Buying a house doesn’t have to be stressful. Below, we outline eight steps to buying a home, so you can get everything right the first time. Follow our helpful buying a house checklist, and you’ll be on your way to owning the home of your dreams.
1. Begin Your Search Early
Start your search by browsing through websites, magazines and newspapers with real estate listings. Take note of the prices of homes you’re interested in and how long they’ve been on the market. This will help you understand the housing trends in your area.
2. Consider Your Finances
Look at your savings and don’t consider buying a home before you have reserve money that will last you 3-6 months. If this is in order, look at how much is left that will go towards your down payment. It’s recommended that you look for a house that costs no more than five times your annual income, especially if you’ll be making a 20% down payment to avoid the burden of debt.
3. Shop Around for a Mortgage
Before you begin your search for a home, you’ll need to know how much you can spend. The best way to do this is to get prequalified for a mortgage. Simply provide your bank with information concerning your income, savings and investments. They will review the information and tell you how much they’re willing to lend you. The amount will give you the price range of homes you should search for.
4. Look for a Reputable Real Estate Agent
A real estate agent is an important asset in your search. Your agent’s prowess in the home buying process, as well as their negotiation skills and familiarity with the neighborhood, is invaluable. The best part is that an agent won’t cost you anything because they’ll be compensated by the seller.
5. Decide on a Home and Make an Offer
Start visiting open houses and touring homes that fit your price range. It may help to take notes or record videos to help you remember the little details you loved about each home. It’s also important to check out the neighborhood for things like accessibility to schools, parks, shopping centers and other important social facilities.
This step is very important, so take as much time as you need to find your ideal home. Then, together with your agent, negotiate an offer based on the price of comparable homes around the area. Once the seller accepts your offer, the house will be moved to escrow until you complete all the remaining steps of the home buying process.
6. Don’t Forego a Home Inspection
Your agent will arrange for an inspection a few days after the offer has been accepted. An inspection gives you a chance to check for any signs of damage on the property and renegotiate or withdraw your offer if there’s significant damage to the property.
7. Get Your Home Appraised
Next, your lender will arrange for your prospective home to be appraised. The appraisal is usually done by an independent third party whose main job is to determine whether the price paid for the house is fair.
8. Close the Deal
The bank will look for a title company to take care of the paperwork and verify that the seller rightfully owns the property you’re looking to buy. After that, you’ll need to sign all the papers and loan documents to complete the purchase. You’ll wait a couple of days for the loan to be funded and a check to be delivered to the seller.
And that’s it. Congratulations as you prepare to be a homeowner!