Are you thinking about buying a home? Knowing the steps to buying a home will assist in making the process a smooth transaction rather than a surprise filled struggle with possible regret. There are many reasons that an individual or family will decide it is time to buy a home. You may have expanded the family, become an empty nester, need to relocate for work, or just want a change of scenery. Whatever the reason for your new found desire, make sure you are knowledgeable and prepared for the process.
Buyers cannot know enough or ask enough questions for what could be the largest investment of your life. Below is a general guide for buyers to follow. Each property, community, and even property seller will have unique circumstances to consider. Along with this there are also special attributes to specific programs geared towards assisting buyers with home ownership.
- Should you buy or rent
– Consider the costs associated with ownership. If you currently rent, your expenses are very likely to be straight forward and contained for the most part. However with homeownership there are expenses such as yard work, exterior and interior upkeep or repair, as well as taxes and insurance premiums once covered by someone else that you are now responsible for as the homeowner. Take time to analyze the pros and cons of renting vs. buying to be sure you are financially ready.
- Understand your finances
– Have you checked your credit score? If there are any errors, have you corrected them? The better your score the more finance options you will have and the better your loan qualification will be. Look at everything from your debt to income ratio, your available funds for a down payment, inspections, closing costs, and even fees. Large purchases prior to buying should be avoided. Also, even though the touted rule of thumb is that your home’s cost should be around three to four times your household income, is this really feasible? Can you afford that monthly payment as well as the everyday bills and maintain the lifestyle you would like to have? You are best judge of what you can afford if you review everything honestly. Remember you cannot know enough or ask enough questions. Several mortgage calculators can be found on the web that can assist you in determining your spending limit.
- Find a Mortgage Lender and obtain pre-approval
– Once you have your finances in order, shop around and take the time to speak with multiple lenders and discuss the best finance options available to you. The main types are Interest only, Adjustable and Fixed rate mortgage loans. There are pros and cons with each. A pre-qualification letter, which is not a guarantee, shows how large a loan you may qualify for. A pre-approval letter is a guarantee, as long as there are no drastic changes in your financial commitments or employment. It doesn’t mean you have to spend to the pre-approved limit, but if you do find a home and you are ready to extend an offer it will be more enticing to the seller since your financing has been secured. Some sellers require buyers to be pre-approved before they will consider your offer.
- Find a Real Estate Agent
– A good real estate agent is your best advocate and will be with you each step of the way. Not only can they help you find a home, but their expertise is essential to a smooth process. There are many rules, regulations, and paperwork that can make the smartest of homebuyers frustrated and slow the purchase down or worse cost you the home of your dreams.
– Before you commit to an agent, understand their role and their loyalties. A good agent will patiently work with you and help you understand the process from beginning to end.
- Determine where you want to buy
– Do you have a general idea of the area where you would like to focus your search for a home? Your real estate agent should provide you with an evaluation of homes for sale and recently sold in your desired area, as well as information on schools, shopping, crime, services and transportation. It’s important to understand the resale values, the turnover rate, and if there are any new developments in the area that could change the dynamics.
- Find your possible home match
– Have you made a list of your ‘nice to have’ desires? Always look deeper to not only consider what you would like to have, but what you must have in a home. Look at the street, are the surrounding properties maintained, is there an HOA, does the sun rise to face your bedroom windows, will your current appliances fit, and so on.
– When you walk through a home do not be afraid to reach out and touch things. Turn on some water, flush a toilet, open and close some windows, etc. Function and daily comfort are items that are often overlooked. Imagine your items in place, waking, sleeping, cooking, and having guests, and so on. A homes flow and how you relate is essential.
- Make your offer
– Your agent plays a key role for you here. They will gather research on neighborhood properties and help you draft and submit a fair and negotiable offer for your property of interest. They will also guide you through the process of negotiation, which is very common and explain any items from the contract that are not clearly understood by you.
- Once your offer is accepted get an inspection
– Know before you close! Make sure that you have a certified inspector look at and inspect your home. The American Society of Home Inspectors is a useful site to review. It is also recommended that you are present, although you do not have to be, when the inspection is done. Your Real Estate Agent will also work with you to determine if additional inspections should be done for the property you are interested in.
- Successfully close
– Check and double check, call and follow-up your earlier calls, follow each day the progress of your closing as the date nears. Address any questions immediately and do not be afraid to ask about charges you do not understand or disagree with. Once you have completed the closing, signed all the papers, and the settlement is concluded, take a minute to enjoy the latest accomplishment and celebrate your new home!
It may seem as though there are many steps involved in purchasing your home, but do not let what may seem overwhelming keep you from the American dream.
For more interesting information and household tips, stay tuned to this blog. For more information about buying or selling your home, or to see current homes in your area, visit https://www.bidselect.com. Don’t forget to join our online community by connecting with us on Facebook and Twitter.