Buying a house can be overwhelming if you are not properly prepared. It’s easy to get caught up in the excitement of house hunting and make costly errors. A home is a large purchase that will be with you for a long time. Follow these steps to get you started down the path to home ownership.
1. Find a Qualified Buyer’s Agent
Interview several real estate agents to decide who will be your advocate during the home buying process. You will want to find someone who listens to your needs, is experienced, and knows the area in which you’re looking for a home.
2. Know Your Budget When Buying a House
Before you start your search, it’s best to have an idea of how much you should spend. The amount that the lender suggests is often different from the amount you could qualify for with a loan. There are many bills and expenses that are not included when applying for a loan. Your monthly payment should not exceed 30% of your take-home pay. Property taxes are an additional cost to your mortgage payment, so budget accordingly.
3. Make a List of Wants and Needs
There are many features you want in your new home. Make a list that separates the wants from the needs. You’ll likely have to compromise when you are buying a house. After closing, you can explore ideas to improve your space. The paint, carpeting, and appliances in your new home are not permanent and can be easily updated.
4. When Buying a House, Get Pre-Approval for a Mortgage
In competitive housing markets, it can be difficult to buy a house if you do not have a pre-approval letter. Sellers want to be sure that the prospective buyer can afford the home and will take you more seriously if you have pre-approval.
5. Go House Hunting
This is the fun part. You may find your dream house on day one but it also might take you several weeks or months to find the right place to live. Sometimes, you may need to expand your initial search area. Property tax requirements vary from city to city and school districts may overlap in adjacent communities.
6. Make an Offer for Buying a House
When making an offer to buy a house, it is important to do so based on what the home is worth. Rely on your real estate agent’s expertise when you come to this critical part of the transaction. It is possible you may encounter a seller who overvalues their home due to sentimental value. If this happens, or if your offer is rejected, remember there will always be another house. New properties are listed every day.
7. Get a Home Inspection
When buying a house, it’s important to schedule a professional inspection. A home inspection can help you avoid major expenses on future repairs. This preventative step gives the buyer leverage to request the seller make repairs before the sale is complete. You could also negotiate a lower price based on the inspection findings. Follow your real estate agent’s lead when negotiating.