No matter what the TV shows might suggest, buying a house takes time. When you first start thinking about a home purchase, it’s easy to let your emotions get in the way. Next thing you know, you are following homes for sale online, sneaking in drive-by viewings, and researching creative ways to finance a house that may be out of your budget. Understanding the key steps to buying a home will help you make smart decisions and prepare for a smooth process, making the buying process fun.
When is the Right Time to Buy a Home?
Before you begin the steps to buying a home, you should answer a few questions first:
- What is your stage in life? Buying and selling a home is expensive. That’s why you should plan to be in the area for five to seven years.
- What is your financial health? To get a loan, you will need a stable income and money for a down payment. Putting down 10% to 20% is recommended. A larger down payment may help you avoid the extra cost of private mortgage insurance (PMI).
- How is the housing market? Look for a home that has the potential to increase in value. A real estate agent can help you determine home values and their potential.
If your answers to these questions show that the time is right for buying a home, the following steps will help you get started.
#1 Get Pre-Approved for a Loan
Visit a lender to find out how much you can afford. They will ask you about your income, assets, and down payment. Your lender will also verify your financial information and submit your paperwork for preliminary underwriting. You will get a pre-approval letter that shows how much you have to spend and that you are a serious buyer.
Prequalification takes a little more work but can help speed up the home buying process.
#2 Find Your Real Estate Agent
If you are like most homebuyers, your search probably started online. While you can do a lot of research on your own, working with a real estate agent is helpful when it comes to finding your perfect home.
A buyer’s agent can help navigate the buying process. They may be able to help you see a home before it hits the market, which gives you an advantage. Your real estate agent can also help you negotiate the contract details, so you don’t overpay.
#3 Start Looking at Homes
Home shopping is the fun part! Before you begin, do your homework. Create a must-have list of features you’d like to have in your new home. If you are buying a home with a spouse or partner, make sure you are on the same page with what you want. Then, share your must-have list with your agent, and they will use it as a foundation for your home search.
Your agent will help you target homes you can afford and set realistic expectations.
#4 Make an Offer
When you’ve found the right home, it’s time to submit an offer and sign a contract agreement with the sellers. Your real estate agent will help you submit a solid offer. If you have a pre-approval letter and a flexible closing date, you may put yourself ahead of the competition — especially if there’s a bidding war.
Agreeing on terms is often the toughest part of the process. Be patient and remember that all parties want the same thing. You want to buy a home, and the sellers want to sell it. An excellent real estate agent can advise when to give in and when to stand firm.
#5 Arrange for a Home Inspection & Appraisal
After the terms of the offer have been accepted, schedule a professional home inspection. Typically, the offer you make is contingent upon a home inspection. The report will let you know about any structural issues or problems you might not see. If the inspection uncovers problems, you can ask the seller to make repairs, lower the purchase price, or cancel the contract.
Your lender will also require a home appraisal that evaluates the value of the property. An appraisal will also protect you from overpaying for your new home. If the home’s actual value is lower than your purchase offer, your real estate agent can advise you what to do next.
#6 Close on Your House
You can breathe now! The last of the steps to buying a home is closing on your new place. During the closing, you will sign a mountain of paperwork, and you’ll pay for closing costs and other expenses.
Congratulations on your purchase — you are officially a homeowner!
Rely on the Sarah Bernard Realty Team to Help You Find Your Home!
The home buying process may not be easy, but having a real estate agent with expertise in the market can save you time and money.
The Sarah Bernard team has the experience you need to guide you through all the steps to buying a home. Contact us now for a complimentary consultation! 317-780-9070