A Step By Step Guide To Buying Your First Home
May 6, 2021
A lot of work goes into buying your first home. If you think that you can just go out there, search for your dream home and find one, then you might want to think again. Buying your first home will require meticulous research, the support of an expert real estate agent, and a lot of preparation.
In this post, we will provide you with a step-by-step guide to buying your first home. So, let us begin.
Step 1 – Check Your Financial Health
Before you begin searching online listings and getting in touch with real estate brokers, you need to do an audit of your financial health. This will help you understand whether you are ready to take the big step of buying a home or not.
Checking your financial health would typically involve three questions:
∙ Do you have enough savings to bear the upfront costs involved in buying a home?
∙ How much money are you spending including utilities, food, insurance, student loan, and so on?
∙ Do you have a good credit score in order to make you eligible for a mortgage to buy your first home?
Your financial health will paint a clear picture as to whether you can buy a home or not. And, if you can buy then this will tell you what budget you can afford.
Step 2 – Go Loan Shopping
Now that you know you have good financial health, it is time to go loan shopping and get a pre-approved loan. You can start visiting lenders to know about what they are offering. It is smart to get in touch with a mortgage broker, who has access to multiple loan providers. A mortgage broker will help you find the best rates for your mortgage.
In order to be pre-approved for a loan, you will be required to provide certain basic information about your financial standings. This will include your income, any savings that you have, and other related information. A mortgage broker will be able to guide you the best in this regard.
It is recommended that you also gain knowledge about the various types of mortgages before you choose a loan. This will include:
Understanding The Payment Options – should you go for a smaller term with higher monthly payments or longer terms with lower payments? Your financial planning is going to play a big role here.
Fixed vs Adjustable Mortgage Rates – as it is evident from the name, fixed mortgages don’t change over time, whereas adjustable mortgage plans are at risk of seeing an increase according to market conditions. Fixed mortgages are stable, and hence allow you to plan better. However, there’s a slight risk involved if mortgage rates fall extensively due to changes in the market.
Step 3 – Find An Expert Real Estate Agent
Now, every step in the home buying process is important but finding a good real estate agent can be considered the most important one. This is because of the following reasons:
∙ An experienced real estate agent will make your home search easy by understanding your requirements, and only showing you properties that meet them.
∙ With their contacts and network, they will be able to provide access to information about homes that you cannot easily get.
∙ Plus, their familiarity with the area, and their negotiating skills can play a big role in helping you get the best deal for your first home.
Check out our blog on things to consider when choosing a real estate agent.
Step 4 – Find A Home
Now that you have an expert real estate agent by your side, it is time to go home shopping. Since you already have a set budget in mind, you can look for options accordingly. Whether you want a townhouse, a condo, an apartment, or a duplex, you can share this with your real estate agent and they will be able to arrange showings accordingly.
It is recommended that you go through a few showings of different properties before you settle down on one choice. Finding the right home will take time, so don’t rush. Be patient so that you don’t end up making a mistake.
Check out this post to learn about the most common mistakes people make when buying a home.
Step 5 – Make An Offer
Once you have found the home of your dreams, it’s time to make an offer. Your real estate agent is going to help you with this. Whether it is deciding how much money you should offer or finalizing the terms of the agreement, it will be the real estate agent’s job to guide you through this process.
Once the seller and you have reached a final agreement, and they accept your offer, the deal will move into escrow i.e. the time period during which the home is taken off the market. It is during this period that a home inspection must be scheduled so that you can be sure that you are getting the right value for the home promised in the deal.
If you find something wrong during the inspection, you can take your offer back or negotiate with the seller to get things fixed at their expense.
Step 6 – Closing
If everything in step 5 has been sorted out, and you and the seller have reached a mutual agreement, you can go ahead and close the deal. Closing involves all the paperwork, paying for all the costs associated with the closing, like loan-origination fee, title insurance, taxes, and more. It is always advisable to get an idea of these closing costs from your real estate agent up front before moving to this stage of the transaction so that you can be fully prepared for the closing.
Once you have signed all the paperwork and paid the closing fees, you can simply get the keys from the seller. Congratulations you have bought your first home!!!
As you can see, a number of steps are involved in buying your first home. Having someone to guide you through the process, therefore, becomes key to finding the perfect home that you always wanted to buy. This is exactly what an experienced real estate agent can do for you.
If you are looking for experienced professional home buying help, then you need to get in touch with a Negotiator Recognized Partner (NRP). These professionals will be your perfect partner to not only negotiate on your behalf but also ensure that you get the best home that you deserve.
So, go for it!