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How to Buy a Home in Kentucky

Thinking about purchasing your first home, but not sure where to start? Here’s how to buy a house in Kentucky. While each transaction is very different, here are some basic steps to expect. 

1. Talk to a Lender

Before you start looking for houses, you need to know what you can afford. Talking to a lender about your finances and what you want your monthly payments to look is the first key step in buying a house. They will look at your finances and give you advice about what you can realistically spend each month on your mortgage. Ask your lender how much your monthly payments will be if you buy a house at $250,000 versus $200,000. Be sure to have them include taxes, insurance, and mortgage insurance if required. 

You can ask your lender about all the loan options they offer and which ones make the most sense for you. Give me a call if you’d like some great recommendations for lenders in Owensboro!

2. Call a Realtor

The second step for buying a house is to call a realtor to help you search for houses and eventually write a purchase agreement. As a buyer,  having a realtor does not cost you ANYTHING! The sellers typically pay for the realtor, so you should take advantage of this opportunity. It is essential to have a realtor guide you through the home buying process and sift through all the contracts and paperwork involved with buying a home. There are many things that can go wrong, so you want to have an expert on your team who can help you every step of the way. Give me a call if you need a realtor to help you!

3. Find a House and Write a Purchase Agreement

The next step for buying a house is to start looking for properties and ultimately to make an offer. The property search phase can take a very long time. Give yourself several months to find the right house. 

Let your realtor know what you’re looking for.

  • Do your best to pick 3 items on your must-haves list. Some people don’t really know what to put on this list until they actually start looking at properties, so don’t worry if you’re having trouble.
  • Your 3 must-haves will most likely change as you start shopping as well. When they do change, be sure to tell your realtor so they can update your criteria.

Once you find the perfect house, your realtor will write up a purchase agreement for you so you can start the back half of the buying process!

Inspections, Appraisals, Title Work

The next part of buying a house is the “under contract phase.” Here’s the typical order of events:

  1. Inspections- We will schedule a home inspector to look through every part of the house including the roof, crawl space, and plumbing. If there are any major deficiencies (there is always something!) we will negotiate more with the sellers. 
  2. Appraisal- The bank will send over an appraiser to make sure the home is worth what we agreed to pay for it. If your appraisal comes back too low, we will negotiate more with the seller on the price of the home. 
  3. Title Work- While all the inspections and appraisals are happening, the title company is working tirelessly to make sure the home is in good standing to sell. If there are any issues with the title, we will work through that with them and the sellers to correct any errors before closing.
  4. Underwriting- Lastly, none of this can happen without the bank’s approval. Your loan officer will be sending your loan through underwriting, checking your credit, and all the necessary paperwork to get your loan approved before closing. This process takes about 30 days. Once we get final approval from the bank, it’s time to set our closing date!

This is obviously a very shortened version of the process, and it is almost never as easy as it sounds! Luckily, your realtor will be able to anticipate most problems and can walk you through any hiccups that occur. It can be scary, but not if you have great representation!

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