Overview of The Home-Buying Process
So you've decided you're sick and tired of paying rent. You're going to take the big step into home ownership. You start spending nights searching the internet for properties you might want. You see a home you like on Zillow or Trulia. You call up a random Realtor or the listing agent and decide to go look at it tomorrow. Maybe if you like it, you'll put in a low-ball offer and see what happens, right?
Although I admire your motivation to jump right in, buying a home is a process. It can be a long one, and it's only made longer by not completing the steps to home ownership in order. But I promise you, if you follow these steps in the right sequence, not only will you be in a house much quicker than you think, but you'll be able to buy more house for less money down AND save on your monthly payments.
Step 1 - Plan Your Downpayment
It's a common misconception that you need to put 20% down to buy a house. In fact you may not need to put down anything at all.
A great thing about buying in Tampa is that both The City of Tampa and The State of Florida offer programs to help first-time home buyerswith down payment assistance. (Check out this video for more info)
Regardless of where your down payment money is coming from, it's important to thing about this early in the process because it has a chain effect in your process. The amount you're able to put down will affect how much you can finance, how much you can finance will affect what home you can buy, etc.
Step 2 - Get Pre-Qualified/Approved
Combining your down payment plans with your income and assets will let a lender figure outhow much they can loan you towards your purchase.
Once you have a pre-qualification / approval you'll be able to confidently put an offer on a home.
Step 3 - Begin The Home Search With a Realtor
A Realtor will help show you everything available on the market and represent you throughout your process. They can help you with every step in your process, and the best part? Our services are free to buyers. Sellers pay our commission.
There are plent of great Realtors in The Tampa area (including the author of this blog, hint hint, wink wink, nudge nudge :)
Step 3 (Cont.) - Make an Offer on a Home
Once you've found the perfect home, your Realtor will help you submit an offer to purchase it. Work with your Realtor to come up with a solid offer. This offer will include:
Down payment amount
Time to close
Any other contingencies
Step 4 - Begin Escrow Period
Once you and the seller have agreed and signed a contract, the escrow period begins. This period has other names including "under contract" or "pending close" but they all mean essentially the same thing.
Here's what will happen during this part of the process:
You will send an agreed upon amount of money, the "good faith deposit" to the title company. They will hold this money and apply it at closing to your down payment or closing costs.
You will hire a home inspector to inspect the property for any issues such as leaks, electrical problems, termite damage, foundation issues, etc. They make sure the home doesn't have any hidden problems that you need to be aware of.
Your bank will likely ask you to have an appraisal done. They will take measurements of the property and compare it to other properties in the area to make sure the house is worth the purchase price.
During this time period your loan will be sent for underwriting and final approval by your lender.
The title company will do a title search and make sure they can provide a clean title. This protects you and insures the seller has the right to actually sell the house, and there are no liens or other issues that could cause headaches for you in the future.
As long as there are no title issues, the title company will issue you a title insurance policy at closing, normally paid for by the seller. This insures that you will be reimbursed in the unlikely event that there are any title issues after you close.
Step 5 - Close
Congratulations! If you made it this far in the process your home is ready to close. At the closing table you'll bring the remainder of your down payment money, your bank will disburse funds to the seller, and you will take possession of the house and move in. Be sure to bring a copy of your ID to the closing as the title company will need it for their records.
Hopefully you found this guide useful in your Tampa area home search. If you have any questions on this process, feel free to contact Stephen Dispensa of Real Broker LLC. and Tampa Real Estate Secrets:
Licensed Real Estate Sales Associate
Real Broker, LLC.
Tampa Real Estate Secrets