By Kelly Fondow
Realtor, Weichert Realtors Nickel Group
Now that warm weather is finally here, the spring/summer real estate market has begun in earnest. The arrival of sunshine usually signals the start of the busiest months of the real estate calendar, and all signs suggest that this year will be no different.
Step 1: Decide when to start
The home buying process involves quite a few steps, but it does not need to be intimidating. To begin, decide when you would ideally like to move in to your new home. From that date, you can work backwards. It typically takes about 45 days from making an offer to closing on a house. How long the home search takes varies greatly, so plan to start at least three months before you’d like to move.
Step 2: Obtain a mortgage pre-approval
A good mortgage professional will provide a pre-approval and help buyers truly understand their buying power by helping determine the monthly payment that buyers can afford (known as the “monthly spend”). The full payment will consist of mortgage principal and interest, as well as property taxes and homeowner’s insurance. Property taxes vary greatly from city to village to town, so take that into consideration when you decide where you want to live.
Step 3: Find a Realtor
Find a Realtor who sells homes in the community in which you wish to live, and whose knowledge, work ethic, and communication style match your needs. Purchasing a home is one of the biggest decisions you will make, and a Realtor you “click” with will make this process more predictable, less stressful, and more pleasant.
Step 4: Begin your search
Your Realtor will help you determine your purchase price range based on your monthly spend numbers. He or she will then typically set up an MLS search for you. The MLS is a database of homes for sale, and this search will give you access to listings of homes on the market that meet your criteria.
Familiarize yourself with the market in your community through online searching, visiting open houses, and walking through homes on appointments made with your Realtor. In some of our communities, well priced homes sell very quickly, and multiple-offer situations are becoming increasingly common. If you know the market, you will be more comfortable acting quickly and decisively when you find the right house.
Step 5: Make an offer
Once you have found the house you would like to purchase, you will work with your Realtor to determine your offer strategy. Your Realtor will guide you through the offer process and advise you during the negotiation. Having a solid idea of how much you are willing and able to pay for the house will help you build your strategy and will take a bit of the emotion out of the negotiation process. Your Realtor will often provide you with a market analysis for the house in question, which will help you decide what you believe the home is worth. You should also know that low-ball offers do not usually work—well priced homes in Oak Park and the surrounding communities will typically sell for about 95% of asking price. This percentage varies a bit from town to town, but not much.
Step 6: Conduct an inspection
Once you and the seller have agreed to the purchase terms and you have received the executed contract, you will have five business days for the attorney review and inspection. Your Realtor will typically recommend a good home inspector and a local real estate attorney. The home inspection is intended not only to identify any structural, mechanical or safety concerns with the home, but also to help familiarize you with the house. You will have the opportunity, through your attorney, to request that key issues raised by the inspection be addressed by the seller.
Step 7: Finalize the loan
Your mortgage professional will provide you a list of all of the documentation required to process your loan. It is your job to provide everything they ask in a timely manner, so that you can be sure the loan is ready by your intended close date.
Step 8: Close the sale
Just before your closing, you will have one more opportunity to walk through the house. This allows you to confirm that it is empty and that no damage was done since you last saw the house. At your closing, your attorney will take you through all of the paperwork. Once you have signed all the paperwork and the funds have been transferred, you will be handed the keys to your home.
With interest rates still quite low, and prices well below their 2005-2006 peak, homeownership is in reach for many of you. We will see more houses hit the market in the coming weeks, as the market heats up. Get your good walking shoes and start shopping!