So you're thinking of  buying a home.  And you don't know where to start.  I understand.  All of us have been there.  It can be a confusing and sometimes frightening prospect.  But home ownership is also a hopeful and exciting endeavor.  So let's delve into the process.

First of all, ask yourself, are you ready to buy a home?  Both emotionally and financially?  These are probably the two most important questions you need to ask. Home ownership is a big responsibility.  And if approached with a sound strategy and clear mind it can be very rewarding. But you have to be ready.

Let's take a look at the emotional aspect.  There are many facets and responsibilities to home ownership that get overlooked during the home purchasing process, such as home maintenance. Are you handy? If not, you'll need to factor in the cost of hiring someone to make repairs.  If you are, you'll need to ask yourself if you have the time and energy to make repairs.  Self introspection and honesty with oneself can help avoid a lot of trouble and frustration in the future. 

Now let's examine the financial aspect of home ownership.  Are you self disciplined when it comes to finances? Home ownership requires sound budgeting.  Be sure to make a budget including your projected mortgage payment, household expenses, and other incidentals like the aformentioned repairs.  Try to stay within at least within 90% of your total net monthly income so as to allow for savings.  It's always best to have a rainy day fund in the amount of 3-6 months of monthly expenses just in case.  In addition to the rainy day fund you'll probably need anywhere from 3.5% of the purchase price of the home (FHA loan) to 20% of the purchase price for the down payment on your home.  First time home buyers are usually best suited by the FHA home loan programs which only require a 3.5% down payment and allow the sellers to contribute funds toward your closing costs, which can be as much as 3% of the purchase price.  For example, if you were purchasing a $200,000 home, with an FHA loan you would need to have a $7,000 down payment and the sellers would be able to, (if they agree to do so) contribute up to $6,000 toward your loan and escrow costs.

So, once you've established that you're both emotionally and financially ready to purchase a home, what's the next step?

The next step is to talk to lender or mortgage broker.  Most real estate agents can suggest several lenders, or you may want to utilize the home loan services your bank offers.  Either way you'll want to shop around a bit for the best fees and rates.  Once you've decided on a lender you'll need to get pre-qualified by your lender to buy a home.  This is a simple process conducted by the lender. They will ask you for basic financial information like current W-2's from your employer, pay stubs, possibly bank statements, and they will run a credit report on you as well.  Once you receive the pre-qualification form from your lender it's time to start looking for a home.  This is where your Realtor comes into play.

Most home buyers today start their search on sites such as Realtor.com, Trulia.com, Zillow.com or a myriad of other real estate sites.  These sites are good, but they don't offer the full array of services and knowledge that a professional Realtor can provide.  How do you find a good Realtor? Well, first ask around.  Ask your family and friends who they used.  Most often they'll have a good Realtor to recommend.  Once you've got a few names, call them, and ask some questions like, "How long have you been a Realtor? Do you work with first time home buyers? Are you a full time Realtor? (this is important, you want someone who will be able to dedicate the necessary time and energy to your home buying experience).  And look at their designations and certifications.  A Realtor with certain designations shows the propensity to learn and evolve with the market.

Now, once you've found a Realtor you like, what's next?  This is where the fun starts. You start looking at homes!

Let your Realtor know exactly what you would like in a home.  Give your Realtor the description of your dream home, with the realistic expectation that you might not get EVERYTHING you want.  But if you're as honest and open with your Realtor as you can be they will probably be able to find a home that is very close to what you are looking for.  Your Realtor can then set up a customized home search on their MLS that will notify both you and them when homes that fit your criteria pop up. When you see a home that piques your interest notify your Realtor and they will set up an appointment to see that home(s).  My suggestion is to limit your home viewing to no more than 10 homes in one day if possible.  After 10 homes they all start to blur together in your mind and it's hard to remember what you sawy.  I also suggest bringing a camer/phone to take photos of the homes so you can remember what you saw later.  Before entering the home take a photo of the address plate on the home so you'll know the photos that correspond with each home.

Once you've found a home you like you and your Realtor will put together an offer to submit.  This is a whole process unto itself, which I will cover in my next blog post.

If you have any questions, feel free to call me at 602-334-3757 or e-mail:

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To search for homes go to: www.JWMurphy.LongRealty.com