Steps to Buying A Home


Whether you’re buying your first home, or moving to a new home, your responsibilities as a home buyer start before you look at new homes. Here’s our list of 10 steps to buying your piece of paradise in the Fort Lauderdale area.

Step 1 – Get Your Finances in Order

Before you contact a lender, you should run your credit reports and obtain your current credit score.  If there are any disavantageous items on the credit reports, they should be cleared up.  It’s also a good idea not not have made any large purchases in the prior few months, such as a new car.

Step 2. Pre-qualify for a Home Loan

Get pre-qualified. Better yet, get pre-approved.  You could afford more of a house than you think, or you may not be able to afford what you thought.

Generally, when an offer is presented to a seller, the seller will want to make sure that the buyer is fully qualified before working with them, therefore you will need your pre-qualifcation letter or better yet, pre-approval letter with your offer. The seller is taking a huge risk by taking their property off the market with an unqualified buyer, so they want to make sure they have a good chance at the sale being completed. You can simply call a mortgage broker or bank and ask them to pre-qualify you.

Step 3. Hire a Realtor®

Find a knowledgeable Realtor to help you. You can start by asking friends and/or relatives for referrals, or by looking in a neighborhood that you like and see who’s doing the bulk of the business there. If you’re relocating and don’t know anyone or know where you want to be, call a company that’s big in the marketplace you’re moving to. Most importantly, choose someone you feel that you can trust. The agent you pick is key in making the entire process work. You don’t want to grab a relative or friend who hasn’t been in the business recently. Way too much has changed and is still changing. You’ll need someone who’s up on the current market and trends. Many a friendship has been lost by trying to do business with someone just because they’re related to you or they are someone’s friend.

Step 4. Find your Home

Start looking!  Decide what neighborhood you want to be in and what’s most important to you.  Find the property that matches most of your needs.  Most houses are not perfect in every way.  You may not have the color paint you like, or the exact carpeting you’d prefer, but does the house meet your needs? How’s the roof? How old in the air conditioning unit? What’s the neighborhood looking like these days? These are important questions because they will cost a lot to change or in the case of a neighborhood, you can’t really change it.  If you’re concerned with a good investment, try to find the worst house in the best neighborhood.  The other houses will bring the value of yours up.  Make sure to communicate with your agent as to what is most important to you.

Step 5. Make an Offer on Your Home

Make an offer.  When you’ve found the home you like, make an educated offer.  Ask your agent to pull up “comps”, meaning comparable properties that have sold in the area.  Just make sure you’re comparing the same type of properties, i.e. waterfront to waterfront, similar square footage, remodeling done, etc.  Ask your agent for a “CMA”,  a.k.a. comparative market analysis; this is similar to an appraisal, which will tell you what the property should be worth in today’s market.  You will also have to take into account the current marketplace.  Are the values rising, declining, or remaining stable?  Your agent will provide you with this information. Your agent will then prepare the written offer for you and go over what terms you are proposing to the seller, such as how fast you can close, the time period for inspections, how much you are putting into escrow, etc. Generally your agent will ask for a deposit when writing the contract or they may collect the deposit after you have come to an agreement with the seller on all of the terms and both parties have signed the contract with all of the changes. This gets held in an escrow account until closing.

Step 6. Negotiate the Details

Be prepared to negotiate!  Most sellers leave a little “room for negotiation” in their price.  Ask your agent what the average list to sale percentage is in the area you’re considering.  Some properties may be “priced to sell”, meaning that there is not much room for negotiation.  Some homes may be overpriced,  and some may actually be under priced!  The CMA will help you greatly in deciding what to offer. As of this writing we are experiencing a low inventory of homes for sale so many are selling close to, at or above the listed price.

Step 7. Get a Home Inspection

Make sure you get a thorough inspection before proceeding with the sale. Most transactions in the Fort Lauderdale area are “as-is” sales, which means that the house is sold as you see it and the seller has no obligation to make any repairs. You are responsible for getting a licensed inspector in to check out the roof, plumbing, electrical, air conditioning, etc. to make sure you are satisfied with the current condition of these items.  Sellers are required to disclose any known defects that are not readily observable such as roof leaks, mold, etc. and most will provide you with a “seller’s disclosure” which discloses just about everything they know about the property. Your agent should be able to recommend a good inspector. Also ask about a “4 point inspection” at the same time as the regular one for a home that is more that 25 years old. You will also want a “mitigation report” to get extra discounts on your windstorm coverage.

Step 8. Perform Your Duties Under The Contract

Adhere to the deadlines. Once you’ve both come to an agreement, be sure to adhere to all of the deadlines contained in the contract.  Your agent should remind you of all of the deadlines and follow-up with your lender, inspector, closing agent, appraiser, and surveyor (if needed) and make sure that everything gets done in a timely manner.

Step 9. Get Ready for Closing and Moving

Start packing!  Notify all utility companies of your change in service approximately 3-5 days before closing.  Your closing agent will tell you the day before closing exactly how much you’ll need to bring to closing. Your agent should review the closing statement to ensure everything is correct. The closing agent/attorney will most likely require a wire transfer from your bank.

Step 10. Unpack and move in to your new south Florida home!

Give your new home your personal touch.  Meet your new neighbors.  Throw a party with all your relatives and friends to celebrate the new chapter in your life. Whatever you choose, I hope your find love, health and happiness in your new home.