There is a lot to know when buying a home in the Greater Baton Rouge area. Whether you are buying your first home, moving up, or downsizing, our Guide to Buying is designed to help you every step of the way. Start your home search or click through the tabs below to learn more about the process:
Step 1: Get Pre-Approved
Unless you are paying cash, the first and most crucial step in beginning your home search is getting pre-approved. The last thing you want is a disappointment when you find the home of your dreams.
Most homebuyers begin searching online, without knowing what their approved price range is. You may get your heart set on a home that is out of reach OR learn that you can afford more than you thought!
Getting pre-approved will give you an understanding of what homeownership will cost, including the costs to close. Financial surprises aren’t the greatest when making the most important investment of your life.
If there are credit issues, more times than not, there are relatively easy steps to get them corrected, moving you toward your dream home.
Sellers may reject your offer if not accompanied by a pre-approval. If there are multiple offers, the seller will accept the offer of the approved buyer over a buyer that hasn’t applied yet. They don’t want to tie their home up, waiting for the approval only to be told their buyer wasn’t ready, willing, and able.
Step 2: Gather Supporting Documents For Your Lender
Your lender will ask you for lots of information at the time of formal application. It’s best to get that information together now. Producing this information now will help speed up the process and ensure the pre-approval is strong. Here is a list of documents they will ask for:
- 2 years’ tax returns if self-employed or commission
- 2 most recent W2s
- 2 most recent year-to-date paycheck stubs
- 2 most recent bank statements for all checking, savings and retirement accounts
- Copy of photo IDs
- One other ID (social security card, birth certificate, etc.)
- Loan information of other real estate owned
- Divorce decree and 12 months’ proof of child support, when applicable
- Name and address of each employer – past 2 years
- Payment for appraisal
Step 3: Choose a Mortgage
There are many different mortgage products out there. Your lender will be able to help you choose the one that’s right for you and your situation. Here are a few of the options available to you:
- Fixed-Rate (Conventional): 10, 15 & 30 year loans. There is a minimum of 5% downpayment.
- FHA: a 30-year loan with 3.5% down. These loans have a minimum standard credit score to be eligible.
- VA: These loans are Veterans and backed by the United States Veterans Administration.
- USDA/Rural Housing (RD): 100% financing available. These loans are only available to homes located in certain areas.
- Jumbo Mortgages: These loans are available for loan amounts of $417,000 to $1,500,000.
*All loans are subject to credit approval including credit worthiness, insurability, and ability to provide acceptable collateral.
Step 4: Choose A Lender
There a many types of lenders out there. It is crucial to find one that knows about and offers a mortgage that best suits you. Our recommendation is to find a LOCAL lender that is familiar with the Louisiana laws and customs. Here is a list of a few of your mortgage lender options:
- Your own bank or credit union: They already have your bank accounts, credit cards, and investments. Your history with them will hopefully motivate them to give you a good rate.
- Mortgage lender: Mortgage lenders will provide a faster loan closing and can be more flexible on terms as well as offer more options in regards to products.
If you need help connecting with a lender, let us know. We are happy to recommend a few for you to interview.
It is essential to understand that the most important of these steps is to obtain your pre-approval letter.
You have your pre-approval in hand, and now the fun begins!
Step 1: Create Your Wishlist
It’s time to create your wishlist, your needs, and wants list. We find this step incredibly useful as well as a crucial first step in house-hunting. Write down your “Must-Haves,” your “Nice to Haves” and your “Absolutely Nots.” These lists will help you hone in on precisely what you are looking for and is vital information for your REALTOR.
After you have your lists, decide what items on that list can be negotiable. If you have to have a fenced yard, does that mean you don’t want to look at any homes that don’t have fenced yards? Being clear on what your negotiables are will make the house-hunting process easier for you. It will also help your REALTOR to tailor your searches as to not flood you with homes that don’t meet your criteria.
