Buying a home in Georgia seems easy enough: you set your price range, determine your needs, and look for homes that fit the bill. Then you pay for it and move in.
The reality is that buying a home is a long and complicated process, and almost never goes as smoothly as you’d like. For an optimal outcome, it’s essential that you understand every step of the process before jumping in.
This guide covers what you need to know about buying a home in Georgia so you can avoid surprises along the way.
Step 1: Evaluate Your Current Financial Situation
Buying a home is an expensive venture, mortgage payment aside. In addition to your monthly loan, you’re also paying for homeowner’s insurance and property taxes, both of which add hundreds of dollars to your total cost. You’re also facing higher utility costs, plus you have to pick up the tab for maintenance and repairs.
Ask yourself, are you financially stable enough to afford a home? If you say yes, will your lender agree with you? They’re going to look at your credit score, savings account, debt, and assets to determine whether or not to approve you for a loan. Your financial profile must look impressive if you want to move forward with your home purchase.
Step 2: Find a Great Georgia Real Estate Agent
Working with a local Georgia real estate agent can be invaluable to the buyer. They not only help you find properties that match your priorities, but can also go to bat for you in negotiations and guide you through the closing process. And since the seller typically pays the agent’s commission, you’re essentially getting this service for free.
Clever Partner Agents give home buyers an even bigger advantage with a $1,000 Home Buyer Rebate. You can use this rebate to help cover the down payment, closing costs, moving expenses, or other costs.
Learn More: What Does a Real Estate Agent Do for a Buyer?
Step 3: Read Up on Local Real Estate Market Trends
If you’re buying a house a Georgia, when you buy can have a major impact on how much you end up spending and how much house you get for your money.
Right now, most of Georgia is experiencing a seller’s market, which occurs when the demand for properties outpaces the supply. This usually results in homes selling quickly and for top dollar, but buyers can still get a leg up if they know where and when to look. Areas like Marietta and Brunswick are a bit cooler, while Tifton and Albany are definite buyer’s markets.
Traditionally, the best time of year to buy a home in Georgia depends on your priorities. If you want to choose from the best inventory, you’ll have more to choose from during the spring and summer. More homes are listed during this time, but will likely move quickly on the market. If you’re hoping for the best deal, you may want to wait until fall or winter. The market tends to slow down when it gets cooler, which means sellers might accept any offer they get.
These trends can fluctuate on a regional and local level. Talk with your real estate agent about the best time to buy a home in your area so you can get the best possible outcome.
Learn More: Will it Be a Buyer’s or Seller’s Market in 2019?
Step 4: Get Pre-Approved for a Mortgage
Getting a mortgage pre-approval isn’t required to start looking for a home, but it can save you a lot of time and hassle later.
A mortgage pre-approval shouldn’t be confused with a mortgage pre-qualification. With a pre-approval, the lender will pull your credit report and review your financial profile in depth. You can use the results to ensure you’re not shopping outside of your price range. The downside, of course, is that the lender will check your credit history, which results in a hard inquiry on your credit profile.
In a pre-qualification, the lender will glance at your credit score and details and give you a soft estimate on how much they can lend you. This figure is subject to change once they look deeper into your financials, so it might make more sense to skip this step altogether and go straight for the pre-approval.
Step 5: Start House Hunting
Exploring homes for sale is often the highlight of the house hunting journey. You can streamline this process by knowing what you need and want in a home prior to starting, and then tweaking your expectations as you go.
For starters, think about what you need from a home (i.e. the things you absolutely can’t do without): How many bedrooms and bathrooms? Do you need a workshop or home office? Then list your wants, such as a nice yard or swimming pool. Share these details with your agent so they can start searching for properties that match your criteria.
You can also use online tools like Zillow to find properties in your area, locate open houses, and narrow your options before reaching out to a real estate agent. Sources like Zillow Research and Niche can give you specific information on neighborhoods and towns, such as crime rates, school system, home values, and market outlooks so you can start thinking long-term.
Your local real estate agent will be the most invaluable resource during this process. They have access to critical data as well as the benefit of talking with homeowners and locals in the area to guide your decision.
Learn More: Free House Hunting Checklist
Step 6: Make an Offer
Once you find your dream home, you’ll need to present a formal offer to the seller to get the house under contract. To do this, you’ll work with your real estate agent to create the paperwork, and your agent will present the offer to the seller’s agent.
The offer will include the price you’re offering along with any contingencies, such as asking the seller to make specific repairs to the home. The seller then has the opportunity to make a counteroffer. You can either accept the counteroffer or create a new offer.
This is one area where having a good agent makes all the difference. The buyer’s agent handles this process on your behalf and can provide guidance on how to create a compelling offer that’s likely to get accepted. Keep in mind that your agent is working for you, not the seller, so they’re just as determined to get the best possible outcome as you are.
Learn More: How to Make an Offer on a House
Step 7: Inspections and Negotiations
When the seller accepts your offer, the home is officially under contract. At this point, you’ll need to schedule a home inspection to uncover potential issues with the home. In Georgia, you can include a contingency that allows you to back out of your contract pending the results of the home inspection. If something dire were to be discovered, the last thing you want is to be stuck with a money trap.
The inspection looks at the home’s major systems, appliances, doors, windows, roof, and structure to detect any issues. Even though Georgia homeowners are required to disclose issues prior to closing, they are only obligated to share information they know about. The inspection may turn up additional information that will affect your purchase decision.
When the inspection is complete, you may want to negotiate additional repairs with the seller. Your agent handles this process for you, but you should know that the seller isn’t obligated to comply. Experienced real estate agents are expert negotiators and know how much they can push back to help you reach a desirable agreement.
Step 8: It’s Closing Time!
The closing day is the final phase of buying a house in Georgia, and is usually met with mixed feelings. On the upside, you’re getting the keys to your new home! But on the downside, you’re also making the largest purchase of your life, which can make any homeowner nervous.
At closing, you’ll have to pay your share of closing costs, unless you’ve negotiated with the seller to cover these costs. These closing costs include origination fees charged by your lender, escrow fees, prepaid interest, the credit report, home inspection and appraisal, and flood certification, among many others.
According to a recent Bankrate study, the closing costs in Georgia average about $2,323. However, the study didn’t take into account the many variable costs, such as title insurance, title search, and mortgage points. Typically, the total cost for buyers is between 2% and 5% of your home’s purchase price, so keep this figure in mind when setting your budget.
To put this into perspective, the median home in Georgia is $188,500, which means that closing costs could range from $3,770 to $9,425. The actual costs will vary from market to market, which makes it hard to pinpoint an exact amount. Working with the right real estate agent can help you set accurate expectations for closing costs so there are no surprises.
If you’re ready to begin your journey into the Georgia real estate market, connect with a Clever Partner Agent that can help you navigate the complexities of buying a home.