Buying a home can be confusing, and in this market, can cause panic that you would rather do without. The pressure is huge at the moment, and you are competing with people who have their finances ready to go, being a loan preapproval or they are simply cashed up.
In Geraldton & Perth real estate, these past few months, people have missed out, and it’s been hard to watch. There are just more buyers out there than homes for sale. Without preapproval you are really on the back foot and the road ahead to home ownership could be a rocky or even painful one.
So what does “having your finances ready to go” look like? That’s a separate post but for now let’s talk about what steps you will go through during the home buying process. Building is not much different, a few steps will change, but the flow is the same. Here are the 10 steps for established homes.
1. What home do you want & need? A unit, house, or a block of land perhaps? Do you need a small or large yard, and what areas are you looking in, because lenders care where the home is. How big is the home and how old is it? This all makes a difference.
2. I recommend sidling up to a real estate agent who you trust and like working with. Call them and see how you go, meet them to see if you can make an impression on them, and if you feel they are making a great impression on you. This is going to make ALL THE DIFFERENCE to your buying experience. Your preferred agent in town can most likely get you through all the listings, and they may have “off market” listings, which they have heard are coming up but they haven’t yet made it to the web sites.
3. Pre-approval. This is my part. I will meet you and find out your financial situation as well as your goals and dreams for the future. I look past this home purchase, to when you’re a few years into your loan, and your life has changed, and your home loan maybe no longer fits for many reasons. I am there for you well after you become the owner of this home. If you don’t seek preapproval, you can still make the offer “subject to finance”, and this is commonly done. Sometimes you go into a home open and just fall in love, so you make an offer. I get it, I’ve done the same. We work with you to skip preapproval stage.
4. Due diligence. This is where you do your homework and take advice from builders, real estate agents, maybe a financial advisor (I can give you the name of a brilliant local one), and people in your life who you trust.
5. Make an offer. Through your Real Estate Agent you make an offer to the seller. You show the agent your preapproval letter from the lender, which is valid for 90 days.
6. If your offer is accepted, it’s On Like Donkey Kong The agent, the settlement agent and I swing into action to get your house ‘settled’ ie that’s the moment you own it. Again, I know some really great Settlement Agents, locally and beyond.
7. I seek Formal Approval from your lender, and the other parties help your purchase across the line, to settlement. I order a bank valuation on the property to make sure that the lender is happy to secure a mortgage over that property. This report is usually paid for by the lender although sometimes you incur a fee (I’ll tell you up front), and you won’t get to see that report as it belongs to the lender.
8. Inspections are carried out if you requested them. Plumbing, electrical, pest, builder’s inspection. You do not want to find out later that your loo doesn’t flush or the kitchen fan gives you a spark when you flick the kettle on.
9. You insure the property and provide this to the lender.
10. Settlement!!! You get the keys!! This is usually around 50 days after your offer is accepted although this is part of your negotiation with the seller, so this is not set in stone. It also depends how long your finance approval takes, so the more prepared you are, the faster this will go.