Whether you’re asking Google or your parents about how to buy a house, don’t worry… you’re not the only Millennial out there who’s not sure what in the world to do.
In fact, many Millennials feel like they don’t understand the home buying process at all, which is why 71% of them hire a real estate agent.
But the thing is, buyer’s agents are really expensive. Working with one typically costs 3% of the entire transaction (that’s $6,000 for a $200,000 house).
As a home buyer you may think, “Well, the seller is the one paying the agent fees… so it doesn’t affect me.” But truth be told, many sellers factor the agent commission fees into the listing price…
And YOU’RE the one who will be paying the mortgage bill each month.
Using an innovative real estate transaction platform like Reozom will not only save you from paying for expensive fees (with interest over the course of 30 years), Reozom is also more enjoyable to use and work with.
So, without further ado, let’s walk through the simple steps of buying a home.
STEP 1: Figure out how much you can afford.
You don’t want to be house poor. So factor in any trips you’re taking, weddings you’re attending or other big purchases coming up, like getting a new car.
Lenders usually recommend looking for a house that costs 3-5 times your annual household income (if you plan on making a 20% down payment).
STEP 2: Get Pre-Approved.
Contact a mortgage banker to see how much you can get for your new house. You’ll provide your financial information and some documents (W-2 statements, paycheck stubs, bank account statements, etc.).
If everything checks out, you’ll receive a Proof of Funds or Pre-Approval letter. Keep this document handy because sellers may want to see it before a showing.
To accelerate this process, try out a new and innovative platform like Rocket Mortgage.
STEP 3: Get Your Search On!
Now that you know how much house you can buy, head on over to Reozom.com and get shopping. If you find a house you like, schedule the showing right on Reozom and you could be touring the house in-person as soon as the next day (without ever making a single phone call).
Step 4: Make an Offer
If you loved what you saw in person, it’s time to make an offer. You can make an official offer directly on Reozom. If the seller accepts your offer, a Purchase Agreement will automatically generate, which you will send over to your mortgage and title company.
At this point, the home goes into escrow, which is the period of time it takes to finish the remaining steps of the home buying process.
Step 5: Get a Home Inspection
Your offer can be contingent on a home inspection, so if the house winds up having a lot of hidden headaches, you can re-negotiate or withdraw your offer.
Find a local inspector and hire them to go check out the house. You and the seller will get a report of the findings, and at that point you can make the decision as to whether or not you want to request certain repairs before finalizing the deal.
Step 6: Select Your Loan
Work with your mortgage banker to select a loan program. They will have some options for you to pick from, so make sure to factor in what’s most important to you (for example, having the lowest monthly payment possible may be priority over a payment that is ensured to never increase).
Step 7: Get the Home Appraised
Your mortgage company will set up a home appraisal to estimate the value of the home you are about to buy. This step is necessary to show all parties involved that you are paying a fair price for the home.
Step 8: Complete the Paperwork
Your mortgage banker can connect you with a title representative. Your title rep will do all of the tricky research and paperwork for you to make sure the seller is the rightful owner of the house, so then YOU will be the rightful owner of the house once you buy it.
(Just so you know, your real estate agent doesn’t play a part in any of this paperwork.)
Step 9: Closing Time!
At the closing, you will sign all of the paperwork that will complete the purchase, including the loan documents. Once this paperwork is returned to the lender, a check will be delivered to the seller and the transaction is complete.
Now it’s time to pour some champagne because you are officially a HOMEOWNER!
See? Pretty simple.
And always remember, Reozom’s team is right here to answer your questions, just like Google or Mom.