First Time Home Buyer Guide

If you are a first time home buyer in Richmond, VA you should read this blog post.  I am going to break down the home buying process for Richmond real estate.  The first thing you will want to do before anything is get pre-qualified, preferably by a local lender.  Why a local lender?  They are easier to get in contact with when you need them.  They will also use local appraisers that are familiar with the real estate market in Richmond. As your local Richmond realtor, I can give you referrals to a few different lenders, but you can use any lender.  There are a few reasons you want to get pre-qualified.  You don't want to sell yourself short and not get everything you want in a home.  You also don't want to be looking at homes that may be above your budget.  Getting pre-qualified gives you peace of mind and a price range for your home search.  It also helps in negotiations, and in multiple offer situations.  If your competition is a buyer who wanted to find what they wanted first, and then get pre-qualified, you are already ahead of the game.  Your offer is much more likely to be accepted.

After you get pre-qualified we will want to meet, and find out exactly what you want and need in a home.  If you are purchasing with another person, I highly recommend that each person write a list of wants and needs so you are both on the same page.  If you don't do this from the beginning it can cause problems further down the road, and it could waste your time looking at homes that are not true contenders.  Once we have a set criteria, I will set up a home search for you and we can start looking at homes.  I recommend using a small notepad, or phone to take notes on what you like and dislike about each property.  That way you can discuss the pros and cons later if you are interested in more than one home.  I recommend only seeing about 3-5 homes max in one day.  If you see any more than that, they will all mesh together.  The goal lis finding you a home in 5-8 showings.  This does not always happen, but we want to make sure we are all on the same page with your negotiables and non-negotiables. We may need to revisit your wants and needs after seeing a couple homes.  This is totally normal.  I will do my very best to get you into a home within your desired timeframe.

Once we find the home of your dreams, I will pull comparable home sales in the area to make sure you can make a well-educated decision on your offer.  We will take a look at comparable homes that have sold in close proximity, similar style, size, bedrooms, bathrooms, and similar condition.  This will help prevent potential issues with the appraisal. After we get the contract accepted you will have to provide me with a check for the "Earnest Money Deposit" which is generally 1% of the purchase price of the home ($1,000 is normally sufficient for homes up to $250,000)  The Earnest Money Deposit, is a deposit given to the closing agent to show good faith interest in purchasing the home.  As long as you abide by the contract you will never lose those funds, they will be applied to your mortgage balance at the time of closing. Within 7 days of the accepted contract, you will need to fill out the loan application.  The lender will ask for your bank statements, W2's, 401k statements, proof of employment, and any other financial income records.  We will schedule a home inspection and request repairs or credits within 10 days of the acceptance of the contract.  The home inspection will cost anywhere between $350- $450 depending on the size of the home.  The home inspector will compile a report about all of the defects in the home.  Don't be alarmed by the length of the report.  There are always defects in a home even if it is a newer home.  The inspector will be sure to point out the ones that are most important. Once we submit our request for repairs we have 7 days to negotiate with the seller to come to an agreement. If we can't come to terms with repairs after the 7 days you can back out of the contract, and get your Earnest Money Deposit back with a request to the seller for the release of funds.  If we do come to an agreement, the next phase of the transaction would be the appraisal.  Your lender will order the appraisal for you, and it will cost between $450 - $500 that you will have to pay out of pocket.  The appraisal is a safeguard for you and the lender to make sure you aren't overpaying for the home.  If the home doesn't appraise for the contract value, then we have 5 days to request a price reduction.  The seller has 5 days to respond to the price reduction.  If the seller does not reduce the price to the appraised amount, then you can either pay the difference or back out of the contract and receive a refund for your Earnest Money Deposit with a request to the seller for a release of funds.  If you purchase a home or condo/townhouse in a neighborhood that has a Home Owner's Association, the seller has to provide you with the HOA packet before closing.  You have 3 days to review the packet.  If there is anything that you disagree with in the packet, you are able to back out of the contract and receive your Earnest Money Deposit with a request to the seller for the release of funds.  Closing on a home generally takes about 30 -45 days depending on the transaction.  No two home purchases are the same, so there are some other hurdles that could arise throughout the transaction.  We are here to assist and support you throughout the transaction.  If you have any questions regarding purchasing a home or would like a FREE BUYER CONSULTATION, give us a call at 804-617-3397 or email Francisco@richmondhomesales.com.  We would love to work with you!

Francisco Peot

Realtor

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DIsclaimer: The views and opinions on this blog are my own, and are not associated with the beliefs or views of Clocktower Realty Group or any of their associates.