How to buy a home in Raleigh, NC

There is much to consider when buying a home in Raleigh, North Carolina. Not only will you be on the hunt for your perfect home, but you’ll be buying in one of the nation’s hottest real estate markets. Of course, a few factors go into play, such as your target neighborhood, price point, and desired timeline. But, with a bit of patience, an open mind, and a knowledgeable Real Estate team by your side, buying a home in Raleigh is well worth the effort! At Acorn Real Estate Company, we not only know the in’s and out’s of Raleigh and its unique market, but we can guide you on the finer details, like due diligence vs. earnest money, applying for loans, and how to pick the right home for your family. But today, we will walk you through the buying process in Raleigh.

Save for the down payment

A few years ago, saving for a down payment was one of the most important and preached upon steps in home buying. Even in this economic climate, it still is, but it’s just one of the many moving puzzle pieces. It’s recommended that your savings equate to 20% of the listing price [to put down], which can cover inspection, closing-costs and ultimately lower your mortgage. However, saving for due diligence and earnest money is equally important when looking to buy a home in Raleigh, NC. (Of course, there are several factors at play in which having a robust down payment may not be necessary, such as utilizing a VA or FHA loan if applicable)

Get pre-approved for a mortgage

So you’ve been saving, have a steady income, and are you ready to take the plunge and become a homeowner? The next step is to get that pre-approval letter in hand! Getting pre-approved for a mortgage can be an intimidating but essential step. In North Carolina, most sellers won’t show a home without you (the buyer) having a pre-approval letter. This mortgage pre-approval letter is an offer that shows you the amount of money a bank is willing to lend you for a home. Also, note that most lenders require your debt-to-income ratio to be less than 36% – including your future mortgage. This ratio is critical to have in mind as you simultaneously save for a down payment and pay down any debt to better level your debt-to-income ratio. Comparing lenders is also an important step to ensure you’re getting the best match and interest rates for your needs. Lenders will consider the whole picture of your financial situation – including but not limited to income streams, cash reserves, revolving debt, etc. So before leaping to get your pre-approval letter, it’s best to take some time to dive deep into your finances and make sure they are in good standing.

Location, Location, Location

We’ve all heard it before; location, location, location! That’s because it’s true. You can craft a house inside and out into your dream oasis, but you can not change the physical location of your home. Finding an area you love is a step not to be looked over. However, finding out the price point you fit in can help narrow down neighborhoods you can afford. There are many additional factors to consider, from schools and parks to accessibility to amenities. Commuting can be a massive factor for many families and individuals, so be realistic with yourself; how far are you willing to drive, what are you ready to sacrifice, etc.?

Need help narrowing down an area? At Acorn Real Estate Co., we are ready to be your homebuying ally.

Find the right real estate agent for you

With hundreds of agents to choose from, you may feel overwhelmed with choosing a partner to help you find your dream home. However, the right real estate agent will not only understand the market and hustle to get the deal, but they will be an ally in your corner every step of the way. It’s even encouraged to interview different agents, as this will be one of the most significant purchases you make in your lifetime – you want the person to facilitate it alongside you to be a good match. Homeowners who’ve had positive experiences with their agents are often more than happy to share that and pass along the information. However, if you’re starting your search from scratch, you’ll want to consider the agent’s knowledge of your target location and price point, years of experience, and how their process works before committing. Want an in depth guide to finding the right agents for you? We have you covered here: Questions to ask your Raleigh Real Estate Agent

Go house hunting

Now for the fun part, the house hunting! Though the days of taking your time in open houses may be amiss, searching for your ideal home is still an exciting step for many. First and foremost, make sure you’ve compiled your list of must-haves and nice-to-haves and share this with your agent. Though you may feel strongly about your lists, it’s important to remember that flexibility is vital in a hot market like Raleigh, NC. An agent can also help you understand if your list of must-haves is realistic within your budget. It’s also important to remember that if you’re moving from out-of-state or unable to see homes quickly, making an offer sight-unseen or having your agent do a video walkthrough is standard in markets such as Raleigh’s.

Make an offer

This step is where you can rely on your agent’s expertise. In North Carolina, especially Raleigh, buying requires moving fast and making a solid deal. You may be making offers on several homes before one is accepted, and depending on the time of the year, the inventory could fluctuate. If you’re wondering what is included in an offer, your agent will walk you through this diligently and efficiently. Your offer could consist of all, some, or none of these options depending on several moving factors: Seller concessions, repair credits, inspection contingencies, and a letter to the seller.

Pass inspections and appraisal

If the buyer accepts your offer, there are still a few steps left before the keys are in your hands. These critical steps will shed light on the home you’re purchasing and give you a chance to walk away if you decide the home is no longer right for you. An inspection is as it sounds; a thorough look at your home down to the bones. If there are any minor or major repairs or discrepancies in the home’s structure, this is where you will find out. There are additional inspections you can elect to conduct in North Carolina, such as radon testing, pest and termite, and septic system if applicable. An appraisal is on the financial side of the process, in which an appraiser hired by your lender examines the property to determine your home’s worth. The most important takeaway from an appraisal is that if the lender comes back with a number lower than the accepted purchase price offer, you will either have to re-negotiable the price or come up with the difference.

Final Walkthrough and closing

Once the inspection is done and the lender approves the offer, you’re ready for the final step. Walkthrough and close! Closing is when the mortgage is finalized, and the ownership is transferred of the property. This step involves a lot of formalities and signing of documents, so be prepared to spend some time on closing day finalizing all documents. These include your final loan application, the deed, the promissory mortgage note, and the disclosure statements. Your agent will also conduct a closing walkthrough prior to this to ensure the property is in expected condition before ownership is transferred. The final payments of the transaction are the closing fees. Closing fees are divided into four categories: Lender fees, title and escrow charges, prepaid costs, and other closing costs. After all of this is said and done, it’s time to open the champagne because you’re a new homeowner!