The Home Buying Process

The ARGUS H.O.M.E (Home Ownership and Market Education) initiative is dedicated to providing opportunities to connect communities to equitable housing opportunities and to the support of work that addresses the wealth gap closure within communities of color throughout the region.

Now that we are the last quarter of the year be reminded that preparation before any career move, major life decision, familial change, or investment is vital. Understanding what and who is needed and how it can affect you is information that is invaluable. Often, I am asked by first time home buyers interested in purchasing their first home, “where do I start?” Then there are those empty nesters that may be downsizing or relocating and no longer understand the buying process because the process of selling and buying has changed dramatically over the years. Lastly, in this entrepreneurial age, many questions are asked how to purchase investment property and gain generational wealth.

It all starts with understanding the process and buyer or seller education. Following are the 6 steps to obtaining homeownership:

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Get Pre-approved:
Your credit score is important in this process. The better your score the more options you have in loan type selection, down payment, and interest rates. There are banks, credit unions and mortgage companies that offer all types of programs to help you reach your purchasing goals. Research the market and compare rates, terms, and fees before deciding the company you choose to apply with.

Having a pre-approval is vital in the process because it let’s you know the amount of loan you can qualify for, monthly payments and terms. It is also a negotiating tool, because all sellers want a ready, willing, and able buyer to present contracts.

Realtor Selection:
Selecting the right realtor can reduce buying frustration. A qualified realtor is the expert that will guide you through the process, protect your interest. There are many forms, reports, legal documents, and disclosures. A knowledgeable realtor will help you avoid costly mistakes and delays in closing. Also, there is a lot of real estate jargon that you may not understand, and a real estate professional can guide you through that.

A good realtor will walk through property with an unbiased opinion and meet objectives that can help you stay within your budget. Realtors also have expanded search power. They use a Multiple Listing Service (MLS) that can locate active listings with your specific criteria. Realtors can negotiate pricing, educate you on stats of particular areas and provide information on recent sales.

Home Selection:
Prepare of list of the amenities, location, and expectations you have for your home purchase. This process often become emotional and frustrating, and a good realtor can help you overcome those feelings and obstacles that may come during the process. The realtor is the expert and should remain focused on helping you achieve your goal.

Negotiation:
Once property is selected your realtor will analyze it with help of MLS. Search for approved comparable properties with similar size, amenities, and condition to establish a good price point to submit offer for purchase.

Prepare for Closing:
The loan officer plays a giant role in getting you to the closing. He will review loan documentation and appraisal. Also review building, gas, termite, municipal, and other inspections that or required or needed. In addition, contact hazard insurance and finalize home warranty if appropriate. After final approval you will receive rate lock to ensure that your debt-to-income ratio is not affected prior to closing.

Closing:
It is best practice that a final walk through of your property is done prior to closing. This generally takes place with 48-72 hours prior to closing. This walk through is to confirm that the property is in the condition is was at time of writing contract. This is also a time to check on any repairs or improvements that were done during inspection period to confirm they are complete. In Missouri, closings are held at Title Company, and they perform title search to ensure there are no clouds on tile, order survey (if needed), prepare settlements statements and serves as closing agent for transaction.

For more information on the home buying process or to obtain education, there are several non-profit organizations that offer home buying courses and credit counseling to get you prepared for this process. Following are a few in the St. Louis Area:

1. Beyond Housing – www.beyondhousing.org
2. Justine Petersen Housing – www.justinepetersen.org
3. Better Family Life – www.betterfamilylife.org

If you have any questions regarding this process, you can contact Janice “The Real” McCoy at Radius Realty 904 S. 4 th St., Suite 201, St. Louis, MO 63102, phone 314-337-9466 email: janice@radiusrealty.com.