the search! Make sure you have all your ducks in a row. Figuring out your finances and crunching some numbers will allow you to set a realistic budget and determine what you'll be able to afford in mortgage payments each month, as well as what you can invest initially as a down payment. This handy mortgage calculator can help you estimate your monthly payments.
Keep in mind additional expenses like closing costs, fees, homeowners insurance, taxes and even moving fees will all add to the overall costs. Be sure to check your credit score, and remember that just because you don't have a traditional 20% down payment doesn't mean you can't buy a home!
Start by learning about your FICO Scores and how to improve them at www.FicoCreditScores101.com
Step 2: Find an Agent
Additionally, in the current market many homes are under contract within hours after they hit. So, working with an experienced agent could mean learning about a house the moment it hits and in some cases even before the home goes live. Your agent should be someone you know you can trust, an expert on real estate in your area and neighborhood, and very proficient in working with buyers of your experience.
Many lists that talk about the homebuying experience have you find a Lender before you find a REALTOR. However, it makes much more sense to focus first on the best agent and then leverage your agent's lender connections to find a loan officer that will be easy to work with, will be more accessible after hours and on weekends, will give your agent an editable pre-approval letter to tweak for offers and a lender who has access to better appraisers and will be favorably viewed by sellers and their agents.
When interviewing agent's be sure to ask about and find an agent that does NOT do Limited or Dual Agency representation where the same agent represents both buyers and sellers at the same time on the same property. To learn more about Buyer's Agents, be sure to check out www.AgentsThatWork4U.com. If you are looking for a property in the greater Indy area then also be sure to learn About Mitch as a Buyer's Agent. If you are looking to buy outside of the greater Indy Area the Mitch can typically connect you with a greater local Buyer's Agent in your new community.
Step 3: Shop for a Loan and Get Preapproved
After you have gotten your finances in order, let your Agent connect you with a great lender or mortgage broker. Working with a trustworthy lender will help you determine what type of loan you'll qualify for and how much home you can actually afford. While it’s important to know you are getting the lowest interest and best terms, one of the advantages in working with your Agent's lender is they want to keep your Agent happy to continue to have the ability to help the Agent's clients. This means the lender's will view your loan as if it's one 10, 20 or more connected loans versus just one individual loan!
If you also have a lender in mind for a second opinion and would like to see if this lender might be a good fit for your home mortgage loan then Mitch also gives you 10 Questions To Ask ALL Lenders, BEFORE YOU LET THEM PULL YOUR CREDIT! Comparing the lender's answers, with the desired list of answers Mitch gives you will let you eliminate lenders before they pull your credit. Lastly, avoid internet lenders and online lender services like Lending Tree.com that pull your credit multiple times since doing so will actually lower your credit score which could end up costing you the most competitive interest rates and terms.
Step 4: Map Out Your Criteria And The Selling Price of Homes in The Areas That Interest You
Now that you have your finances figured out, and are pre approved for a loan, it’s time to begin your search for the home! With a plethora of online home-buying tools at your fingertips, it’s relatively easy to map out different types of homes and neighborhoods and find what is right for you. If you have a preferred location or neighborhood, Mitch can share they typical List to sales price ratios of homes in that area to confirm whether an area is within your budget.
Make big decisions like urban versus suburban settings, an estimated property size and neighborhood requirements before you start to physically look at properties. This will save time and energy for you. Mitch can create very detailed searches that will send you email alerts when places that meet your criteria to your own personal and private website portal. There you can check out all of the details and leave questions or comments for Mitch that will help him refine our your searches to make it easier for you to find the perfect place.
Start by telling Mitch about what you would love to have in Your First Home
Step 5: Find Your Home
This is the fun part, where you get to visit open houses, tour homes, make notes, and really hone in on your perfect dream home! Make sure you keep detailed records of the homes you visit, noting things you liked, didn't like, pros and cons, etc. Taking pictures can also keep your memory fresh.Buying a home in Indianapolis? Start searching for your dream home today!
Step 6: Make an Offer
When you find your favorite home, work with your agent to determine a competitive but reasonable offering price. You'll want to choose a number that is comfortably within your price range but competitive enough that it won't cause the seller to immediately reject your offer.
Step 7: Get an Inspection
Nothing's finalized yet, so make sure you're getting your money's worth! Ask your real estate agent to recommend a trusted home inspector to walk through the house and check for any potential defects or problems. If necessary, you can request that the seller repair any issues you find.
Step 8: Review Your Contract
Before you sign any paperwork, it's important that you carefully read over the contract with your agent or lawyer to ensure there are contingencies - that is, if something falls through with your mortgage, you aren't still obligated to buy the home.
Step 9: Finalize Your Mortgage Approval
Work with your chosen lender to submit your mortgage application, review predicted closing costs, and have your home appraised. Common closing costs include attorney fees, title insurance, appraisal fees, home inspection fees, courier fees, government recording fees, and taxes.
Step 10: Close and Pay
It's time to close! Meet with your agent, lender, and the seller to finalize the paperwork, sign your contracts, and pay your down payment and closing costs. Finally - the keys to your new home!
Still Have Questions or Ready to Get Started?
If you're thinking of buying a home in Indianapolis, then it's time to contact Mitch Rolsky. We're your local real estate experts. Not only can we answer all your buying questions, we can help connect you with the resources you need to make an informed decision so you're sure to find your dream home at just the right price. Take a look at some of the home buying resources we have to offer.