Buying A House

Whether you’re a first-time home buyer or bought a house quite a while ago, it doesn’t hurt to review the steps involved in the home buying process.

  1. Line up the finances. Do you have a nest egg ready for a cash purchase? If yes, then congratulations, you are in an enviable position! However, if you need to finance some or most of the purchase of your new home, your first step will be to talk with 1-3 lenders to determine how much house you can afford. What you want to get is a pre-approval.  Most realtors, myself included, will recommend you talk to a mortgage broker or a small bank/credit union before going to a big bank.
  2. Where do you want to live? Once you know what your purchase price maximum is, research home values in your preferred towns or neighborhoods. While everyone has heard the old saw “location, location, location,” believe me when I say where you live is more important than the type of house you buy. You will be happier in a smaller house in your dream neighborhood, than in a large mansion in a neighborhood you’re not crazy about. If you’re unfamiliar with the region, talk to a realtor to get a list of neighborhoods in your price range, then visit each one to get a feel for it. For example, some folks want to be away from it all, while others want walkability to shops and restaurants. Make a list of your favorite neighborhood features, and compare it to areas you visit.
  3. Your must-have list. While keeping location in mind, it still helps save time if you know a few home features that you consider must-haves. Here are the major ones:
    a) Number of bedrooms and bathrooms
    b) Basement, garage, off-street parking?                                                                                    c) Type of property: single, twin, row house/townhouse? Are condominiums desirable or not?                                                                                                                                                      , d) Condition: Move-in ready, needs some updating, fixer-upper?
  4. Viewing available homes. Your agent will schedule a series of showings for you on a day convenient to all parties. It is common for the agent to organize your showings based on distance, focusing on properties within reasonable distance from each other. I personally limit my showings to no more than 6 per day, because any more will cause agent and client to confuse the features of the properties they’ve viewed! I also recommend taking notes about each house; this will help you become more aware of features you like or dislike in viewed homes.
  5. Making an Offer. If you feel that you’ve found “the one,” be prepared to place an offer on the property as soon as possible. Desirable homes can be sold within days of listing, and you want to have all the components of your offer in place to strike when the iron is hot. Your agent will guide you through this step, checking recent sales to make sure your offer price is appropriate and compelling to the seller. Prepare to negotiate with the seller if your price is below asking, or if there are multiple bids on the property.
  6.  Inspections and Appraisals. Most home buyers should get a home inspection, which the buyer pays for after having an offer accepted on a house. Please plan on attending the entire home inspection, which usually takes 2-3 hours. You will learn a lot about the house you are buying, warts and all, which will help you decide whether or not to buy the house, and if you would like to ask the seller to make repairs. Once the inspection period and negotiations are complete, if you are financing your purchase, your lender will arrange (and you will pay) for an appraisal of the property. The appraisal is quite different from the inspection; appraisers determine, based on their inspection of the property and research on recent sales, whether the house is worth the purchase price.
  7. Final Approval of the Loan. If you are getting  mortgage, the final steps of your purchase will revolve around the loan. As long as the lender approves your financials and your purchase price, this last step should go smoothly.
  8. Settlement! On this exciting day, you become the owner of your new home! Mortgage docs are signed, title is transferred, and you are handed the keys to your house.

 

These are the main steps involved with buying a house. If you have any questions about specifics, or steps not included on this page, don’t hesitate to contact me.

 

 

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