Buying a house is one of the best financial decisions you can make. There are so many reasons why owning your own home is ideal. These perks include property tax deductions, appreciation, mortgage interest deductions, and much more. Plus, there is just something special about being handed the keys to a home that you get to truly call your own.
Also, you know that when you’re paying your mortgage each month, your money is going towards paying down your home. This is much better than handing rent money over to your landlord – money you’ll never see again or benefit from.
Buying a house is also a very big deal. It’s a huge financial decision that can impact you for years. That’s why it is so important to make sure you follow the right steps when you’re buying a home so that you do it correctly. You certainly don’t want to jump into anything or cut corners, as that can cause serious issues moving forward.
While the home buying process can be lengthy and a bit tiresome at times, if you follow the right steps, you’ll find that it doesn’t have to be as stressful as some people claim. As long as you understand the basics (and have a good real estate agent to help you) you’ll be able to purchase and enjoy your dream home in no time.
1. Figure Out Your Financials
One of the first steps you need to take when buying a home is figuring out what you can afford. While it’s tempting to just jump right into the home search, it’s best to get pre-approved for a mortgage first so that you know what price range to look at. This can save you the heartbreak of falling in love with a house that you later discover you cannot afford.
It’s also smart to check your credit score, as the higher your score, the lower your interest rate may be. A score over 720 is most likely to get you the best mortgage rate, though most buyers who pursue an FHA loan can typically get a loan with a credit score of at least 580.
2. Find a Real Estate Agent
A trusted real estate agent is a very valuable asset to have when you’re going through the home buying process. There’s no need to go at it alone when you could have a professional help you find great homes and craft a winning offer.
Plus, many crucial deadlines must be hit during the process as well. An agent can help you stay on track and ultimately make the entire process much less stressful.
3. Search for the Perfect Home
The next step in the home buying process is the fun one: looking at homes.
Although it sounds simple, this step in the process is usually the step that takes the longest. Choosing the right home is a big decision, and you don’t want to just jump into any house. You must find a property that not only fits your budget and the needs of your family, but also a property that you’re excited about.
There are many ways to look for properties. One of the best is by looking through active listings online. You can also check out this “Home Finder” so that you can be matched with properties that fit your criteria.
Your real estate agent will be your best bet for finding properties quickly, especially since agents often have access to more listings than you do. Real estate agents receive instant updates on new properties that enter the MLS – meaning that they can access properties that you can’t see yet through online searches. Plus, your agent can help you sort through and find the best options.
4. Put in an Offer
The next step is to put in an offer on the property you want and negotiate along with your trusted agent. Ultimately, your agent will help you to negotiate to get the best deal overall by crafting an attractive and competitive offer. If other buyers entered offers for the home as well, you may enter a bidding war.
If your offer is chosen, the home will be taken off the market and will be entered into “escrow.” As the buyer, you will deposit “good faith” money into an escrow account that is managed by an escrow company of your choice. These funds are held while the financing, property appraisal, and property inspection portions are completed. Then, as long as everything goes smoothly, the money will ultimately be applied to the purchase price of the home.
5. Finance Through a Preferred Lender
After the home has been appraised and the property inspection has been completed, you will need to secure financing for the home.
If possible, you’ll want to consider working with a preferred lender for the financing portion of the sale. Check with the sellers or your real estate agent to see if they have a preferred lender available that may offer you a discount or other incentive.
Also, keep in mind that while many people get financing for a home, you do have the option to pay for the house with cash as well. This eliminates the need to pay for interest on the loan and closing costs, and you’ll be able to skip out on many fees as well. It’s an option to consider if your financial situation allows for it. However, paying all cash isn’t an option for everyone, and many opt for a home loan instead.
6. Transfer the Title
One of the last steps in the process of “how to buy a home,” is having the title transferred. This must be completed in order for you to obtain ownership of the property. A title company handles this process, and you can either select the title company you want to work with, or one will be appointed to you through the lender.
7. Close on the Home
Now for the really fun step: signing paperwork!
Even though you’ll probably get hand cramps from signing so many documents, closing on your home is very exciting.
Don’t be afraid to ask questions and consult with your agent about anything that confuses you during this step. Purchasing a home is a huge financial decision, and you want to make sure that you’re completely aware of everything that you’re signing.
Once you sign all of the paperwork, as long as everything looks good, you’ll be handed the keys to your new home and officially become a homeowner. Congratulations!
Now you get to go through the super fun process of packing everything up and bribing your friends and family to help you move boxes and furniture. Good luck!
Are you looking to buy a home right now? Reach out to Scott or Natalie at 435-901-4309/801-244-2367.