Buying a house is among the biggest commitments a person can make in life. Whether the home you will be purchasing is your very first, or your last, you may be intimidated by the enormous investment you are about to make.
Read on to learn how to buy your perfect dream home in 8 easy steps.
Review your finances.
Before you do anything else, take a careful look at your finances. You don’t want to make the mistake of falling in love with a home you can’t afford! Before checking out listings, look at your savings. Ideally, you want to have saved at least five or six months of living expenses before committing to a move.
Set up a budget.
Additionally, look at your expenses. Establish a clear understanding of where your money is going, from utilities, bills, and gas, right down to coffees and packs of gum. Then, decide on your ideal mortgage payment. Most realtors recommend buying a house that is no more than three times your gross annual salary.
Meet with a lender to get pre-approved for a mortgage credit.
Now that you’ve determined what you’re willing to spend, it’s time to meet with a lender who can examine your credit score and determine the amount you can qualify for on a loan. He or she will also discuss your savings, 401(k), and local programs that may be available for payment assistance. Such programs are usually available for first-time home buyers, so if this will be your first home, be sure to investigate your options.
Find an agent.
Real estate agents are valuable partners when buying a home, because they can provide you with information that isn’t available to the general public. A real estate agent can provide you with information on the neighborhood, the home’s history, and the home buying process. However, remember that most realtors aren’t working for you. They work for a percentage of the overall cost of the home–usually around 5 to 7 percent–and therefore have a vested interest in encouraging you to pay as much as possible.
For this reason, consider investing in an “exclusive buyer’s agent” like those at Ed Price. This is an agent that is paid directly by you on an hourly or contracted fee. He or she will be able to help you find a home at the lowest possible price, because s/he prioritizes your interests, not those of the seller.
Search for your dream home.
Finally–the fun part! Look at online listings or real estate guides to decide on a home that fits your desired location, style, and budget. As you visit homes, feel free to take notes, pictures, or video recordings to help you keep track of which home is which. Organizing your notes in a binder or notebook may help you narrow down your decisions when it’s time to make a final choice.
Select a loan
When you have decided on a potential home, it’s time to meet with your mortgage broker to select a loan program. Whether you want to ensure your mortgage is as low as possible, or ensure that it never increases, your broker will help you choose the program that best meets your priorities.
Before the deal is sealed, a mortgage lender will make an appraisal of the home to check for signs of structural damage. However, it’s a good idea to hire your own home inspector to conduct a more thorough investigation. The home inspector will determine the home’s overall condition, as well as that of its construction materials, wiring, and heating systems. If the inspection reveals significant damage, you can either ask the seller to fix it before you move in, or deduct the cost of the repair from the final price.
Make an offer and close the deal
Finally, make an offer. From here on out, there is a lot of negotiation and paperwork involved. Your lender will arrange for a title company to handle all of the paperwork, including ensuring that the seller is the rightful owner of the house you are buying. You will also receive a statement from your lender that lists all the charges you can expect to pay at closing.
When all’s said and done between your real estate agent, your mortgage broker, and you, you will finally be able to move into your hard-won dream home.
Get Started Today.
Now that you understand the basics of buying a home, it’s time to get the ball rolling. The experts at Ed Price Realtors have been providing professional real estate guidance to residents of the Triad for more than a decade. Call us today to find out why we’ve been voted the Triad’s Top Realtor for 10 years running.