Although it may seem overwhelming, buying your first house is attainable with the proper amount of research and preparation. By familiarizing yourself with the process ahead of time, you’ll be in a much better position to make a decision when the time comes. Here are the questions you need to ask—they’re basically the steps to a procedure:
1. Have I Done my Homework?
So, you’re looking to buy a new home. Congratulations! Before you start your research, though, it’s important to take some time to think about what kind of home you want. How much space do you need? What kind of features are you hoping for? Location is also key — consider both the immediate area around the house and the neighborhood as a whole. Once you have an idea of what you’re looking for, keeping tabs on the real estate market will be easy. Read listings in newspapers and magazines, and take note of any homes that interest you. Also, pay attention to how long they stay on the market; this can give insight into trends in specific areas.
2. How Much Do I Plan to Pay?
You shouldn’t spend more than a third of your monthly pay on housing. If you do, you might become what’s called “house poor.” That means most of your monthly income goes towards your home.
3. How Much Can I Actually Get from Loans?
The first pre-requisite to buying a house, condo, co-op, or townhome is getting pre-approved for a mortgage. Bankers can give you an estimate of how much money they are willing to lend you for a mortgage based on prequalification, which only requires that you provide them with some financial information like income and investment details. If later down the road you want to get preapproved for credit, know that this process is more extensive and will require W-2 statements and bank account statements so as to verify both your finances and credit-worthiness.
4. Do I Have the Best Real Estate Agent?
When you’re buying or selling a house, real estate agents are key. They often have access to important details about homes and neighborhoods that the general public cannot easily find out. Additionally, their specialized knowledge in home-buying procedures and powerful negotiation skills make them worth every penny. You don’t need to worry about extra expenses for using an agent’s services, as they receive payment from the commission charged by the seller of the property.
5. Is This the Right Home?
Before you begin house hunting, really think about your budget and what you can afford. It might be helpful to make a list of pros and cons for each land and house package on your list. Also, take down notes and/or snap pictures/shoot videos of places that interest you as reminders; it’s easy to get lost in the shuffle otherwise.
Next, take a close look at everything. Even the seemingly tiny things matter! Test the shower to make sure the water pressure and temperature are up to par. Check that the electricity works by flipping switches on and off. And finally, ensure that windows and doors can be opened and closed without any issues.
Furthermore, you should research the area and take stock of any crucial information. Examine other residences in the vicinity and discern whether they are kept up well. Also, pay attention to the amount of foot and vehicle traffic. Try to envision if you, your family members, and your guests would be able to park on the street. Lastly, determine if the property is close to places that you often go to or need to go regularly like schools, supermarkets, parks, and public transportation stops.
After you’ve found the perfect home and discussed pricing with your real estate agent, it’s time to make an offer. Your agent will help you draw up a purchase agreement, which outlines how much you’re willing to pay along with any conditions (like selling your current home first). If the seller accepts, then it’s on to due diligence! This is the final step before entering escrow and taking ownership of the property, which usually takes a few weeks.
6. Has the House Been Inspected?
Home inspections are typically ordered when making an offer on a home. The inspection covers any potential damages that may require repair and also provides the option to back out of the deal without penalty if severe damage is found. In most cases, your real estate agent will help you set this up a few days after your offer has been accepted by the seller.
After the home inspection, you and the seller will receive a report of what was found. You can then negotiate with the seller to have them fix anything on the property before closing the sale. Before finalizing everything, you will do a walk-through of the house to confirm that any repairs made were up to standards.
7. Am I Paying a Reasonable Price?
A professional appraiser from an impartial company will give everyone involved an estimate of the home’s value, which lets us know you are paying a reasonable price for the property.
8. Is the Paperwork Ready?
Before you finalize your purchase of a house, the paperwork can seem daunting. Luckily, your lender will usually help set up a title company to look through everything and confirm that the seller is legitimate. At closing, you’ll sign all necessary documents for both the loan and finalizing the sale. Usually, your check for loan funding will be sent a couple of days after the back-and-forth of paperwork between yourself and the lender is completed; this check gets then handed off to the seller upon arrival, so you can finally move into your new home!
Home-buying doesn’t have to be complicated. Just remember these questions, and you’ll be in your new house before you know it. Keep in mind that this is a general guide–for more specific details about purchasing your property, check with your real estate agent. Although buying a house may seem like a lot of work, an experienced professional can make the process much easier. So what are you waiting for? Start looking for houses today!