7 Steps to Your First Home

Step 1: Decide to Buy

If you’re renting and have a stable job with some savings, and a credit score in the mid 600 range, you can likely qualify for FHA or conventional ­financing at historically low rates. ­The key question you need to consider is, of course, why are you still renting? Th­ink about it for a moment. If your reason is fear, then it may be time to let go of that fear and focus on the facts of home ownership. Here is one example. Fear: I can’t afford to buy my dream home. Fact: the best way to get closer to buying your dream home is to buy your ­first home.

Very few people can afford to buy their dream home when they buy their first home. In fact, according to the National Association of Realtors®, 69 percent of first-time home buyers in the United States compromised on some features of their first home. So you make some compromises, buy your first home, and start building equity. Th­is approach takes you further and faster down the road to being able to own your dream home than if you hadn’t purchased a home at all.

Step 2: Hire Cristina Murphey

How about putting a champ in your corner? Cristina and her team will help you by:

1. Educating you about the local market. 

2. Help you analyze your wants and needs.

3. Help you identify homes that fit your criteria.

4. Coordinate the work of other needed professionals.

5. Negotiate on your behalf.

6. Check and double-check paperwork and deadlines.

7. Solve any problems that may arise.

Step 3: Secure your Financing/Mortgage

It’s normal to ask how much you can aff­ord, and you might begin by considering your monthly rent payment. You’ll also need to factor in all of your expenses and then revisit your income. Lenders use fairly strict guidelines and formulas to dictate how much you can spend on your mortgage payment, which typically includes PITI, or principal, interest, taxes, and homeowner’s insurance. And if you fi­nance at less than 20 percent down, you’ll likely need to pay PMI or private mortgage insurance as well. It’s a lot to think about. Ultimately, keep in mind that your lender will preapprove you for a certain amount, but YOU will decide what you’re comfortable paying every month. And you always want to leave room for the unexpected costs and opportunities— from furnishing to repairs to gardening.

Be sure to follow these six steps to ­financing your home: 1. Choose a loan officer. 2. Make a loan application and get pre-approved. 3. Determine what you want to pay and select a loan option. 4. Submit to the lender an accepted purchase offer contract. 5. Get an appraisal and title commitment. 6. Obtain funding at closing. And remember, you don’t need to save up a lot of money for the down payment. A conventional mortgage can require as little as a 5 percent down payment, and there are even some ­first-time buyer programs and FHA loans that require even less. And once again, only you can decide what you can afford.

Step 4:  Find your Home

So you are preapproved and ready to begin your search. But how or where do you begin? Th­e best thing to do is consult with Cristina Murphey to more accurately pinpoint the home you are looking for. Th­is is likely the biggest investment you’ll ever make, and you’ll need to create a criteria for a home that meets all of your important needs, and as many of your additional wants as possible.

Some questions you might ask yourself include: • What do I want my home to be close to? • How much space do I need and why? • Which is more critical: location or size? • Would I be interested in a fixer-upper or a new home? • How important is home value appreciation? • Is neighborhood stability a priority? • Would I be interested in a condo? • What features and amenities do I want? Which do I really need? You’ll learn as you look at homes, it’s wise to review your priorities along the way. And Cristina is experienced and can help expedite the process.

Step 5: Make an Offer

Congratulations! So you’ve found a home you love. Now you need to make a compelling o­ffer. There are three basic components of your purchase o­ffer are price, terms, and contingencies. Price is obviously the dollar amount you are approved for, willing, and able to pay. Terms cover the other financial and timing factors that will be included in your o­ffer. Contingencies are clauses that let you out of the deal if the house has a problem that didn’t exist or that you weren’t aware of when you went under contract. Contingencies specify any event that will need to take place in order for you to fulfill the contract.

Okay, it can get admittedly confusing here. So look to Cristina to guide you. Keep in mind, the right price should reflect the fair market value of the home you want to buy. Cristina’s market research will help guide this decision.

Step 6: Perform Due Diligence

Just because you love a particular property doesn’t mean that it’s perfect. In fact, this is where reason has to trump emotion. And you’ll have help here, too. You’ll need to have a property inspection (which we highly recommend you attend) that will hopefully expose all the issues a home might hide. Th­is way you’ll know exactly what you are getting into before you sign closing papers. Your main concern is the possibility of structural damage. Th­is can come from water damage, shifting ground, or poor construction when the house was built. And remember, don’t sweat the small stuff.

It’s the inspectors’ job to mark everything discovered, no matter how large or small. Th­ings that are easily seen can be overlooked. In case you have a big problem show up in your inspection report, you should bring in a specialist. And if the worst-case scenario turns out to be true, you might want to walk away from the purchase. Again, this is your home, so work with Cristina and make the best decision for you. And remember, if your home passes inspection with flying colors, you’ll still need to buy a homeowner’s insurance policy to protect against loss or damage to the property itself and against liability in case someone sustains an injury while on your property.

Step 7:  Closing on your Home

You’ve made an o­ffer and performed due diligence, which means you’re now in the “home” stretch, pun intended. But you have a few preclosing responsibilities, and these include staying in control of your credit and ­finances, ­first and foremost. You will also need to keep in touch with your agent and lender and return all phone calls and paperwork promptly. You might need to communicate with your agent at least once or twice a week and verify with your lender that all mortgage funding steps are completed.

If possible, conduct a final walk-through of the home with your agent as well. And finally, be sure to con­firm with Cristina, home insurance professional, and lender that you have the settlement statement, certifi­ed funds, and evidence of insurance lined up prior to closing.