Home buying process is like running a marathon. Do not try to rush things and keep your stamina high to successfully complete the race. You can easily make mistakes in your hurry. This is why it is necessary to have a clear understanding of the home buying process so that you know what to do next and what remains to be done.
- Save money to pay for down payment
- Get preapproval from a bank
- Find the right real estate agent
- Start your house hunt
- Make an offer
- Get the house inspected
- Close the deal
As you can see, these are the 7 important stages in home buying. This home buying process is as important as the home you are buying for your family. This is because you want your home to be a blessing for your family and mistakes committed by you can mean a home with a financial burden that will not allow you to breathe.
- Save enough money in your bank account
You need to save money to put forward as down payment for the house you want to purchase. This money could be 20% of the total value of the property but try to save something more as there are many other costs associated with home buying. These include closing cost, moving costs, attorney fee, appraisal cost, and several other costs that you have not anticipated.
- Get pre-qualified for mortgage
This is not a prerequisite for buying a home. But we recommend all homebuyers to get this very important document in their hands before house hunting. You have to submit your financial statements to a lender who takes a look at your credit and these documents to decide how much loan you are eligible to receive. This letter from the lender not only tells sellers that you are a serious buyer but also tells you how much of a home you can afford.
- Find a reliable and experienced realtor
This is undoubtedly the most important step in your home buying process. Half the battle is won if you can find the right real estate agent to work on your behalf. This professional stands by your side from the start till the time the deal is closed. His skills and experience prove invaluable in making home buying a smooth and hassle free experience. His help and guidance comes to you for free as his fee is paid by seller’s agent and not you. Do not hire services of an amateur or a hobby realtor if you do not want to waste your time.
- Begin house hunting
Once you know how much of a home you can afford and also your family’s requirements, it becomes easy to focus upon the neighborhoods and the type of homes you need. You can start your search online but you will find that your agent has knowledge about more homes that fit your budget and requirements. Do your homework about school districts and amenities before short listing the neighborhoods. Don’t jump to make an offer on the first home that you like. According to a report, average homebuyer takes around 10 weeks to settle on a home. Satisfy yourself about the suitability of the house as you do not buy homes every now and then.
- Make an offer
The moment you feel you have found the right house in the right location, it is time to get serious. In tandem with your real estate agent, you need to make an offer for the house to the owner. Make this offer attractive by including your pre approval letter and by showing flexibility in finalizing the closing date. Do not forget to include contingencies in your agreement with the seller such as appraisal, inspection, and mortgage approval. Negotiations are a part of the process as your offer may not be acceptable t the owner of the property. But once you reach an agreement on the price, it is time to move ahead quickly.
- Inspection and appraisal
You can relax a bit after you have signed the agreement with the owner. You now need to carry out professional inspection of the home to make sure everything is in order and there are no major structural issues in the property. Contingencies in your agreement allow you to back out of your offer if there is any major problem found during this inspection. After the inspection, it is the turn of appraisal. It is carried out by your lender to ascertain the value of the property. If the value is found to be lower than the price agreed by the owner and you, you can ask the owner to lower the price of the house.
- Close the deal
This is the last but very important aspect of home buying process. All legal formalities and paper work is completed during this stage before you legally become the owner of the property. You need to pay for the closing costs, home insurance, property taxes, and attorney fee etc before the keys of the home are handed over to you.