The process of buying a home can be a stressful one filled with lots of emotions, which is why we think one of our most important tasks is helping our clients get through the process of buying a home as easy as possible.
To help simplify the process at first, we’ve created a guide to purchasing a new home.
Step 1: Talk to A Lender
Your lender should be your first stop when you’re looking into buying a home. One of the first questions your real estate agent will ask you is if you are pre-qualified. The best thing you can do for yourself is get pre-qualified before you start looking in order to avoid looking out of your price range.
When you talk to a lender, you’ll also need to determine what loan program you will be using (Conventional, FHA, USDA, etc.), as this can drastically change the process of purchasing your new home.
You’ll also need to make sure that you provide your lender with the documentation they request so that they can verify your debt to income ratio.
Step 2: Finding a Home
Step 1 and 2 are typically switched by most buyers; however, your agent will not be able to provide you the service you require if they are looking in a price range that doesn’t line up with your financing options. After you have nailed down your price range, it’s time to start looking for a new home.
Research your desired location in order to find all of the information you can about the area. If you’re new to the area, visit the local City Center or Chamber of Commerce. They will be able to provide you statistics for the area that your agent may not be able to provide immediately.
Be up front with your agent, and ask as many questions as possible in every house you tour. We’re all here to assist with anything our clients need, and the best thing you can do is gather as much information as possible.
Finding the right home should be the most fun step for you as the buyer, so be sure to make the experience enjoyable.
Step 3: Negotiations
Once you’ve found that house that ticks as many of your boxes as possible, it’s time to make an offer. Determine the best price to offer with your agent, and be sure that you are offering around fair market value.
Negotiations often go sour after about 2 or 3 counter offers, so be sure to come in strong enough to be able to work with the seller while also protecting your investment.
Once your contract is accepted, it is extremely important not to open any new lines of credit (credit cards, car loans, etc.). Do not quit or change your job at any time before closing on the deal. These two can shut a deal down almost instantly.
Step 4: Homeowner’s Insurance
After a deal has been negotiated, contact an insurance representative at a reputable company to set up the necessary steps to insure your new home.
Typically, buyers will combine auto & home insurance at one company in order to save money on their insurance rates. Talk to your agent about the best policy options for you.
Step 5: Home Inspection
The home inspection process is a tricky one, and many deals fall through in the inspection. Be ready to negotiate, but do not expect the seller to fix everything you request.
Most likely, if the seller has never experienced an issue with it, they won’t fix it. For example, if the heat pump is 16 years old but never had a problem, the seller is not likely to replace the entire HVAC system.
Be sure that anything the seller agreed to fix is finished before the final inspection/walkthrough.
Step 6: Time to Close
If you’ve made it this far, you should be good to go! It’s just about time to start moving into your new house. All that’s left to do is pay the seller and close the deal! You’re good to pack up and start enjoying your new home!
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