If you’ve never gone through the home buying process it can feel rather daunting. Some of the latest statistics show that there were 1.8 first-time homebuyers in 2016 with a median age of 34, increasing by two years over the previous decade. No matter what your age, if you’re one of the many who will make that move this year, here is what you should know about the process from start to finish.
Start Researching ASAP
As soon as you even start thinking about buying your first house, begin looking through the real listing listings on websites and in newspapers. Get an idea of how much prices are in the area you’d like to buy, and take notes of the homes you’re most interested in to determine how long they’re on the market. You’ll want to keep an eye out over a period of time, noting any changes in asking prices to get a good sense of the housing trends in those communities.
Get Preapproved For a Mortgage So You’ll Know How Much You Qualify For
Most lenders recommend purchasing a home that is priced a maximum of 3 to 5 five times your annual household income, have only a minimal amount of debt and put down a 20% down payment. There are multiple calculators out there to play with to provide an idea of what you’ll qualify for, but getting preapproved for a mortgage loan will provide a definitive answer. It will also show sellers and their agents that you’re serious about buying.
Find a Good Real Estate Agent
A real estate agent is essential when buying a home – it won’t cost you anything – those fees are generally included in the cost of selling a house and not when buying. The knowledge you’ll get from a skilled agent who is familiar with the area and has strong negotiation skills is extremely valuable – he or she will be there at your side through every step. Just be sure to check references and sit down with the agent to ask questions about their experience in the communities you’re considering as well as to determine the comfort level you have personally as you’ll be working closely together.
Start Touring Homes
Now it’s time to start touring the homes you’re interested in, just make sure that all are in your price range to avoid disappointment. Taking notes, capturing photos or video can help you remember the important details.
Make an Offer
When you find one that suits your needs and your budget, your real estate agent will help you make an offer, negotiating based on the value of comparable homes in the community. When an agreement is reached, the house goes into escrow. This is the period of time necessary for completing the other steps in the process.
The Inspection, Appraisal and Other Paperwork
The offer you made is contingent on the inspection of the property, such as looking for any structural damage or anything that may need repairing. This part of the process protects you if significant damage is revealed. The mortgage lender you received your pre-approval from will arrange for an appraisal which ensures all parties know that the home’s price tag is fair. The lender will also arrange for a title company to handle the paperwork and ensure the seller is the legal, rightful owner of the property you’re purchasing.
The final part of the process is the closing, which is when you’ll sign everything necessary to complete your home purchase, including the mortgage loan documents. Once the lender delivers the check to the seller, you’ll get the keys to your new house.