Step 1: Make Sure Your Finances Are In Order
Some people know when they are ready to buy and they have their finances in order already, because they have done their homework. However not everyone falls in this category. For most people buying a home is an experience like none other. It takes patience, a little bit of faith and most importantly your finances will need to be in order.
This typically means that you will need to work to reduce any outstanding bills, you will need to have decent amount of money in a savings account (for a down payment) and you may need to start looking for ways to spend less money every month. All of these things will help your credit score which is needed if you
Step 2: Get Familiar with the Mortgage Process
While some people can pay cash for their new home most people will need to finance their home purchase with a home mortgage. This is when the bank lends you money to purchase a house that you want to buy. There are a lot of components to a home mortgage and it is best to learn all you can about the process. The do’s, the don’ts, the credit score and down payment requirements, and what it takes to get approved for a home mortgage.
Step 3: Find a Good Real Estate Agent
A good real estate agent is vital to helping ensure that your future home purchase goes as smoothly as possible. Ask your friends and family who do they use and trust. Look at agent reviews online if available. Your agent should have our best interests in mind so please choose wisely.
A good agent will always want you to get pre-approved for a home mortgage before they start showing you houses that you may or may not be qualified to be. So keep that in mind. They can also get you in touch with the right mortgage lenders so you can get your home search started off on the right foot.
Step 4: Get Pre-Approved for a Home Mortgage
Once you are familiar with the mortgage process and you think you are ready to start looking for a house then it is time to see if you can get pre-approved for a home mortgage.
Do you know how much house you can afford? Probably not, unless you’ve talked with a mortgage lender. Pre-approval helps you in other ways too.
This typically involves giving the lender your basic information such as contact info, employment history, bank statements and past year’s tax returns. Then the lender will pull your credit score and learn more about your financial situation. With that full picture of your financial situation then the lender is able to let you know how expensive of a home you can afford. Then you can start your home search.
Step 5: Determine Your Wants and Needs for Your Home
The first part of your home search involves learning a little more about yourself and what you are looking for in a home. How much home do you need? Does anyone else live with you? Do you have pets? Do you have kids? How close does your new home need to be to your work?
Asking yourself those kind of questions and that will help you understand what your wants and needs are for a home.
Step 6: Start Searching for a Home
Now that you know what you are looking for the funs begins. There are many places to start your home search, but I would first start with searching your agent website. They should have a MLS feed with all of the listings in your area and this will be the most accurate listing information.
Your agent can also send you the specific listings that meet your criteria as well as any new listings that come to market.
Step 7: Start Viewing Homes
This is where you get in the car and go meet your agent at the houses that you want to see.
It is always a good idea to drive by these houses on your own first to make sure you can live with it’s surroundings. If the home passes the curb test then have your agent schedule your showing. This saves everyone a bunch of time.
While in the home make sure you handle pre-offer tasks such as checking about the back yard, noting any painting needs or repairs that would need to be made.
If necessary it may a good idea to bring someone with you to help you make a smart choice.
Step 8: Make an Offer to Purchase
Now that you have found a house you like it is time to make an offer. To do this look at the asking price, have your real estate agent give their estimate of the property’s value, and determine the amount you are willing to pay.
Once you have that amount in your head then you decide on your first offer price. Buying a home is kind of like a chess match. You make a move then they make a move. Your first offer will most likely be counter offered at a higher price. So keep that in mind when making your offer. You don’t want to insult the seller with your offer though so if you really want that house make them a reasonable offer. If that offer is lower due to repairs needed then notate that on your offer.
Step 9: Home Inspections and Other Tests
Once a seller has agreed to your price and your purchase agreement has been signed now it is time for inspections. The most important one being the home inspection. This is kind of safety net for you to make sure the home you want to buy is in good condition. This is where a license home inspector comes in and checks out all the details of the house to make sure everything is safe and in working order. Once complete their inspection they will provide you with a detailed report on the home and any defects they have found. From there you determine what repairs the seller may need to make for you to complete your home purchase. You may also decide not to buy the home if there are room many issues.
Step 10: Avoiding Last Minute Issues
Let’s be honest, things come up in life. You can try to avoid last minute issues with your home purchase by staying focused and actively working to keep your finances in order until your home loan closes.
You need to be aware of some of these last minute issues that can come up so you can know how to prepare for them.
Your real estate agent and mortgage lender should tell you not to buy any news cars, don’t make any undocumented large cash deposits and don’t open or close any credit card accounts. All of which could cause your loan approval to be overturned at the last minute.
Step 11: The Closing
The day has come. Now that it’s closing time you will need to meet your realtor at the closing attorney’s office to sign your paperwork. You will need to bring a certified check for your down payment amount, your personal checkbook to cover any small differences in cash amounts, your ID and any other info that you have been asked to bring.
The closing will seem like mountains of paperwork and your hand may cramp, but it will be one of the best days of your life. You will be starting your next chapter in life so enjoy it.