If you're a first time home buyer and don't know the first thing about buying a home, we can help! There are a few things that you need to know before going out shopping for a home. We have listed those things here so you can understand the process and help you accomplish your goal.

1. Go to a Lender and get pre-approved for a loan. You may want to talk to a few lenders before deciding which one to use for a home purchase. Your lender will do a credit check, verify your income and let you know how much home you can afford, what type of loan is best for you, at what interest rate you qualify for, how much your payments will be and if you will need a down payment and/or closing costs paid by the seller.

2. Hire a Real Estate Professional that will keep your best interests in mind (see our article on how to find a good Real Estate Professional) and tell him/her everything you are looking for in a home. The location, price range, size, number of bedrooms and baths, garage size if any, age of the desired home, if you are willing to do repairs or fixing up, how much of a down payment you will be making, when you want to be moving, are all important details that your Real Estate Professional will need to know before doing a search for homes that may fit your needs.

3. Start house hunting. Look at a lot of homes before buying and compare. One of the most important things to consider when you find a home that interests you is "RESALE". Ask yourself "How easily will this home sell if I needed to sell it?" If you buy this home, and in a few years need to sell, will this home sell quickly or is there something about the home or location that will keep it sitting on the market too long. If you are planning to do improvements on the home don't over do it unless you can do the improvements yourself. Of course this depends on how much you will be paying for the home. Sometimes homeowners put too much money into a home and therefore are unable to get their money out of it when it's time to sell.

4. Be ready to make an offer when you find the perfect home. If you find a home you don't think you can live without, one that is in really good condition, in the perfect location, just the right amount of space, be prepared to move on it. Your Real Estate Professional will do comparables of sold homes in the neighborhood to determine the fair market value of the home to help you decide what a good price to offer would be. When you find such a great home, it is possible that someone else has found it also, so you may be in competion with someone else who wants to buy the same home you do. If it appears that you are the only buyer interesed, you can start low, but not so low that you risk insulting the sellers. If the seller doesn't like your offer they will write a counter offer. On the other hand, if you suspect that others will be making an offer, you could make your offer for the listed price, or close to it, or even more if you are asking the sellers to pay your closing costs.

5. Earnest Money. You should have enough cash on hand to put up Earnest money. Usually about 1% of the selling price. Your earnest money will be put towards the purchase price of the home at closing. On a $200,000 home this would be $2,000. This shows the sellers that you are a serious buyer. But, if you should back out of the deal without a good reason, the sellers will most likely be able to keep your earnest money.

6. Get a home inspection by a professional inspector. Once your offer has been accepted and all the documents have been signed you will have 10 business days to have the home inspected. The cost is anywhere from $200 to $400 here in Arkansas which you the buyer will have to pay for at the time of services rendered.

7. Get everything in writing. If it's not in writing it is non-existant. Don't assume anything or take anyones word for assurance. Have your Real Estate Professional put it in writing for you and get written approval of all agreements.

8. Closing...The glorious day the house becomes your home. The closing is usually done at the Title Company that does the Title search and provides the Title Insurance services. Both the Buyer and Seller attend to sign all documents including the Buyers signing of the loan documents. The Lender will make sure the funding is there for closing so that checks can be issued to the appropriate parties. Once this is done you will be in possession and handed the keys to your new home!

 

We sell homes, condos, land, and all types of investment
or commercial property in NW Arkansas

David M. Simpson
RE/MAX Associates
4285 Shiloh Drive - Suite 205
Fayetteville AR 72703

(479) 200-9914
Email David

For sale by owner