Congratulations to me for buying my first property. It’s a nice feeling to know that I own my own little piece of the world. My initial goal was to purchase a property two years ago but I’m glad I purchased it now because the timing works out well since prices are the lowest I’ve seen in a long time. I’ll go through the process of buying a house for some of the other first time home buyers. As a warning, I purchased the house through ForSaleByOwner and not through traditional real estate agents.
Step 1- In addition to having your real estate agent search for properties, you should be actively looking on sites such as Dreamtown.com, Realtor.com, Coldwellbanker.com, ForSalebyOwner.com, and Craigslist.org. You would be surprised to see that many of the properties are not listed on MLS and you just might find a little gem.
Step 2 - Research the area you like the most. It differs for everyone but I really liked the diversity of Pilsen and the proximity of Pilsen to UIC. I was also looking at South Loop and Bridgeport.
Step 3 - Get pre-approved for a loan to see what kind of house you can afford.
Step 4- Just for kicks, find the estimated value of the house on Zillow.com and see what the estimated current value of the house is. This site will also show you previous purchase price of the house (if it’s current) and recent sales in the nearby area.
Step 5- After deciding that you want to make an offer, have your lawyer draw up a contract (the real estate agent does this if you have one). After some negotiating (NEVER pay full price during these bad times!), you’ll come up with a purchase price that both parties are happy with.
Step 6- Now is the time to have a trusty loan officer to do some work. Pre-approvals don’t really mean much because they can still deny your loan so it’s best to have the loan officer work in your favor. I ended up going through my friend who got me a great rate of 5.875 (rates are a little higher right now).
Step 7- I paid $300 for assessment of the house (mandatory for the loan) and $300 for the inspection. I’ve gone through the inspection process with 3 other inspectors before (family and friend’s places) and I thought mine was the best.
Step 8 - Lawyers and real estate agents will decide on a closing date. You should have a final walk-through before the actual closing date. By the closing date, you should receive a full estimate on what the final cost will be (down payment and closing cost). I believe our closing cost were about $5000-$6000. They will require that you come with a cashiers check.
Step 9- Once closing is done, enjoy your house! We ended up doing some renovations and didn’t move in until a few weeks later but you should be able to move in right after closing.
Here and some people I can refer you to: (Chicago-land area)
Loan Officer (my trusty friend) - will offer the best rates and great personal service
Lawyer - also did a great job and was priced fairly, on top of his game with calls and getting back to me
Inspection - Great inspector and within a few hours, will have all the details online so that you can access it through a log-in site on his complete inspection
Painter - experienced painter with years of experience painting downtown condos
Tree Removal - The lowest quote I received out of 10 estimates(range $1000-$5000), tree removed next day!
Fence - Great prices and great service on fence installation and removal (lowest price quote $1500-$3000)
Carpet - Referral from a friend. Great carpet and fast service (lowest quote from $1500- $4000)
I can provide you with contact information if you need. I’m really happy with the level of service, low price, and quality of the products I received.
I recommend that you call around for quotes. The differences are substantial as you can see from above.
WARNING: Buying a house was very very stressful. The time during negotiations, waiting for the the close date, making sure the loan gets approved, the cost of down payment and closing cost, and fixing all the minor repairs in the house will drain you down. Hopefully you can use some of the people I recommended to make life a little easier. At the end of the day, all the stress and headaches were worth it to own a piece of property!
If you have any other questions, feel free to ask!
Posted under First Home
This post was written by Jay on November 21, 2008
