Are you ready to buy a house? Here are the ten steps to budgeting for, searching for, and closing on your ideal house.
Buying a house, whether for the first time or to downsize for retirement, is an exciting decision. However, like with any large life changes and financial investments, it may be stressful and intimidating. You may reduce the stress associated with house buying by breaking the process down into easy phases.
Here are the 10 most important steps to buying a property. Simply concentrate on each stage as you complete it and mark your progress as you go.
Determine how much you have available to spend and borrow.
To figure out how much your monthly payments will be, use a mortgage calculator. You probably don’t know the precise purchase price, loan amount, or interest rate yet, but entering in other possible figures can give you a better sense of what to expect before you dive in.
Set a budget that allows you to live comfortably while paying your monthly bills.
Take an inventory of your finances, including savings, equities, bonds, loans, monthly income, monthly liabilities, and assets. Use this as a guide to evaluate how much you can afford to put down and how much you can manage in monthly mortgage payments (remember to factor in taxes and insurance).
Look for a mortgage lender.
Shop around for the lowest rates and conditions, then consult with lenders and brokers to determine which mortgage type is ideal for you. Obtain a reasonable estimate of closing costs (including taxes and attorney fees).
Get pre-approved for a mortgage. Not only will you have a better idea of how much you can finance, but many sellers will not even consider your offer if you aren’t pre approved.
Make a list of must-haves.
Choose your ideal location and lifestyle, whether it’s a bustling city neighborhood or an isolated mountain sanctuary.
Choose the number of bedrooms and bathrooms, as well as the overall size of the house, that you will require to accommodate yourself and your family.
Make a list of the most important characteristics. Chef’s table? Backyard? What about office space? 2 vehicle garage? Make a list and be prepared for it to change as you begin looking at properties.
Make a distinction between must-haves and desirable qualities. Categorizing characteristics by significance will alleviate the pain (and heartache) of house hunting.
Find the right agent.
Look for top agents in your neighborhood online. Request recommendations from friends, family, and coworkers.
Check the qualifications of possible agents and read client reviews and testimonials.
Don’t be afraid to speak with multiple agents and ask them questions to see whether they’re a good fit for you.
Look for your preferred neighborhoods.
Scan listings and speak with your realtor for information on typical prices, schools, market trends, and area amenities such as parks, grocery shops, cafés, and entertainment.
Look up the crime rates in certain locations online.
Try to pinpoint certain streets where you’d want to live. Choosing a city or town in general may not be adequate to meet your individual needs, as neighborhoods might vary greatly from street to street.
Go on a house hunt.
Look through online listings and go to open houses with your realtor.
Set up private tours of any properties you’re interested in with your realtor so you can properly look around, take measurements, and evaluate the features.
Take notes and photographs during your trips. It might be difficult to remember differentiating qualities that set one property apart from another after viewing many.
Change your must-have and nice-to-have list based on the properties you’re looking at.
Get the lowdown on the finalists.
When you’ve reduced your search to a few favorites, request a list of comparable properties from your realtor to evaluate each property’s fair market worth.
Investigate why the seller is selling. It can occasionally help your bargaining technique. For example, if they need to move quickly, they may be more prepared to take a lower offer.
Consider the additional costs associated with the purchase and ownership stages, and request copies of current utility, property tax, and HOA fees bills.
Make an offer.
Make an offer based on the fair market value once you’ve found the home you desire.
Make any required negotiations and come to an agreement on a purchase price with the assistance of your real estate agent.
Before you sign the purchase agreement, make sure to add contingencies and any particular needs you may have, such as repairs and a specified move-in date.
Make sure you have enough cash on hand to pay your earnest money deposit, which is often 1 to 2 percent of the agreed upon price, if your offer is approved.
After your offer is approved, get an appraisal and house inspection.
Request a home inspection referral from your real estate agent, then engage any extra experts required for services not included in a standard examination (typically pool, mold, and pest inspections are separate).
Get a professional appraisal done on the property, and utilize the results to renegotiate if required.
Close the deal.
Make sure your down payment and closing expenses are in order before finalizing your deal with your lender.
The seller will provide you the property title on closing day after which you will request a final title search.
Although many closings now use digital papers, you will still need to appear in person to provide your down payment, pay any outstanding closing costs, and sign additional paperwork. What you need to have ready will be explained to you by your agent.
Congratulations—your new residence is now legally yours! It’s time to move in and furnish now.