Buying a house can be an intimidating process, whether it is your first time purchasing a property or you have taken part in several transactions already.
There are many steps and individuals involved in the home buying process. As a result, you need to be ready to ensure a smooth and seamless experience. For example, you may need to prepare paperwork or contact additional professionals within the real estate industry ahead of time to make sure you reach each milestone home buying milestone successfully.
Let’s walk through the home buying process to make sure you’re prepared to close on your dream home!
Calculate How Much House you Can Afford
The first step for buying a house is to know exactly how much you can spend on a property and live comfortably. Do not forget that you may be responsible for some expenses you may not be familiar with if this is your first time owning a home.
Your mortgage payment will include your principal payment, interest, and potentially other costs, such as insurance and property taxes. You will also need to factor in your new living expenses, the cost of maintenance, and an allowance for repairs.
Get Preapproved for a Mortgage
Once you have figured out how much money you can comfortably spend on housing every month, you will need to get preapproved for a mortgage. You may need to shop around to find the best lender and familiarize yourself with different types of mortgages to find the best fit for your situation.
Remember that the amount you may be approved for could be higher than what you should spend on a property. Improving your credit score can also help you get a better deal.
Find the Right Real Estate Agent
Your local real estate agent will be an invaluable ally in the house buying process. Besides, their services are free for homebuyers as their fee is paid through the seller’s commission. Ask for referrals around you to find potential candidates and set up interviews with a couple of agents.
They should be responsive and have an established track record in your local market. Communication is critical since you will spend a lot of time together, and they should support you through a sometimes stressful transaction.
Begin House Hunting
Once you are preapproved for a mortgage and have hired a local real estate agent, you can start on to the fun part: house hunting. It can be overwhelming at first, and some would-be home buyers get burned out by the process of visiting countless houses. To avoid this situation, set up a list of wants and needs and stick strictly to homes that are comfortably within your budget.
Your real estate agent should help you get ready for the house-hunting process and give an idea of what to expect. For example, they can expand your search to other neighborhoods that fit your criteria or prepare you for a sellers’ market.
Make an Offer on a House
Once you have found the perfect home, it is time to make an offer. Depending on the market in your area, your local real estate agent may recommend offering above or below listing price, ask for contingencies, or, on the contrary, wave inspections.
It can be one of the most stressful moments of buying a house. You may need to put in several offers before one is accepted. You should also be prepared to come back and forth as you negotiate with the sellers.
Get a Home Appraisal
Once your offer is accepted, you will need to arrange for different inspections. Your mortgage lender will most likely be the one to arrange for a home appraisal before approving the house loan. The property will need to appraise up or above the selling price.
Get a Home Inspection
You will also need to set up a home inspection to examine the house for any hidden defect within a set time after your offer is approved. Again, your local real estate agent may have some recommendations as to who to hire or avoid.
Once the home inspection takes place, make sure to read the report thoroughly to familiarize yourself with the house. For example, you may need to start planning to replace some elements.
Ask for Repairs or Credits
If the home inspection results are not satisfactory, you may be able to renegotiate your contract and ask the sellers to repair part of the house before closing. Financial institutions may have strict requirements to approve a mortgage, especially when it comes to government-backed loans such as FHA or USDA. If the seller refuses to do the repairs, the sale may fall through.
Do a Final Walk-Through
The final walkthrough is typically scheduled within 24 hours of the closing date. It is time to inspect that all the repairs have been done correctly and that the house is in the same condition that it was when you made your offer, so do not rush the process.
If you find any issues, make sure to communicate immediately with the seller so they can remediate the situation as soon as possible or provide credit. You can find multiple checklists on the Internet about what to look out for when doing your final walkthrough.
Close on Your New Home
Congratulations, you made it to closing day! It is an exciting but often tedious time for any home buyer. Make sure you are prepared to pay for closing costs and have all the paperwork needed for the day to go smoothly. Take the time to read each page carefully and ask any question you may have to avoid mistakes that could impact you for years to come. Finally, pat yourself in the back: you are finally holding the keys to your new home!
Welcome to your new house! After the home buying process is over, make sure that you are ready to start your journey into homeownership on the right foot. Check that all the institutions are up-to-date with your new address and that you are prepared to stay on top of home maintenance as you start building equity into your new property.