First Time Home Buying in 5 Easy Steps

Step 1: Loan Pre Approval

    • Loan Options Include

      • CONV - 3 to 20% down loan programs. Loan down payments of 20% or greater eliminate PMI (Link to blog on PMI)

      • VA - 100% financing, $0 down payment program for eligible veterans

      • FHA - Government backed 3.5% down loan program

      • USDA -100% financing, $0 down payment program eligible in certain rural areas 

      • Portfolio Loan - did you not qualify for a government backed loan but can afford the mortgage? Consider a portfolio loan (Link to blog on Portfolio Loans)

Step 2: Set up your Home Search

    • Click here to search all homes

    • Search Homes based on commute time to work, school, shopping

      • Search Homes based on newly released homes

      • Search Homes based on price drops

      • Search based on School District, Price Range, and many other features

      • Link to Search Video

Step 3: Write up an offer and negotiate

    • Research Comps for Area

      • Look at neighborhood, and similar submarket (Price and school district) comps

      • Into stats, for the latest stats by city, schools, and neighborhoods

    • Terms to consider

      • Offer Price

      • Closing Date - most lending programs take approximately 45 days. However, they can vary based on how quickly you get your loan documents in, the type of financing program you’re using, and whether you are using a local lender

      • Earnest Money amount

        • Held in escrow until closing or mutually agreed upon both parties. Shows good faith and seriousness in purchasing home.

      • Do you want anything to convey with the home?

      • Do you want the seller to pay for your closing costs? Average closing costs range from 3 to 4% of the purchase price depending on the loan type, down payment, and purchase price. MCRE has a pre negotiated vendor discount program with local vendors and can save you money on these closing costs. 

      • Utilize esignature software for convenience

Step 4: Inspection Phase

    • When purchasing a home in Huntsville, we use a form called a request for repairs. It’s negotiable, but typically you negotiate approximately 2 weeks to have your inspection completed.

    • Alabama is one of the few remaining Caveat Emptor States, which means buyer beware. What this means is that seller’s do not provide buyer disclosures. This is why you want to get a good home inspector and let’s be honest - a home inspection report is probably more valuable than a seller’s opinion of condition :) There are some exceptions to caveat emptor:

      • Purchasing from a builder, which is why you get a 1 year builder’s warranty

      • Direct Inquiries - ie we ask the seller or the seller’s agent a question - they can’t lie

      • Anything affecting health and safety

    • Typical Inspections include:

      • General Home Inspection. Typically ranges from $350 - $500+ depending on the size of the home

      • Termite Inspection: Typically ranges from $85 - $150+

    • Other Inspections to consider are:

      • Radon - odorless gas in the ground that is found in North Alabama.

      • Mold Inspection - if you suspect mold

      • Structural inspection if you suspect structural issues or if recommended by the home inspector

Step 5: Closing

    • This is where you get writer’s cramp from signing documents, but at the end it’s all worth it because you get the keys to your new home.

    • In Alabama, we close with Real Estate Closing Attorneys.

    • You may be asked to bring a certified check or wire funds prior to closing. Please verify with the closing attorney prior to wiring any funds because of a rising number of wire fraud cases relating to real estate closings

  • Questions??? We offer a free first time home buyer’s counseling session. 

Posted by Matt Curtis on
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