Step 2: Choosing a REALTOR
Purchasing a home will most likely be the most significant investment of your life. Make sure you are represented by a well educated real estate agent that works for YOU. Choosing a great Baton Rouge real estate agent doesn’t have to be hard. There are many agents in our area of varying quality. Make sure to ask questions, and don’t be afraid to interview more than one. You don’t have to (and shouldn’t) choose the first agent that agrees to open a house for you or answers their phone.
Step 3: House-hunting Online
Realtor.com – This is where we see most consumers start. This is an easy-to-use site that is accessible to the public. The problem is that you have agents that pay to be on this site so not all of them are top quality, and the site sometimes lags in the correct information.
Custom search by REALTOR – Once you have narrowed down your list on what your needs and wants are, your agent can set you up on the MLS (Multiple Listing Service). This is the REALTOR database and is updated in real-time. Make sure to ask your agent to set you up on the Collab Center. This will make for easy communication between you and your lender. You will be able to save your favorites and discard the others which allows your agent to see what you are liking and what you are rejecting so they can refine your search criteria.
The Town & Parish Home Search Tool – We, of course, are very proud of our website. It is tied to our MLS and is updated numerous times a day. You can set up a custom home search to have homes automatically emailed to you at your convenience. Click here to set up a property search or set up an account for yourself.
Step 4: Househunting in real life
After doing your online house-hunting, you will gather a list of homes you would like to see in person. If time permits, we encourage you to ride by the houses on your list. This will allow you to view the neighborhood, the traffic patterns, etc. Once you have decided on which homes you want to see in person, your agent will make the necessary appointments to get you in.
Here are a few tips for house-hunting days:
- Make A Plan: If you have homes to see in Baton Rouge, Ascension and Livingston Parishes, choose one area at a time to explore.
- Carpool: If you are viewing homes with your REALTOR, let them do the driving. This way, you can write notes about each home after seeing them and review what you liked and didn’t like about each home.
- Take Notes: Make notes of each home after your viewing. At the end of your tour, the homes will start to all look alike, and you will have your notes to remind you of which ones are making the cut.
- Keep An Open Mind: Sometimes, homes are being outgrown, and there is a lot of stuff around, or maybe the homeowner just isn’t a great house-keeper. Look past this and see the actual home and try to envision your things in the home.
- Don’t Fall In Love With The Seller’s Furnishings: We all know the home; it’s a Pottery Barn Magazine. The couch is amazing, the bed covering is to die for, and the decor is perfect. Remember: This stuff doesn’t stay! Again, try to look past this and see the actual home. Try to envision your furniture and style in the home.
Whoop! Whoop! You have found the house that meets your needs/wants, it’s in your price range, and you are ready to make an offer.
Your agent will sit down with you and do a CMA (Comparative Market Analysis). This will show you what the homes comparable to the one you want to purchase are selling for, making sure you make an offer that’s on point.
As well as your price you and your agent will talk about immovables you may want to ask for. Refrigerators, Washers & Dryers are the most common items buyers will ask to remain.
Your agent will have been in touch with your lender and know if you need closing cost assistance and what type of loan you are using and you will have a discussion about that to make sure everyone is on the same page.
Along with these things, you will set a time period for your inspections and choose a closing date.
The Louisiana Residential Agreement To Buy Or Sell is a legally binding contract. Hopefully, your agent has given you a copy to review beforehand so that you know what to expect. If not, please do not be shy and ask as many questions as you need to understand every portion of the contract.
You made it! The final step! It’s time to close on your new home.
A few days before closing, you will receive closing disclosures from your lender that you will need to sign. These are important because they outline the terms of your loan. These documents also need to be signed at least three days before closing to comply with the Dodd-Frank Act.
Right before closing, you will visit your new home to do a final walkthrough. You are SO close!
On closing day, you will go to the Title Company you chose with your agent. The seller will be there with their agent, and your lender may come as well. In Louisiana, closing on your new home is a party! Seriously though, the attorney will sit down and explain the documents to you as you sign. Be sure to exercise that hand before you get there! If you are required to bring money to closing, make sure it is in the form of a certified check if over the amount of $2,500.00. After all the documents are signed, you will receive the keys to your new home and can start moving in! Congratulations!
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