Buying a first home is often considered one of those important benchmarks we hope to reach in life. This is a big step — it means being financially and geographically stable, willing to invest in the future, and ready to move forward to life’s next important benchmarks. While this time can be very exciting, it can also be stressful. Having your first experience with buying a house usually also means having your first experiences with long-term loans, interactions with sellers and real estate agents, home inspections and repairs, and intricate decision-making. Before you take the leap into this exciting life experience, let us give you an overview of the basics of buying a house.
The Basics of Buying a House
Getting pre-approved for a mortgage: what exactly does this mean?
There are some important financial steps you should take before you start searching for a home. One of those is acquiring pre-approval for a home loan. While this step is not required before you can start searching (and dreaming about) your new home, it is highly recommended. Basically, getting pre-approved means you have given the bank a clear snapshot of your finances, credit, and income and the bank has provided you with an estimate for a loan. This estimated number will give you an idea of the price range you should search within for your new home. While it might require some extra time and planning, the comfort of knowing you can receive a mortgage for a home in a specific price range will be extremely beneficial in the process of searching for a home. It will also show home sellers that you are a serious buyer and will give you a leg up in a competitive market and multipe-bidding situations.
How to shop for houses: do your research and go to showings.
Once you have decided you want to buy a home, how do you actually start searching? The first step is hiring a local, trusted realtor. Your real estate agent will help you locate and view houses that are right for you in terms of location, price, and qualities. As you view houses, you'll get a better understanding on what you do and do not like in a home. However, it's always a good idea to have a general idea of what you're looking for in a house. If you're planning to buy your first house with your partner or spouse, you'll need to decide together what kind of home is best suited for the both of you.
What it means to “make an offer” and what it takes to get accepted.
When you find the right home, there is a process that goes into actually purchasing it. The offer process can sometimes be long and go back and forth between buyer and seller. Other times, offers are accepted right away and the process is quick. Your Realtor can make suggestions and help you decide the offer that is right for you. Your offer will depend on the asking price for the home, your valuation of the home, and the potential costs you will incur from necessary repairs to the home. Whether or not your offer gets accepted will depend on a number of factors, including timing, number of other bidders, and appeal to the seller.
Why and how to get a home inspection.
Getting a home inspection on the home you plan to buy is an important step that should not be skipped. Because any home for sale is surely being presented in its best light—sometimes with flaws hidden or hard to find—it’s important to hire a reputable inspector to seek out any potential issues that could cause you trouble in the future. When hiring a home inspector, search for a company with a good record and all necessary licenses for your state. You can always ask your Realtor for a referral. They will know of home inspectors in your area that you can trust. While it might be tough to dish out the cost of getting a home inspection, the cost of not getting one could be far greater. Once the inspection is completed, your Realtor will help you negotiate which of these issues should be fixed by the seller before you move in.
Having a final walk-through: what to look for?
After your offer has been accepted and before you sign the closing paperwork, you’re going to go through what is called a “final walk-through” of the home. The goal of the final walk through is to ensure that the home is in the condition to which you agreed to buy it. This is the time to check for damage caused from the previous owners moving out and ensure that all repairs negotiated during the home inspection were completed properly. Learn what to check for during your final walk-through and download our free final walk-through checklist.
Closing the deal: the best part.
You have taken all the important steps to find the right home: determined a pre-approved mortgage, invested time into searching for a home with your Realtor, inspected the house for any major flaws, made a reasonable offer, ensured necessary repairs, and now it’s time for the best part: closing! Once all parties are satisfied, you can sign the paperwork that seals the deal. Sometimes the real estate jargon can be confusing, so make sure you have your Realtor go over everything in your contract with you to your full understanding. Once you’ve completed the closing, congratulations- the house is yours!
We hope this overview of the basics of buying a house has been helpful. When it comes to making a big life decision like buying or selling a home, it’s always nice to have trusted experts at your side along the way. Please leave a comment and let us know any questions you have—we’d be happy to help!