Steps To Buying A New House
It seems like such a simple process until you are faced with the first time purchase of a home. There is much more involved than boy and girl meet house. Boy and girl buy house. Boy and Girl move in. It would be nice if it were always that simple. In truth there are many steps that go on behind the scenes in order to make the sale of a house go smoothly. The problem is that buying a house isn’t something that the average person has the opportunity to practice on before the time arrives. If you follow this guide though you can save yourself a bit of heartache and several really large headaches throughout the home buying experience.
Pre-Qualify for a Loan
Do this before you ever look at a house that you are interested in buying. This helps you avoid looking at homes you can’t get approval for, gives you a guideline to follow as a potential budget, and saves your from finding out after making an offer and paying earnest money that you can’t get approval for a loan. You aren’t married to a company when you get pre approval but sellers will add more weight to your offer if you are pre approved for the amount you offer than if you are not.
Establish a Budget
After you’ve been pre qualified sit down with pen and paper and figure out how much you can really afford to take on each month as far as the total package goes. Keep in mind that there will be private mortgage insurance (assuming you don’t have 20% or more for a down payment), home owner’s insurance, property taxes, maintenance fees, and additional utilities related to home ownership that you aren’t accustomed to paying each month in addition to the principle and interest payments that will be due. Make sure you aren’t setting yourself up for failure and taking on more house than you can really afford. Once you’ve established your budget you have a clear view of the price range you can handle.
Find a Realtor and View Houses
Make sure that the houses you are checking out work within your price range. If your Realtor consistently shows you houses that are outside of your price range or do not match with your requirements (number of bedrooms and bathrooms, special features, etc.) then you may want to find one that will. Once you find a house that you are interested in plan another visit. Never make an offer on the first visit.
Make an Offer
Expect a counter offer but make an offer on the house you are interested in purchasing. Some sellers require earnest money to go along with the offer so be sure you have budget for this possibility. It is important to make your offer contingent upon the results of an appraisal and inspection. You also need to schedule them both as soon as the offer is accepted.
Buying a house is rarely a one step process. These steps are only the beginning. There is a lot of negotiations involved in the typical real estate transaction and there are times when a deal falls through at the last minute. If that happens to you begin the process over again and keep the things you learned during the last transaction in mind for the next one.