There comes a time when most people decide they would like to own their own home. It takes preparation and patience to get into your first house and there are many decisions to make along the way. Fortunately, the process can be broken down into manageable tasks. Here is how to buy a home in seven steps.
1. Get Your Finances in Order First
Begin by getting approved for a home loan. The lender will require documents and statements from you, such as past tax returns and paycheck stubs. Your credit score will be pulled. You do not need a perfect credit score to qualify, but having a higher number gives you more loan options and better interest rates. If you begin working on the mortgage process before you start looking at homes, you’ll have more time to improve your credit score.
2. Get Comfortable With the Monthly Mortgage Payment
After getting approved, your lender will tell you how much you qualify for and what the loan will cost you each month. The amount you qualify for is an important figure, but it is not always the amount you should spend. Sit down and write a budget that factors in your current expenses and lifestyle. Decide how much you are comfortable spending every month. Do not let the lender determine that number for you.
3. A Wants and Needs List is Helpful When You’re Working on How to Buy a Home
Think about what you need in a home. Make a list of must-have items. Some common needs are being close to work, a certain number of bedrooms, and living within a specific school district.
Maybe you want your new home to be close to public transportation, single-story, and have off-street parking. These are things you want but do not necessarily need. For example, you may want a swimming pool, but if a house otherwise met all of your needs, you would likely make an offer.
4. How to Buy a Home With a Real Estate Agent
Get in touch with a real estate agent. Ask for references from family and friends or go to open-house events so you can get to know an agent and decide if you like their demeanor and communication style. Find someone to represent you as a buyer who can guide you through the steps of how to buy a home.
5. Start Shopping for a Home
Plan to take time out of your weekends and evenings to look at properties. In hot markets, you need to be available to view a property as soon as it is listed and be prepared to make an offer. While you are looking, remember your needs list. Don’t allow cosmetic issues to distract you. Things like fixtures, color, and flooring can always be changed.
6. Write an Offer
Once you find a home you like, do not be afraid to make an offer even if you have only looked at a few properties. Making an offer is how to buy a home. Your agent will help you create a fair offer. If it is a seller’s market, you may have to part with a sizeable down payment and be ready to close quickly. Stay level-headed and don’t make an offer for more than you can comfortably afford.
7. Order a Home Inspection
If your offer is accepted, it is time to request a home inspection. A home inspection gives you an accurate picture of the condition of the house. The inspector will check the electrical, plumbing, and heating. Your home inspection report will also cover the roof, siding, and any safety issues.