Click Here To Download These Steps As A PDF
It’s definitely a buyer’s market out there. If you’d like to get started, but aren’t quite sure how to begin, check out this step-by-step guide.
Step 1 - Choose the Right Agent
All real estate agents are not created equal. An Accredited Buyer Representative (ABR®) is a member of a select group of agents who are dedicated to making sure your interests are top priority throughout the buying process. Listing agents (ones representing the property being sold) want to sell the property at the highest price, in order to earn the highest commission. They are working for the seller—not for you.
As an ABR who specializes in working with first-time buyers, Gayle is looking out for your interests every step of the way, just as your Mom would.
Step 2 - Crunch the Numbers
It’s always a good idea to get pre-approved before you look for your first Pittsburgh area home. Pre-approval is a relatively simple process in which you meet with a mortgage lender to learn what you can realistically afford to pay. The lender will ask you questions about your income & debts, run a credit check and issue you a pre-approval letter. This will give you an excellent idea of a realistic price range for your home search. We can help you find trusted lenders in Pittsburgh who specialize in the unique needs of first time home buyers.
Step 3 - Take Our Advice: Get Pre-Approved
We recently heard about a buyer who had been saving her money to buy her first home. Although she was advised to meet with a lender to obtain a pre-approval letter, she didn’t do so. During her home search, she found a great house, but when she went to meet with the lender, she learned that the payment for that house was out of her reach. The moral of the story? We always encourage our clients to get pre-approved before you start looking.
Step 4 - Know What You Want
It’s a good idea to nail down a few specifics before you start searching. This will keep you focused and help keep the search at a workable level. Remember, the “perfect” home exists only in magazines—you will have to make some compromises. Some major factors to consider include
· Number of bedrooms/bathrooms
· Style of home (ranch, two-story, split entry)
· Property size and maintenance level
· Proximity to schools and work
· Neighborhood ambience (rural, suburban, urban)
· Price.
Step 5 - The Search is On
Once you’ve completed your “must have” and “would be nice to have” checklist, it’s time to start looking at homes. There are two ways to begin: one is by driving around and finding neighborhoods that interest you. Once you’ve decided on one or more, we’ll help you find available homes in those areas. If you see a “For Sale” sign with an agent’s name, we will set up an appointment for you to visit that home. Remember, the listing agent is working for the seller, not you.
The second is to sign up for our FREE Email Notification. With this program, you’ll receive emails about homes that meet your checklist needs as soon as they come on the market. This is like having 5,000 local agents working to find your first Pittsburgh home. When you find listings that look promising, we’ll set up appointments to see them at your convenience.
Step 6 - Offer and Negotiation
When you a find a home you love, it’s time to make an offer. This is where working with an Accredited Buyer Representative really pays off. We will prepare a Comparative Market Analysis (CMA) that will show you the sale price of similar properties in the same neighborhood that have sold recently. As your exclusive Buyer’s Agents, we are also required to disclose anything we know about the property including
· Reasons for the sale (job transfer, divorce, estate sale)
· Factors affecting property value in the neighborhood
· Seller’s willingness to negotiate on price or repairs
· Anything else affecting the home’s value.
Taking all of these factors into consideration, we will prepare and submit an offer to the listing agent. In addition to a sales price, we may also include some contingencies in the offer such as
· Closing date
· Items to be included (washer, dryer, refrigerator, etc.)
· Repairs to be made
· Inspection report.
Once we’ve submitted the offer, along with a deposit known as “earnest” or “hand” money, the seller may respond in any of the following ways:
- Accept your offer as written
- Counteroffer with a different price
- Reject the offer.
If the seller accepts your offer as written, we’ll proceed to the next steps in the home buying process (Inspection, Mortgage Application, Title Insurance, etc). If the seller presents a counteroffer you have three options:
· Accept the counteroffer
· Present a new offer
· Walk away.
Together, we will review the seller’s response to help you decide on the best course of action.
Step 7 - Financing Your First Home
Once we’ve successfully negotiated the offer, you will apply for a mortgage. We’ll help you find an experienced Pittsburgh first home lender who will explain the many options available. You will be asked to provide various financial documents which may include any of the following:
· Tax returns
· W-2 forms
· Other income documentation (dividends, alimony)
· Banking statements
· Paperwork for any loans you are currently paying off
· Credit card statements
· Citizenship papers (if applicable)
The lender will evaluate your percentage of income vs. expenses to determine how much you can realistically afford to pay. A general rule of thumb is that your fixed housing expenses (mortgage, property taxes and insurance) should not exceed 30% of your income. The lender’s recommendation will be sent to an underwriter, who will make the final determination about your loan.
Step 8 - Inspections are Crucial
While your mortgage application is being processed, you will hire a licensed inspector to examine the property. We will recommend inspectors that we’ve worked with for many years, who you can trust to thoroughly evaluate every aspect of the home.
The inspector’s job is to look for major structural and/or material defects and uncover any safety issues. He/she should check the foundation, plumbing, electrical systems, heating/air conditioning, garage, basement, roof and appliances. Remember that no home is ever going to be in 100% perfect condition; you just want to be sure that there are no potentially critical (and expensive) issues.
You may also want to have separate inspections for radon, pest infestation, well water, and septic systems, depending on the property. If the inspection reports reveal any troublesome areas you may
1. Ask the seller to fix or repair them
2. Renegotiate the price
3. Walk away from the transaction.
Step 9 - Preparing for Closing
You’re almost there! Your mortgage has been approved and any inspection issues have been settled. As you near the closing date, you will be working on the following procedures:
1. Removing of settled contingences from offer
2. Home appraisal
3. Homeowners/mine subsidence insurance
4. Title insurance
5. Land surveys
6. Notifying utility companies
7. Pre-closing inspection/final walk-through
8. Preparing for the move.
Step 10 - Closing Day
The big day has arrived. We will attend the closing, where you will be asked to review and sign a large number of documents. Review the documents carefully and be sure to ask any questions if you are unclear about what you are signing. It is much easier to clear up any misunderstandings before you sign rather than after.
Before closing day, you will receive an estimate of your closing costs. These are items that must be settled before the property title is transferred to you. They may include, among others
· Pro rated taxes
· Document fees
· Title insurance
· Loan processing fees
· State and local transfer tax
· Homeowner’s insurance
· Notary fees
· Recording fees
Be sure to bring your estimate to the closing, so that you can compare it with the final statement of closing costs.
Step 11 - Moving Day
It’s time to move into your first Pittsburgh home! Prior to moving day, you have been packing and organizing, contacting utility and service companies, making arrangements for child and pet care during the moving process and making sure correspondents are notified of your new address.
For your complimentary comprehensive guide, “The Stress-Free Guide to Moving Home,” click here.
Step 12 - Let’s Keep in Touch
Even after you’ve settled in, please feel free to call us with questions or concerns. We can connect you with trustworthy contractors and service providers who offer discounts to our clients and we’d love to hear how you are enjoying your first Pittsburgh area home. Plus, you’ll receive our "Fresh Perspectives" newsletter, filled with helpful information about home maintenance, repairs and upkeep. And, when the times comes to buy your next home, we’ll be delighted once again to guide you every step of the way home.
