Buying a house requires a lot of time and effort.
But these 10 steps can help make the home buying process manageable,
and help you make the best decisions possible.
Step 1: Start Your Research Early
As soon as you can, start reading web sites that have real estate listings.
Make a note of particular homes you are interested in,
and see how long they stay on the market.
Also, not any changes in asking prices.
This will give you a sense of the housing trends in specific areas.
Step 2: Determine How Much You Can Afford
Lenders generally recommend that people look for homes
that cost no more than 5 times their annual household income
if the home buyers plan to make a 20% down payment
and have a moderate amount of other debt.
But you should make this determination based on your own financial situation.
Step 3: Get Pre-Approved for Your Mortgage
Before you start looking for a home,
you will need to know how much you can actually spend.
The best way to do that is to get pre-approved for a mortgage.
You just need to provide some financial information to your mortgage banker,
such as your income and the amount of savings and investments you have.
Your lender will review this information and tell you how much they can lend you.
This will tell you the price range of the homes you should be looking at.
Step 4: Find the Right Real Estate Agent
Real estate agents are important partners when you are buying or selling a home.
Real estate agents can provide you with helpful information
on homes and neighborhoods that isn’t easily accessible to the public.
Their knowledge of the home buying process, negotiating skills,
and familiarity with the area you want to live in can be extremely valuable.
And best of all, it doesn’t cost you anything to use an agent.
They are compensated from the commission paid by the seller of the house.
Step 5: Shop for Your Home and Make an Offer
Start touring homes in your price range.
It might be helpful to take notes on all the homes you visit.
You might even want to take pictures or video to help you remember each home.
Take as much time as you need to find the right home.
Then work with your real estate agent to negotiate a fair offer
based on the value of comparable homes in the same neighborhood.
Once you and the seller have reached agreement on a price,
the house will go into escrow, which is the period of time it takes
to complete all of the remaining steps in the home buying process.
Step 6: Select Your Loan
Lenders have a wide range of competitively priced loan programs.
You will have many questions when you are purchasing a home.
Having an experienced, responsive mortgage banker assists you
can make the process much easier.
Step 7: Get a Home Inspection
Typically, purchase offers are contingent on a home inspection of the property
to check for signs of structural damage or things that may need fixing.
Your real estate agent usually will help you arrange to have this inspection conducted
within a few days of your offer being accepted by the seller.
This contingency protects you by giving you a chance to renegotiate your offer,
or withdraw it without penalty if the inspection reveals significant material damage.
Both you and the seller will receive a report on the home inspector’s findings.
You can then decide if you want to ask the seller to fix anything before closing the sale.
Before the sale closes, you will have a final walkthrough of the house,
which gives you the chance to confirm that any agreed upon repairs have been made.
Step 8: Have the Home Appraised
Lenders will arrange for an appraiser
to provide an independent estimate of the value of the house you are buying.
The appraiser is a member of a third party company,
and is not directly associated with the lender.
The appraisal will let all parties involved know that you are paying a fair price for the home.
Step 9: Coordinate the Paperwork
As you can imagine, there is a lot of paperwork involved in buying a house.
Your agent will coordinate with sellers to complete needed contracts and disclosures.
Your lender will arrange with escrow and title company to handle all of the paperwork,
and make sure that the seller is the rightful owner of the house you are buying.
Step 10: Close the Sale
At closing, you will sign all of the paperwork required to complete the purchase.
It typically takes a couple of days for your loan to be funded
after the paperwork is returned to the lender.
Once the check is delivered to the seller,
you are ready to move into your new home!
Do you have any questions about how to purchase a home?
Are you thinking about buying a home?
Feel free to contact me for any real estate needs!
Eileen Tien 田艾茹