The Home Buying Process: How It All Works Together
Compiled by guest “vloggers” Allison Parks and military veteran Kimberly McAleenan of Conscious Real Estate, this is the eleventh installment of a monthly blog series for 2018, providing tips to the military/veteran home buyer. Contact Allison and Kimberly via the Conscious Real Estate website for additional information.
Two real estate agents and one lender break it down on the home buying process from start to finish for active, reserves, retired military or veterans.
Things to Know About Purchasing a Home With a VA Loan
- Find a knowledgeable real estate agent
- Make sure you enjoy spending time with them
- Make sure you trust them and their advice to you
- Make sure they are looking out for your best interest and not their own
There are so many things to consider when it comes with who you work with as a real estate agent. The rule of thumb should honestly be just what your gut tells you. Really. If you enjoy spending time with them, trust their advice, and their not one of your best, best friends or family (though some people do make that work), then it could be a good match and you’ll be more likely to further end up with the best match when it comes to the home you buy.
This is the first step. In order to narrow your search down, you need to be able to finalize your budget range. You can have some wiggle room, but you’ll need to consider what kind of down payment will be required (for VA Loans, there is a zero down payment option). And, you’ll want to consider the size and value of the house and what that translates to by way of monthly mortgage payments. You don’t want to be paying just to live in your house, so make sure that you try to stick to the golden rule of paying no more than a third of your income on housing.
You’ll want to use the same standards of finding a lender as you do with finding a real estate agent. One good rule of thumb is to ask your realtor who they use most often and have the most positive experiences with. Then, go there.
House Shopping (The Fun Part)
Once you know how much you want to spend and what are you want to be in, what’s next? Do you need to be near base? Would you like to be accessible, but a bit removed for privacy? Sometimes you have to give up one thing or another to get closer to your dream place. You might though have to decide between the hot tub or the skylights for example. Or, the three car garage and the man cave. Or, the three bedroom in the city or the six bedroom in the suburbs. There are always some decisions to make and a good realtor will help you with these tough calls.
There will always be something to negotiate. For example, there might be a repair that the seller has not yet completed. In this case, the buyer (you) can ask that they repair, or in some cases, you can get an allowance from the seller to cover the repair, depending on what it is. Carpet and painting can be negotiated into the final purchase price, however, not every repair can be. This is determined in the next steps, which outline some of the procedural tasks required when using a VA Loan to purchase a home.
So, of course, some procedural steps are required in the home buying process. One includes of course the negotiations above, and then you may need to have an inspection, appraisal or one or the other done next. These inspections or appraisal determine the relative safety and upkeep of the house. For VA Loans, the appraisal also confirms the fair market value of the property. At this time, there may also be a down payment or earnest money to put down. This is either a part of your loan (as in down payments), or a showing of good faith to the seller (as in earnest money). In the case of VA Loans and earnest money, you will get some or most of it back at the closing, after all of your pre-paids (any closing or final costs), are squared away.
Closing, the big day! All your hard work and determination pays off on this day. Here is when you sign a million documents and get to finally cheers for your new home. Just remember to give yourself a lot of time this say as there is a lot to go over. It should be relatively simple however and a good agent and lender will have already prepped you on the various types of documents.
Congratulations. After your closing, you can start to enjoy the fruits of your labor in your new home. And, if you work with our favorite lender, Conscious Real Estate, you’ll also get to choose where to donate 10% of the sale through their nonprofit giving program. For more info or to chat with an agent about the homebuying process, click here.