Buying a house is not as easy or difficult as many people make it out to be. It can be a horrendous experience, an “I will never do this again experience”, possibly a “We got through it and next time we will know better”, or last but not least “This wasn’t so bad, we can do it again when we need to” experience. Your remarks after your closing will depend upon a lot of variables we will now begin discussing.
The most important issue you face is choosing the support team to help you buy your home. This ranges from family (they alone can drive you crazy or be an incredible support), to your choice of a REALTOR®, lender, title company and building inspector. These people collectively or individually will make or break your transaction. Additional vendors that may be required are termite, radon, and sewer line inspectors.
I rarely recommend the use of a lawyer except in special cases. When lawyers get involved, there’s almost always trouble. But sometimes they are a necessary evil. There is an old saying that “Lawyers don’t settle issues they litigate them.” (Riddle: Why do lawyer’s offices smell like garbage dumps…? Answer: Fill in whatever you want!!)
Making the decision to consider buying a house is relatively simple. You no longer want to rent, you want to move out of your parents’ home, you just want to upgrade your living experience, etc. All are legitimate reasons for moving forward in the home-buying process. My personal choice is that you are buying a house to lower your federal taxes and increase your net worth. Once you have made the decision to buy, regardless of your reason, your stress levels will go up. Your organization skills need to get better to handle the situation effectively.
Steps in the home-buying process are as follows:
- Collecting your financial date (click on Getting a loan)
- Choosing an agent (click on Picking a agent)
- Choosing a lender and reviewing different loan programs (click on Loans available to you)
- Setting the parameters of your search (click on What do I get in a house for what I can afford)
- Looking at properties (click on Looking at houses…what am I looking for in a house)
- Writing a contract and getting it accepted (click on Writing a contract)
- Having the home inspected (click on Inspections you should have)
- Getting the title company the required documentation. (click on what title company or lawyers do)
- Keep up with the lender and their required documents. (Click on Squeaky wheel gets the oil!)
- Loan commitment (Getting a loan)
- Final walk-through (Final walk-thru)
- Closing and possession (Closing and possession)
The time it takes to buy a home varies, but for our purposes we will begin our timeline from the moment you have collected your financial data and selected your REALTOR®. The purchasing time can range from as little as 25 days to as long as it takes you to find the house. Once you have the house under contract, closing has to take place within 60 days or the time limit on many of the required documents runs out and you’ll have to start on them all over again. If you are not familiar with lending options, your agent should be and you should rely on their experience. If they don’t offer multiple lending options, you might consider reviewing your choice of REALTORS®.
Picking the lender and the right loan should not take more than a day or so especially with your agent’s help. It all depends on you. You’ll need to provide the necessary information for your agent to review your salary, job and credit history. From that information, your agent can determine the correct loan, sale price parameters, and contractual requests necessary for you to get the loan from there, you can work to determine other variables, such as if you’ll need closing costs paid by the seller included in the contract and possible time limits for when the closing can occur. This can be done in a day if you are available and cooperative.
Now you know your budget and are ready to look at properties. From the time you seriously start looking, you should be able to find your new home within 30 days… Sometimes you’ll find your perfect home the first time you go out looking!
From the time a contract is written until it is either accepted or rejected can be anywhere from one day if the seller is the owner of the home, to several months if it is a short sale that needs the lien holder’s approval.
Once the contract is accepted it can be closed in 30 days or less. In this 30 day period, it takes about 1 week for the necessary inspections to be completed. It could take 10 days or less to negotiate repairs to the house, if any, a couple of hours with the lender for application and turning over the documentation they want and need, 30 minutes for your final walk-thru and 1hr for the closing.
If you follow the suggestions above you will have as smooth and safe a transaction as possible, but it will still be stressful. You do not go out and spend thousands of dollars and say “Oh boy I feel good about that!” Think of how stressful you find buying a car and multiply that by a factor of 10. It’s your job to minimize your stress levels and you can do that if you’re prepared. So do it!
If anyone ever told you that buying a house was fun, they are either lying or have never done it.
Lastly, minimize who you tell that you are buying a house. Everyone you tell will immediately become a real estate expert. They will want to warn you of all the possible dangerous traps that you will surely fall into. And how to avoid them. The problem is half of what they say is correct, but half is not and you do not know the difference. It’ll drive you nuts! So, tell your spouse, your parents and some very close people in your life, but no-one else. You can invite your friendly real estate experts to your house-warming party.