Louisville Home Buyers
You’ve made the decision to go from renting an apartment to buying your own home. It’s an exciting time. But it can also be a challenging one for Louisville home buyers. Buying a home is no easy task. It’ll take research, patience and time. If you work with a knowledgeable real estate agent, take an honest look at your finances and maintain a good attitude, you can eliminate much of the stress involved in buying a home.
Here is a look at some of the steps you’ll take in your search for a new home. Understanding these steps should erase much of the mystery surrounding the process.
How Much House Can You Afford?
Before you tour your first home, you need to determine exactly how much house you can afford. This isn’t as much fun as walking through bungalows and Victorians, but it is a crucial step in the buying process.
Your best bet is to meet with a mortgage lender or bank for a mortgage pre-approval. During this process, a mortgage lender will look at your finances and determine how large of a monthly mortgage payment – and how large of an overall mortgage loan – you can afford.
To complete a pre-approval, you’ll need to provide a mortgage lender with copies of the financial paperwork that loan underwriters will use to verify your income and debts. You might have to provide your lender with copies of your last two pay stubs, your last two months worth of bank statements and your last two years worth of income tax returns. Your lender might also ask for copies of your most recent credit-card statements. Your lender will also run your credit to determine your three-digit credit score.
Your lender will then provide you with a pre-approval letter that tells you exactly how much mortgage money the lender will grant you. Armed with this information, you won’t waste time looking at homes that cost more than what a lender will give you.
It’s important to note two things: First, don’t settle for a pre-qualification. In a pre-qualification, lenders only estimate how much they’ll be able to loan you based on financial information that you provide but that they don’t verify. A pre-qualification is not nearly as accurate as a pre-approval. Secondly, remember that just because a lender pre-approves you for a mortgage loan, it doesn’t mean that you have to work with that lender when it’s time to actually take out a loan to pay for your home.
Finding the Right Real Estate Agent
You’ll want to work with a licensed real estate agent when searching for a house in Louisville. An agent will schedule showings, negotiate with buyers and send you home recommendations. Best of all, you’ll never have to pay a real estate agent. Your agent’s commission will be paid by the seller when your home purchase closes.
The right agent will also help you determine what type of home and neighborhood fits you and your family. Maybe you have young children and it’s important to live in a neighborhood with a strong public school. Maybe you’re an empty-nester and you’re looking for a quiet suburban street.
Whatever your needs, a real estate agent can help you narrow your search so that you don’t waste time looking at homes that aren’t right for you.
Agents might also be able to show you homes that haven’t yet hit the Multiple Listing Service thanks to their relationships with other real estate agents. This can be especially helpful in housing markets that have a low supply of homes. The best homes in such markets are often involved in bidding wars in which offers steadily rise. By seeing a home before it is publicly listed, you’ll have the chance to make an offer before a bidding war can start.
Making a Purchase Offer
Once you’ve found the home that you like, it’s time to make an offer. This is often a tense time for both buyers and sellers. Your real estate agent, though, can help you navigate this often tricky process.
When you’re ready to make an offer, you’ll meet with your agent who will officially draw it up. The agent will then present it to the agent representing the home sellers. At this point, the sellers can either accept your offer, reject it or come back with a counter offer, usually asking for a higher asking price.
You then have the choice of accepting the counter offer or making another offer. It’s not unusual for buyers and sellers – through their respective agents – to go through several rounds of offers before an agreement can be reached.
If Your Offer is Accepted
If the sellers accept your offer, it’s time to order a home inspection. A home inspector – who usually charges between $250 to $500 depending on your home and its location – will tour your home to search for any serious problems. The inspector will also be able to show you how your new home’s important systems work.
Don’t skip the inspection. If your inspector finds a costly problem – such as a damaged foundation or leaky roof – you can bring this information to the sellers and request either that they fix the problem or provide you the funds to repair it yourself. If the problems that the inspector finds are serious enough, you might be able to rescind your offer for the home without paying any penalty.
If the inspection does not turn up major problems, though, you’ll move on to the closing. This is where ownership of the house officially transfers from the sellers to you. It’s also when you’ll officially close on your mortgage loan.
You’ll have to pay certain settlement costs – usually about $3,500 to $5,000 depending on your location, your lender and the size of your loan – to complete the closing. Make sure to bring a cashier’s check, not a personal check, to pay for these costs. You’ll also sign a mountain of paperwork to officially take over ownership of your new home.
Once that’s done? You’re no longer one of the many Louisville home buyers searching the market, you are now a homeowner! You’ll receive the keys to your new home and your new life.