10 Steps to Buying a Home
Buying a home takes up a lot of time and effort. There are ways, however, to make the home buying process manageable and help you make the best decisions possible. These 10 steps are just that.
1. Start Your Research Early
As soon as you can, start reading real estate listings in:
- Web sites
- Newspapers
- Magazines
Take note of any particular homes you are interested in. Go ahead and see how long they stay on the market. Also, note any changes in asking prices. This will help give you a sense of the trends for housing in specific areas.
2. Determine How Much House You Can Afford
Lenders generally recommend that people look for homes that don’t cost more than 3 to 5 times their annual household income. This is especially true if the those buying a home plan to make a 20% down payment and have a moderate amount of other debt.
3. Get Prequalified and Preapproved for a Mortgage
You will need to know how much you can actually spend before you start looking for a home. Getting prequalified for a mortgage is the best way to do that. You will need to provide some financial information to your mortgage banker, like your income and any savings and investments you have. Your lender will review the information and tell you how much they can lend you. This will give you the price range you should be looking at when buying a home.
4. Find the Right Real Estate Agent
Real estate agents are an important part of buying a home. They are your partners. They can provide you with information on the homes and neighborhoods that isn’t easily accessible. Their knowledge can be extremely valuable, such as:
- The home buying process
- Negotiating skills
- Familiarity with the area
It doesn’t cost you anything to use an agent. They’re compensated by the seller of the house through the commission.
5. Look for Your Home and Make an Offer
Start touring homes that are in your price range. You will see plenty of houses. It tends to be hard to remember everything about the, so it may be helpful to take notes, pictures, or video of all the homes you visit to help you remember them. Then work with your real estate agent to negotiate a fair offer based on the homes in the same neighborhood.
6. Get a Home Inspection
Your real estate agent will help you arrange to have the inspection within a few days of your offer being accepted by the seller. You and the seller will both receive a report on what the home inspector finds. Then you can decide if you want the seller to fix anything on the property before closing the sale. You will also have a walk-through of the house before the sale closes. This gives you the chance to confirm that any agreed-upon repairs have been made.
7. Select Your Loan With a Mortgage Banker
Lenders have a wide range of competitive loan programs and exceptional customer service. You will have a lot of questions when you are buying a home. Having experienced and responsive mortgage bankers assist you will make the process much easier.
8. Have the Home Appraised
Lenders will have an appraiser provide an independent estimate of the value of the house. The appraiser will be part of a third party company and not directly associated with the lender. The appraisal will let everyone know that you are paying a fair price for the home.
9. Coordinate the Paperwork
There is plenty of paperwork involved in buying a home. Your lender will have a title company handle all of the paperwork. They will also make sure that the seller is the rightful owner of the house you are buying.
10. Close the Sale
You will sign all of the paperwork required to complete the purchase at closing. This includes your loan documents. It typically takes a couple of days for your loan to be funded after the paperwork is returned to the lender. You can move into your new home once the check is delivered to the seller!
If you are thinking of buying a home, give us a call. Our agents have decades of experience and want to help you find the home of your dreams.