Looking For Steps in Buying a House?
Thinking about buying a house, but really don’t know where to start? There is a method to buying a home and using these steps can help make the home buying process easier and fun! Do the work up front and you’ll thank yourself later, and even save yourself a few bucks.
Get Pre-approved for a mortgage before you start shopping for a home. If you were the Seller, would you accept an offer from someone who may not be able to pay for your home? My guess, is that you would say absolutely not! This gives you time to decide on mortgage options, tells you how much home you can buy and provides the lender with the necessary information in ample time so the closing is not delayed. Delays happen because the lender did not have time to review all the documents or needed additional paperwork. Buying a house can be stressful, even if this is not your first time. But being ready and prepared will help you look forward to the closing. Many Sellers will not consider offers with Buyers who are not pre-approved. Remember, the Seller has to remove his home from the MLS once an offer is accepted. So, they are looking for a solid Buyer who has done the homework necessary to purchase a home. Plus, if you are competing with other Buyers, the Buyer that is pre-approved will be seriously considered before one that is not.
Understand Your Mortgage Loan Type
I see many Buyers and their agents do not understand what type of mortgage the Buyer has. Certain loans have approval conditions that some homes may not pass. For instance, you cannot buy a fixer-upper if you are doing a traditional FHA or VA Loan. There are rules for every mortgage and that house has to pass the appraisal. The mortgage lender usually charges up front for the appraisal, which means if your house doesn’t pass the appraisal, you may be out $300-500 per appraisal. Knowing your loan type and the conditions attached to that loan will save you time and keep you from losing money.
Know Your Budget
Many times, the amount of money your mortgage lender approves you for may be different than what you feel comfortable spending. Get a home that is financially comfortable for you. By looking through your monthly expenditures, you will have an idea of what you want to spend on a home. Your mortgage lender can calculate monthly house payments for you so that you can get a better idea of what you will be spending per month. A mortgage lender can give you search criteria to work off of when you are shopping for a home. For instance, the lender may say look for a home between $300,000-$330,00 with property taxes being no more than $1500 per year. That will make your home search easier and know that you will qualify to purchase the home you placed an offer on.
Choose a Realtor
Look for an agent that has experience and knowledge in the area that you are wanting to live. Best advice is to interview at least 2 agents. Choose one that you know is a full-time agent. There may be pressure to use a member of the family or a good friend. My advice is unless they know your area of choice and have ample experience, it probably is best to separate business from pleasure. This is a large purchase.
Do Your Homework
There are great websites, such as Realtor.com that can provide you with neighborhood information, prices and recent sales. You will get a good idea of what things cost and your budget. If you have an idea what homes are selling for in certain areas, you’ll know how to place an offer and where that offer should end up. Not every home listed for sale is priced according to the market. Some homes are overpriced or the condition is not in line with the price the Seller is asking. A prepared consumer is a smart consumer. You may find a good deal and get a jump on it before someone else because you researched the area first.
Make a List
Know what you want in a home. Create a must have a category, a maybe and a non-negotiable list. Unless you are building new, which you may want to consider, understand that some things that you want, may not be in that home. Sometimes, there must be a compromise. If you know what you are willing to compromise on, your house hunting will go smoother.
Plan for Showing Times
Most homes are occupied and an appointment has to be made in order to view the home. You may have to take a half a day off of work or arrange for a babysitter. It is recommended to not take small children while house hunting. It can be distracting for you and you may miss what you are really looking for.
Choose Your Home Inspector Before Your Buy
When an offer is accepted, there is a short window of time to get the various inspections done that you need. Instead of scrambling to get someone, start early. This will allow you to get a good inspector, perhaps read reviews, and decide without having to hurry.
Shop for Homeowners Insurance Early
- When you have time, you can look for better deals and understand what is covered and what an additional expense is. Knowing your insurance assists not only with your budget but helps the lender provide you with an accurate house payment. Bad surprises close to closing are far from what you want to experience. You may be hit with a high bill due to location, flood zones, etc. If you know the where you want to purchase, speak with an insurance agent early, they can save you money and provide you with an estimated expense.
Know the Utility Companies
If you are new to the area, or you haven’t had a relationship with the utility companies in the area you are moving to, you may be required to pay deposits. Make sure you inquire about the deposits, they can add up to hundreds of dollars.
Purchasing a home can be an exciting time. Being prepared and following these steps in buying a house can make the experience even better!