We are kicking off a new series called “What to Expect'' where we will be talking through the homebuying process from start to finish. What to expect and how to prepare for every step in the home buying process. Today, we will be starting from the very beginning: how to start the homebuying process. Where do you even begin? What should your first step be? Let’s dive into our recommended process for where to start when buying a home.
Step 1: Assemble Your Team
The very first action item in the homebuying process is assembling your team. Your team includes a great real estate agent and a great lender. Your lender is just as important as your realtor and like we’ve said before, lenders are our most important co-workers. We as the real estate agent will work hand in hand with your lender through the homebuying process. Your agent and the lender are going to connect you to other resources you may need and so you need to be able to trust their judgment and trust that they will not only do their job well but work together well as a team. And if you choose to work with a poor lender or a poor realtor for that matter, the cost could be getting the home you desire.
Finding a realtor.
Ultimately, it doesn’t matter which member of the team you find first. However, we personally recommend starting with an agent because they act as a quarterback of sorts throughout the homebuying process. If you are in the DFW and looking for a trusted real estate agent, we’d love to work with you. But if you aren’t in the metroplex, you can still reach out to us and we can help you find an agent in your area. We can reach out to local agents in your area, vet them, and then provide some recommendations to you.
There are a few essentials to look for in the realtor you choose to work with. While looking for an agent that has geographic competence in your area is important, it is not the most important thing. Other things to look for in your agent include their responsiveness and ability to communicate in a way you understand. Also, their ability to handle stressful situations, problem-solve through obstacles that may arise and negotiate on your behalf. Your agent’s ability to manage situations and troubleshoot any problems will be what you will value most in your agent.
Once you find a realtor you want to work with, reach out to them to make initial contact and let them know you are interested in getting started. This is not an official commitment to working with them. This initial conversation is a way to share your goals, your timeline, and your budget for a home. When working with us at Haven Realty, this is also when we will set a follow-up meeting to review what we talked through in our initial contact and walk through our Homebuying 101 curriculum that we developed for our homebuyers.
Finding a lender.
If you don’t already have a realtor that you want to work with, your real estate agent can recommend one to you. Typically a homebuyer will reach out to a lender between our initial contact and before we meet to review. You do not have to choose a lender before meeting with your realtor, but it does need to start before we can go look at houses together.
When choosing a lender, look for someone who is proactive, a problem solver, and someone who will stick to the timeline. A good lender can make the homebuying process incredibly smooth and a bad lender can make the process incredibly difficult by not following up or meeting deadlines. Because the working relationship between the lender and realtor is so vital as well, it can be helpful to get some recommendations from your realtor of lenders they may often work with. When contacting lenders, we would recommend contacting no more than three as this may cause more confusion and lead to more stress than necessary.
Your initial contact with your lender should look similar to the initial contact with your agent. It should be informative and give you a sense of whether or not they are easy to interact with, communicative, and easy to understand. Your real estate agent is not going to be in the nitty-gritty of getting qualified for your loan, so it’s important that your lender is able to communicate the financials in a way you understand. Find a lender that is a good fit for you.
Step 2: Pre-Approval
When you begin working with a lender, they will ask for basic information to get you pre-approved. How much do you and your partner earn? What kind of debt do you have? What do you do for a living? It is vital that you be extremely honest with your lender. If you aren’t upfront, it will be found in the underwriting process and the cost could be not getting the house you’re under contract for. Be candid and they will direct you down the right path.
Rather than just telling you what you are approved for based on income, a great lender is going to start with your monthly budget and discuss what you can afford according to your household monthly budget. Your monthly mortgage budget is broken into four parts: the principle, insurance, taxes, and interest. Your lender will look at how much of a mortgage payment you can afford and this number will determine the budget for your house.
Step 3: Homebuying 101 Curriculum
So, you’ve assembled your team and applied for a loan to get pre-approved. Now it’s time for Homebuying 101. This is specific to Haven Realty Group and something we’ve created for our clients. However, a good realtor should walk you through the process in some way. We review the entire process from start to finish with the goal being for you as the homebuyer to have as much understanding of the process as you can before we begin.
Once you’ve met with your realtor and agreed to move forward, you will sign an agreement with your agent. This binds the agent to act in your best interests, gives the agent the right to represent you, and outlines any agent fees. Once the agreements are signed, the fun part begins… time to start looking for a house! Which we will cover next in our series of What to Expect.
If you’re ready to buy now, give us a call! We’d love to start the process of buying a home with you.
Until next time,
Brianna and Keelie