9 Steps to Buying a Home
First thing's first! Decide you are ready to buy a home – Buying a home is a big commitment. You want to be sure you are mentally and emotionally ready, that you feel confident in your social and economic environment, and you aren't rushing yourself.
A REALTOR will be able to help you navigate the remaining step. They are professionals and can offer consultation, help with paperwork, decisions, and keep you from making mistakes, or missing things that might end you up in hot water later. Finding a REALTOR that you mesh with is important. You want to be able to trust the person you’re working with. Having that agent be from a reputable agency is a good start, because they are often supported themselves through continued training, coaching, camaraderie, etc, and may give you a leg up against the competition.
Before you begin looking at houses, you need to know what your budget is. A lender will look at hard assets, job history, and credit score, and work with you to estimate what monthly payments or loan amount would be feasible. There’s lots of different kind of programs out there, but this is a good starting place. If you don’t already have a bank or credit union already, your agent can help you pick out a program that will work for your particular situation.
It can be boring, but having a list of must haves, and do nots will help your agent know what to show you will keep everyone from wasting time. This list will likely change as you start touring houses, and your REALTOR can help develop this list by asking questions, and offering up ideas you may have not thought about. “Can both of you pass each other in the hallway without bumping into each other?” “Will having the washer and dryer downstairs be a problem later?”
Finally, the fun part! Actually beginning the home search can be a lot of fun, but it can also be stressful, so having your list made ahead of time will help. Your REALTOR will help you make appointments, and can accompany you to see any houses for sale. They often are full of insight you might not always think about so take them along. But maybe leave your 13 cousins at home.
You found the one! Congrats! Now the hard part begins. This is when your REALTOR becomes extra important. Making a competitive, alluring offer to a seller, without compromising your wants, needs, and finances can be tricky! Earnest money. This is when you will ask for any contingencies, such as making sure the seller fixes damages or leaks, a home inspection is performed by a professional, specify which appliances or draperies you would like to stay in the home, who pays closing costs, or maybe waiting until your own home sells first, etc. A REALTOR can help you navigate this. If your offer is accepted, wonderful!
Now you need to ACTUALLY get the loan together. This will be done with a mortgage broker that you trust, and it can look different for everyone. There might be mortgage insurance, it might be cash, you could be getting a down payment program. This is where some things become very important: Do not change jobs before you close. Do not make another big purchase, like buying a truck, or RV. You will need to have enough cash on hand for escrow, closing costs, etc. But don’t worry, your REALTOR should explain all this to you.
While not technically necessary, almost all REALTORS will suggest a home inspection be completed, and will have a list of reputable inspectors for you to choose from. They will go through the house and make sure there’s nothing damaged, or dangerous, that may have been missed by you or the seller. Perhaps there’s no insulation in the attic, or the gutters are clogged, or the Radon is high, or there is a leak nobody has noticed before. When an inspector finds these things, so long as this was in your contingencies, you can ask the sellers to remediate these things before closing, or you can adjust your offer with these new findings and do them yourself later.
Once you have the loan all in order, you’ll have to set a date with the title company, you’ll go down there, pay closing costs, etc.
Congratulations homeowner! We knew you could do it. You should get the keys after closing and be free to move in! Be sure to store all documents from closing somewhere safe. Generally, your deed is always stored at the courthouse, so if you receive letters about people offering copies of your deed for a charge, they're probably scams. If you have any questions about things after closing and the legitimacy of inquiries, you can always contact your agent.
If you just need that added bit of peace of mind, ask your agent about a "Home Warranty" to cover you from any surprises during the first year. This usually includes things like appliances surprisingly breaking, or if a heater dies in the middle of winter, you won't be left with the bill, so long as everything was in working condition at the time you purchased the warranty. If you're prone to bad luck, this might be something to consider.