Buyer Guide for First Time Buyers
Purchasing a home for the first time is an exciting process. It can also be lengthy and somewhat overwhelming. To simplify the home-buying journey we have broken it down into steps. At each step Melody is available to help you understand the process and guide you forward. Some of these steps can happen concurrently. Every purchase can have unique elements and your situation may vary from someone else’s, but the following steps cover the key elements to be aware of and consider.
Many first time buyers have little or no experience with real estate professionals. Finding an advisor and advocate you trust and rely upon makes a big difference in finding the best value and home for you. When you interview a prospective agent, ask about their experience, knowledge, and reputation.
Choosing Melody as your agent ensures you will have a dedicated advocate to help make your purchase a success. Here are the main steps:
Evaluate your life and finances:
When you think it is time to start seriously looking to purchase a home, take a moment to look at your financial situation and crunch the numbers to see if this is the right time for you to buy. If you have financial advisors, talk to them about what you are planning. For example, there could be significant tax advantages in owning a home and your accountant or advisor can:
- Calculate a monthly mortgage payment you can afford. Use our mortgage calculator)
- Create a budget for monthly homeowner expenses (home owners insurance, Home Owners Association fees, property taxes, general maintenance, etc.)
- Check your credit report and if there are areas of improvement, make changes to improve the score.
Do your homework:
Research your prospective new neighborhood if you don’t live there already. See our city and towns section for information on different areas in Sonoma County. Melody can provide a great deal of information and insight.
Start preparing for the loan process by determining where your down payment and closing costs (see section on closing costs) will come from. You will likely need to gather your tax returns for when you apply for a loan.
- Research the area where you want to live.
- Determine how much you can spend on your down payment closing costs.
- Learn your rights as a homebuyer and borrower.
Shop for a loan:
Shop for the best interest rates and loan terms. See our Mortgage Section for more information on what kinds of questions to ask potential lenders. As there are fees for every part of the process, ask for a good faith estimate from potential lenders and compare apples to apples. Make sure you understand everything you’re paying for.
- Learn Mortgage Basics.
- Shop around for the best loan product
- Get pre-approved.
- Discuss tax implications with your accountant and/or financial planner.
Find a house:
Finding the right home for you is a clarifying process. What you end up buying may not be what you initially imagined. Begin by using our search function to look for homes you would like to see. We can also set you up on an automatic email list so you can receive listings direct to your email as soon as they come on the market (see search) When you have found some you are interested in, we will go out and see them in person.
- Determine size of house, number of bedrooms and bathrooms and location
- Narrow down your choices and see the houses again.
- Make an offer.
Make an offer:
Once you have found the property you want to buy, we will come up with an offer that is right for you. By comparing recent sales prices, how long the property has been on the market, if there are competing offers and how motivated the sellers are, we can come up with a clean solid offer. The negotiating begins. This is one of my specialties.
- Initial pages, dot I’s cross t’s and sign on the dotted line.
- You should also have a pre-approval letter from your lender.
- Let the negotiations begin.
The escrow period is when you are in contract to buy and perform your due diligence to make sure you are getting what you want. Here you evaluate disclosures, your loan is processed and approved, you perform inspections, check out the neighborhood, be sure there is clear title, and more. During the escrow period, we will have inspections on the property, an appraisal from your lender and finalize the loan.
- Get an appraisal.
- Perform home and other inspections.
- Receive a title report and evaluate the title.
- Get homeowner’s insurance quotes and pay the premium at closing.
- Evaluate the public record, permits violations, etc.
- Reveiw disclosures and all aspects of the home and neighborhood.
- Do a final walk-through of the house.