Buying a house is a challenging process. It requires a lot of research, experience, and effective strategy, especially for first-timers. Here are 7 basic steps which can help you make smart purchasing decisions and an easier buying process.
What Are The Steps To Buying A House For The First Time?
Set Your Budget
Before going through pages of online listings, you must be prepared for both the purchase and ongoing costs of a property. There is an important rule: Don’t buy a house that costs more than you can afford.
When you buy a house, consider your financial situation. How much money do I need? is an intelligent question since homeownership includes a variety of ongoing costs such as home insurance, property taxes, and repair expenses.
Track Your Bank Records and Monthly Expenses
Take a closer look at your bank records to see how much you have spent on everything in a month (phone bills, transportation, food, utilities, etc.). If you still don’t know where your money goes on a monthly basis, Spending Tracker can help. Once you know your spending habits, determine how much you can pay toward a new monthly home payment.
Work with a Mortgage Banker –
Applying for a mortgage is a key step for first-time homebuyers. Here is a list of guidelines to help you get a mortgage successfully:
- Check your credit history
- Improve your credit score
- Estimate how much money you can afford
- Decide what type of loan is best suited
- Get your documents done (income verification, proof of assets, list of liabilities, additional paperwork)
- Research for the best mortgage rates
- Get pre-approved
Mortgage bankers will check your financial information to see how much you can spend and how much they can lend you. After that, your credit gets prequalified. Next, they will check the financial documents you provide. If there is nothing wrong, your credit gets pre-approved. So, make sure to check your credit history and fix any errors since credit scores give you the best chance to own a mortgage.
Do Your Research
Now, it’s time to read through real estate listings on websites, newspapers, or magazines to find a home that meets your current and future needs. There are a few essential things you need to research before buying a house: :
- Surrounding areas and neighborhood
- Costs (down payment, closing costs, property taxes, insurance, etc.)
- Potential properties
- Commute time
- School district
Find a Real Estate Agent
Buying a house is one of the most significant financial decisions in one’s life. That’s why you need to find a reliable real estate agent. Here are some tips which may help you find a helpful estate agent:
- Get referrals from your friends and family
- Research potential candidates to see their profile, experience, and reviews
- Don’t hesitate to interview more than 3 agents
- Carefully check your estate commission
Remember that the more experienced an agent is, the more likely that person will guide you to the right house with the right price. Real estate agents are necessary partners to guide you through this challenging process.
Start Home Touring and Make an Offer:
It would be best if you had a checklist for the houses you visit. Check all details to see whether that house is a good fit for you. Things you need to consider include:
- Wall, ceiling, and floor conditions
- Integrated fixtures & systems
- Water damage and odors
- Electrical system
- Storage space
- Parking area or garage
- Room size
- Yard size, shape, and features
Repairs and maintenance are a package deal. Thus, knowing the condition of your house now may reduce the expenses for future home repairs. Based on the conditions and value of the houses, this step will help when you work with the real estate agent to negotiate a fair offer and a good agreement with the seller.
Close the Sale
Your lender or closing company will provide all the documents related to buying a house to make sure you are the rightful owner of the property. Below is a checklist of mortgage closing documents that home buyers need to sign on the closing day:
- Mortgage promissory note
- Security instrument
- Trust Deed
- Closing disclosure
- Escrow disclosure statement
- Transfer tax declaration (in some states and countries)
At closing, you need to sign all the paperwork required, including your loan documents. Once the seller receives the check – congratulations, you are officially a first-time homeowner!
Buying a house is a daunting process since it requires lots of time and effort. With careful research and planning, you can shorten the path to your homeownership. These steps can make your process accessible, especially to first-time homebuyers.
Are you thinking about buying a house but do not know where to start? Wiggins Auctioneers are here to make acquiring a property easier for you. Contact us to know more.