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Do Your Homework
Buying a home requires a lot of time, money, knowledge and professional help. But, it doesn’t need to be complicated!
A little prep work will lay the foundation for a smooth and successful home buying experience.
In this step we’ll review the overall home buying process in NWA and share ways to prepare yourself mentally and financially for the steps ahead.
Understand the process
THE NWA WAY
Most real estate transactions in NWA follow the same basic sequence of events.
These steps are not always intuitive, nor are they similar to how real estate transactions are handled in other cities/states. Therefore, its important to familiarize yourself with how things are done specifically in Northwest Arkansas.
FOLLOW THE STEPS, IN ORDER
The #1 rookie mistake of first-time homebuyers is their desire to jump right into touring homes… lots and lots of homes.
Afterall, they’ve scoured online listings for months, tagged their favorites, and are excited to walk through in person.
But disappointment inevitably sets in when they discover home showings are reserved for buyers who have a pre-approval letter, have hired an agent, and have narrowed their search to approximately 5 homes.
The homebuying process should be fun, not disappointing, and the best way to ensure a happy home buying experience is to be educated, know what to expect, and adhere to the process.
Following these steps will increase your buying power, protect you from making mistakes, and save you a bit of frustration and/or embarrassment down the road.
So, order a latte, take a deep breath, and take some time to read through this buyers guide in its entirety. Review everything, from the documents you’ll be asked to produce and sign to what you’ll bring to the closing table.
How to prepare
BUILD YOUR KNOWLEDGE BASE
Familiarize yourself with the real estate industry.
In the midst of making one of the largest personal and financial decisions of your lifetime, you will also be learning to navigate an entirely new industry with many moving parts, like agents, brokers, lenders, appraisers, contracts and title companies, to name a few. Having an understanding of how the industry works and it’s lingo ahead of time will allow you to proceed with confidence and focus on your purchase when the time is right. Our navigation tab titled Real Estate 101 is a great place to begin.
Familiarize yourself with Northwest Arkansas and the NWA real estate market.
Now is also the time to get out and about. Explore the various towns and neighborhoods of NWA.
- Drive roads at different times of day to assess traffic patterns.
- Check out home prices in various areas.
- Research school districts.
All of this will help you set priorities when searching for homes later in the process. Our navigation tab titled Links & Resources can help get you started with links to maps, market reports, city information and more.
OUTLINE YOUR GOALS
Are you in need of a larger home for a growing family or ready to stop paying rent and start building equity?
Buying a home can be time consuming, as well as mentally, emotionally and financially stressful. Being able to refer back to your “why”, your reason that makes all this hassle worthwhile, will enable you to make decisions throughout the process that coincide with what is best for you and your family.
EVALUATE YOUR FINANCIAL SITUATION
You’ll have to prove your worth, literally, before you’ll be approved for a home mortgage loan.
Your lender will evaluate your holistic financial situation and it’s possible you may need to build credit, pay off some debt, continue to save for a down payment, or build a longer work history before moving forward. The pre-approval process (detailed further in Step 2 of this guide) will let you know where you stand in the home mortgage game. Your lender will either let you know the price tag of the home they’re willing to lend you money for, or let you know the financial improvements you need to make before they’ll consider you worth the risk.
In addition to a loan there are other costs associated with buying a home and homeownership.
To get an idea of the overall investment you’re about to make, you need to consider and budget for the following:
UNDERSTAND YOUR CONTINGENCIES
If you need to sell your current home in order to purchase another, you may find yourself navigating the world of buying and selling a home simultaneously. While this situation can’t be helped in some cases, a contingency can negatively affect your buying power.
Therefore, before beginning the buying process, you’ll want to consider the possible effects your contingency will have on your home purchase and seek alternate options, such as a bridge loan, if they are available to you.
You can learn more about selling your current home here.
You’ve done your research, added some fancy new real estate terms to your vocab, and know what to expect from the homebuying process.
Now it’s time to get pre-approved and move from a casual online home shopper to an intentional and active home buyer!
