If you are in the market for a new home, the process can be daunting. Buying what is likely to be your biggest purchase to date, along with a mortgage, takes tremendous effort for someone who is new to the process. A home is a measure of pride to the new buyer, having a place to hang their hat that they no longer have to pay rent on. To be sure, buying a home should not be taken lightly and your current financial situation should be considered with the help of a quality real estate agent.
Personally, I remember buying my first piece of property - a condo in a suburb of Portland, OR. Having been a tenant for many years, the home buying process was foreign to me. I found an agent who was remarkably patient with me, showing me numerous houses per week until I found the right match for me. Since buying my first home, I've since bought and sold many homes and can assure you the process gets easier with time. Here are a few things I've learned as a home buyer:
- Find an exceptional real estate agent: Buying a home involves negotiation, knowledge of the local real estate market, understanding if a deal is best for a buyer, working with many parties (such as title companies and loan officers), and bringing a transaction to the closing table. A tremendous amount of weight rests on agents to do what's best for their clients, which is why it's best to find a great agent in your area. Once you have found a real estate agent you like, meet with them and ask them several important questions to understand how they operate and to protect your best interests.
- Work with a Loan Officer: Once you have an agent you'd prefer to work with, the next step is to find a Loan Officer if you need financing for your home. Your agent can likely refer you to someone they work with, but there are other options available to you in your community. Applying for a loan to determine if you can afford a mortgage payment is a key step toward your purchase. A Loan Officer will take your application, review your financial situation & advise you on the best loan program that you qualify for. If you qualify, they will likely issue you a pre-approval letter for you to include in an offer to buy a home.
- Understand the loan program that's best for you.
Your Loan Officer should advise you on the best program for you, based on your credit score, employment and income, and the loan amount you are seeking. FHA loans & Conventional loans are very common for first time home buyers.
- VA & USDA Loans: If you are a Veteran of the US Armed Forces (eligibility requirements here ) or live in a rural area (geography and income requirements here
) you may qualify for a loan which doesn't require a down payment. This can be beneficial for a first time home buyer who may be new to their career or may not have a significant down payment set aside. If you are a veteran, thank you for your service!
- Getting to the closing table: In the military, we have a phrase which applies to the home buying process as well - "hurry up and wait." You may find that your home buying experience is a combination of hurry and waiting, as so many factors are in play with a real estate purchase. Patience is key, and work with your agent to get to the closing table and into your new home.
Lastly, enjoy the process. Buying a property doesn't happen often for most people, and the outcome of owning a new home is a great adventure. The stressful moments in the process will eventually fade, so do your best to enjoy it. For me, buying a home meant a place to raise a family - find what it means to you, and embrace it.