Buying a house is one of the most common dreams for people in the US. It gives financial and accommodation security and allows people to create their life. Statistics reveal that over 6.5 million homes were sold in the US during 2020. Buying a house is exciting, but it can be problematic if you do not know what you need to do.
Therefore, we are going to talk about the 10 steps you need to follow when buying a house. These steps will make the home purchase process easier for you, and ensure you settle into your property in no time.
How to Buy a House in 10 Steps
Following are the most important 10 steps you need to keep in mind while buying a house.
1. Start Researching
Research is the first thing you need to do as soon as you decide to buy a house. This research can come from various sources including internet articles, guides, magazines, newspapers, or others. Track homes that you like and keep an eye on their prices for better guidance.
This simple research will help you get a clearer image of your potential purchase when you visit the market or think of making a purchase.
2. Determine your Budget
Setting a budget for a home is important because it can impact the complete purchase process. Experts recommend that your house value should not be more than three to five times your monthly income. It is because this amount is easier to maintain and pay off for the house cost in the long run. These experts also suggest paying 20% as a down payment and reducing the total debt.
However, it is best to make these decisions based on your specific condition if you do not want to land into financial trouble later on.
3. Get Preapproved
A quality preapproved mortgage can help you determine how much you should invest in your home. It will also help you determine how much you should spend on the home costs. However, we suggest that you get a preapproved mortgage. It is not difficult to get a prequalification as you will have to provide some basic financial information only.
The lenders review this information to determine how much they can and should lend you. It will also help you get a price range for the kind of homes you should look for. The financial documents you need to provide include some of the following:
- Paycheck stubs
- W2 statement
- Bank account statements
4. Consult with a Professional
Although there is plenty of information online, it is better to consult with a professional too. You wouldn’t want to spend your money and time on a property that isn’t worth it. Fortunately, real estate professionals can help manage these problems better.
They can help you get a clearer picture of the real estate market at the time and the best course of action towards it. The best part is hiring these professionals doesn’t cost anything unless they successfully close the house purchase deal.
5. Make Offers when You Look For Houses
It is important to tour homes in your price range and make a checklist of things that work best for you. You should maintain a list because it can be a little difficult to remember details about so many houses.
You can also create a pros and cons list for the properties you like and assess them when you like them. There are several details you can list down while buying a home.
- Checking the plumbing for connection problems
- Testing electrical systems including lights
- Checking the doors and windows
- Keeping an eye on the houses in the area
- Convenience levels around the area.
Remember that most people will invest in a new home only once in their lifetime, so you should be patient with it. You wouldn’t want to rush the purchase decision. However, in today’s real estate market, speed is definitely a factor when purchasing a home. Inventory is scarce in most areas, especially across the North Shore and Greater Boston so houses tend to sell very quickly. It is important to move fast when you know you have found the right property. Most property sellers receive several offers, so be sure you put your best offer on the table if you really want that home!
6. Perform Home Inspections
A good home inspection help determine the issues with a house. For example, factors like an unkempt curb, problems with furniture, structure or due renovation work all reduce the overall price of the home. Performing home inspections will help you decide the optimal price for the house by keeping the potential costs you need to bear with it. You can even request the seller to fix a few things before closing the deal.
7. Coordinate with a Mortgage Banker
A mortgage banker can show the list of a wide variety of loans you can select from for your home purchase. Moreover, these professionals can help you answer many questions that you will ponder over during a home purchase. It is because various buyers have different priorities during their home purchase.
For instance, some may want to ensure their payments stay as minimal as possible. Others may want to pay a maximum down payment to drop down their mortgage costs. Thus, you can present your particular case and determine what works best for the bankers.
8. Check Home Appraisals
Lenders usually provide a home appraiser which provides an approximate value of the house they buy. The appraiser is a third-party individual and is not connected with the house purchase deal directly. They will help determine if you are paying a fair price for the home or not.
9. Coordinate Paperwork
There is a lot of documentation and legal requirements buyers and sellers need to fulfill before making a deal. However, professionals can help make this paperwork task easier. They know the latest requirements and policies for it, which makes it an ideal way to keep the house purchase process streamlined.
They will also ensure that seller rightfully owns the house you plan to buy. This may seem like an extra step, but it helps avoid unnecessary legal complications later on.
10. Close the Sale
Closing is the final step of the house purchase of sale. It includes completing all legal procedures, signing the final papers, and placing everything in place. However, remember that it will take a few days for this process to complete before the paperwork returns to the lender. You can move into the new house as soon as the check reaches the seller.
A house purchase is one of the biggest decisions that an individual makes. Therefore, you must follow the right steps for it. We suggest you take your time in researching, get a mortgage preapproval and consult with a professional. These steps will make purchasing and moving into a new home easier for you.