So You Want To Buy A Home: Now What?

By Eddie Callender, Jr.

There comes a time in the life of most young adults when, almost without warning, the urge to purchase a home is felt.  It may at first be just a passing thought.  At some point, though, the passing thought becomes the issue of the hour, and it's time to respond.

 Buying a home is somewhat like riding a bicycle - if you've never done it, you are likely to get a little bruised and banged up unless you get some expert help.  Even worse, you may not even know how to get started with the process; and it is a process!  This article is intended to suggest to you, if you are a home buying novice, the fundamental first steps to take to get you off to a quick start to efficiently fulfill your dream of home ownership.

While you may be expecting an article on how to best select a real estate agent, the truth is that selecting an agent is really a distant second step!  Here is step one.

Unless you are in the enviable position of being able to pay cash, step one is to identify the right lender and get "prequalified."  If you overlook or attempt to bypass this vital step, you will almost certainly lose time and suffer grief before you're finished.  Contacting a real estate agent and asking to see homes without being prequalified is much like walking into a Lexus dealership and asking to test drive the high performance LFA (starts at $375,000) when you're working at McDonald's and attending college.  You may argue and insist you're qualified to buy the car.  You may actually think you can afford it.  In reality, the odds are about 99.99 to .01 that you will NOT drive that car, and even less that you will be able to borrow $375,000 to purchase it!  You have wasted you time, and theirs.

Getting prequalified for a mortgage (a mortgage is essentially a loan for real estate) will save you time in the purchasing process.  In addition, it may spare you great disappointment.  For instance, you think you can buy a $200,000 home and you find the one that fulfills all of your dreams.  Then, you go to the bank or mortgage company and there discover that you actually qualify for only $125,000.  You have not only wasted your time shopping, you are now sorely disappointed.  And, homes that might have suited you had you started looking in the $125,000 range will now seem woefully inadequate.

Prequalification, besides saving you time and disappointment, can save you embarrassment.  As you shop for a home, you will undoubtedly tell family and friends about the awesome properties you are seeing, and how you will purchase the "perfect" one.  As you tell them where you are looking, they will discern the price range you are shopping.  When you attempt to make the purchase, how embarrassing it will be if you fail to qualify for the mortgage.

Here are some brief suggestions for finding the right mortgage loan officer.  First, call a trusted or highly recommended real estate agent and ask which loan officer he/she recommends to work with first time homebuyers.  Real estate agents tend, over time, to identify the lenders and more particularly, the loan officers, who "get the job done" and treat their clients fairly and honestly.  You might ask for two or three such referrals, or ask for the recommendation of two or three different agents.  Interview the top two or three recommended loan officers to see which one is the best fit for you.

A good loan officer, especially for a first time homebuyer, will offer to meet with you in person.  Face to face, in my opinion, is always best.  It allows you to connect personally, get comfortable, and feel empowered to ask even the questions you may fear are "silly."  You have a right to understand what you are doing, what your options really are, and how the lending process works.  You are more likely to get these things if you find a local loan originator who will meet and discuss with you in person, "face to face," the entirety of the process and your ability to purchase.

Purchasing your first home is like having your first child.  It's a really big deal and should be carefully planned.  Get off to a good start by finding the right loan officer, and everything else will be much easier.

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