The 5 Step Process to Buy Your Own Place

I’m going to share with you the 5 Step Process to Buy Your Own Place.

A friend of mine just called and wanted help understanding how to buy her own place.

I thought it would be good to share the conversation with you too, or write it down in case she wants to come back and remember what we talked about.

Let’s Begin!

Step #1 To Buy Your Own Place – Get a Prequalification (Prequal) Letter From A Lender/Bank/Loan Officer

Step #1 is to find out if you can buy, and how much you can afford, and what your monthly payment would be if you did.

The only way to do that is to talk to a loan officer.

They are trained to check your income and your credit history and see if you qualify for a mortgage loan.

They also know what kind of loan options are available.

For example, my friend who is a veteran, qualified for home loans with zero down payment (he doesn’t have to put any cash down).

If you’re not in the military, you probably have to put cash down.

The standard amount is 20% of the purchase price plus closing costs that range from 1% to 3% of your purchase price.

A loan officer can explain all of this to you.

Once you get your prequal letter, you are ready to work with a realtor.

Step #2 Work With a Realtor To Find Properties In Your Price Range

The next step is to get a realtor to help you look for properties.

They will know what is available in your price range, and they can arrange for you to view available properties.

They can also help you understand zoning, the neighborhood, the layout, the amount it would cost to renovate, and so on.

Step #3 Make an Offer

Step #3 is to make an offer when you find a place that you like.

Your realtor will help you with this, but they don’t necessarily know what the best price to offer is.

You do.

Our realtor was very good and gave us suggestions.

The last property we purchased he said to offer low, which we did.

However, it was our decision to not bargain.

We told the seller they had to take it or leave it.

We had a rental property lined up just in case they didn’t accept our offer price.

Our realtor understood our wishes, and you have to know what price you are willing to pay.

Only you can set your real price, not your realtor.

If you have a great realtor like we do, then they will convey your wishes to the selling party in the most effective way possible.

Step #4 Do Your Due Diligence, Only Close The Deal If It Passes Inspection And Your Requirements

Do a thorough inspection.

This will require time and money on your part but it is important you know what kind of a property you are purchasing.

If you are not happy, you can ask the seller to fix the issue, you can back out of the offer.

Our 2nd property we purchased had a broken floor tile and we couldn’t tell if there was further damage underneath.

So we required that they fix it or we wouldn’t close (we wouldn’t buy it).

They offered a credit which we didn’t take because we couldn’t ascertain the full extent of the repair just from the inspection.

They didn’t want to fix it, and we had a week or 2 of uncertainty on whether we would close, but in the end they did fix it.

Step #5 Close The Deal

The final step is to actually get the rest of the money you promised to pay and get it to your loan officer so that they can process the deal.

Be sure to get your cash ready on time.

For our first purchase, it was a process as I had to take money out of many different accounts to have enough to close the deal.

Conclusion

This is the 5 Step Process to Buying Your Own Home.

I’ve used it to purchase 3 properties so far, 2 of which we lived in as our home.

Basically you have to just do it and you will learn along the way.

One of the biggest factors to consider is how much you will pay once you own your home.

Be sure to thoroughly understand all of your costs.

Your banker will be able to tell you what your mortgage payment will be, and he can help you understand how to make your payment more affordable.

Just because the bank says you can afford it doesn’t mean you really can afford it.

Ask lots of questions of your banker before you even get started!

Good luck and please share this post with your friends and followers!