Where To Begin... The 1st 10 Steps

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 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.

There are many grants, special loans and down payment assistance programs available to borrowers looking to buy their first home. These first-time home buyer programs are typically offered by Indiana State agencies and are usually available through Mitch's preferred lender. Since the government's fiscal year starts July 1st and ends June 30th, new funds for these programs are typically available after July 1st and often times have been exhausted by the early spring time. Read more about the advantages and disadvantages of these programs. 

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. When Mitch shows properties to buyers he prompts the buyers to focus on what they love and hate about a place vs what they like and dislike! Mitch also asks buyers to rank the top 3 places with the most desirable being #1 etc. The combination of what you love and hate, contrasted with which houses you rank as #1, #2 and #3 allows Mitch to gain some clarity on your priorities. For example if the only real differences between your top two places is that you loved the kitchen in house #1 and loved the backyard in house #2, it's likely the kitchen is more important to you then the back yard!

Step 6: Make an Offer

When you find your favorite home, work with your agent to determine a competitive but reasonable offering price. In an ideal scenario the listing agent did a comprehensive market analysis (CMA) to determine the correct list price. However sometimes the list price is more about what the sellers want for the property versus what the place is actually worth in the current market. Some list agents won't complete a CMA and instead will set the list price low hoping to receive multiple offers that will allow the place to sell for above list price! So, your Buyer's Agent should do a CMA as if they were listing the place themselves to advise you as to what the place is both worth and what it should appraise for. Setting the value is not an exact science though, so typically great agents will share the value, along with 2%+/- amounts. Typically in Seller's markets the value is on on the plus side and conversely during buyer's markets the values tend to be on the minus side of the numbers! Once you have clarity on what the property is currently worth then 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! Most states today have seller disclosure forms that require the seller to disclose any known defects and most states have wording in the law to try to define what is a defect. While no home will likely be perfect, even a home that's brand new, the goal of an inspection is to identify defects that could impact the inhabitability or safety of living in the property. While some sellers and listing agents will focus on the notion that nothing is perfect, and so it's reasonable to tolerate or accept defects uncovered as part of an inspection. Mitch's perspective though is that because Sellers are supposed to disclose defects, and Seller's could have had their own inspection done prior to listing the property, in order to disclose any defects that the seller is unwilling and/or unable to address, buyers enter the inspection process expecting to find a reasonably defect property! Note: Inspections on homes that have been previously occupied typically don't focus on cosmetic items and outside of new construction purely cosmetic items would not typically be asked for as part of an inspection! 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 true defects that 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 you understand what you are are agreeing to do and by what dates and that the purchase agreement includes all of the necessary contingencies. Mitch refers to contingencies as "Get Out Of Jail Free" cards! These are items where if for example you can't obtain a mortgage, the property does not appraise for the purchase price, there are items in the Homeowner Association rules and regulations that you can't live with or there are true defects discovered during the inspection, where the seller is unwilling or unable to correct the items, then in theory you should be able to walk away from the purchase with all of your earnest money coming back to you.

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! Right before closing you'll put all of the utilities into your name effective the day of closing and you will arrange for the wire transfer of the funds needed for closing. Then the day of closing you will do a final walkthrough to see that any needed repairs have been completed and to confirm that the house is in the same or better condition from when you last saw the place. Then you will 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!