So, you've decided you want to participate in the American Dream of home ownership. How exciting! Your home will most likely represent the single largest investment you ever make, whether it's your first home or your fifth.

To make the process go as smoothly as possible, a little pre-planning is in order. Here are some tips to start you on the right track.

Step 1: Select a Realtor®

Choosing the right real estate agent is key to having your purchase process run smoothly. Here are some important criteria to check for when choosing an agent.

1. Select an agent that is knowledgeable in the area you are interested in locating. This will help you when making an offer as the agent will know what a 'fair' price is for the home.
   

2. Select an agent that is accessible and returns your calls quickly. An agent who is difficult to reach will prove to be very frustrating for you throughout the process.
   

3. Select an agent that is good at watching details and follow-up. This trait is extremely important once you get into contract on a home. An agent who doesn't monitor due dates and make certain they are met, can cause your contract to become null & void!
   

4. Select an agent you trust to handle this very important financial transaction. Select an agent based on their professionalism, expertise and years of experience, rather than their personality or appearance. Select an agent in the same way you might select any other professional, such as an accountant, financial planner or dentist … by their abilities.
   

Step 2: Select a Lender

If you don't have or know of a lender, your real estate agent can assist you with the names of quality lenders. Talk to 2 or 3 lenders to see (1) what price of home and (2) what monthly mortgage amount (PITI) you are likely to be approved for. Compare their total APR, not just their interest rates. Make a comparison of the fees they charge for processing the loan. A very low interest rate may not be the least expensive cost to you if they overcharge for points and other items. Also, and this is very important, select a local lender! When the time comes for closing, it might be critical for the lender to work out last minute glitches and/or to attend the closing. Without an accessible lender, the transaction might not close and you might be in breech of contract. For this reason, avoid the online-only lenders.

Step 3: Become Pre-Qualified

Once you select a lender, you should give them the information they need to Pre-Qualify you. To do this, they will need to know your financial information such as income, expenses, credit rating, etc. This first step can usually be done at no cost to you and can be handled over the phone. Based on the information you give them and your down payment, they will calculate the price of home you can afford. They will also tell you the maximum monthly payment (PITI) you can afford.

Step 4: Decide On Your Home's Features

A good approach to this is to create a list with 3 columns. In Column 1 put the "Must-Haves". In Column 2, put the "Like-to-Haves". In Column 3, put the "Don't Want". Go over this list with your real estate agent. The agent can then guide you as to whether the home/features/location you want is within your price range. The agent will then use this information when searching for homes that meet the criteria. Remember, there are no perfect houses. Look for a home that has most of the features you want and that the items it lacks can be added or changed later.

Step 5: View Homes

Your agent will set up showings of homes that best seem to meet your criteria. If you've viewed 10-15 homes and none of them are satisfactory, then it's time to sit down with the agent to re-evaluate your criteria or the agent's selection of homes to view. Communication between you and your agent is critical.

Step 6: Make An Offer

When you find just the right home, be prepared to make an offer on it quickly. Depending on the demand for the given area, hesitating could mean you will lose your perfect home to another buyer. Your agent will guide you in determining a 'fair' price to offer for the home, as well as all the other Terms & Conditions that will need to be included in the Purchase Contract. Also, be prepared for the Seller to submit a counter offer to change/revise some of the Terms & Conditions. Remember, in a real estate Contract, it must be a win/win for BOTH sides. You, the Buyer, win those Terms that are important to you, while the Sellers win the Terms that are important to them. Usually both parties reach some agreement and enter into a Contract. It's not a Contract until both parties "sign on the same page". 

Buyer's Tips