Read This Before Buying Your First Home
June 18, 2021
‘Is it really time for me to buy a home?’
This is a common question that every first-time homebuyer has to face before making the big decision. Owning a home is a long-term commitment that you can only make if you have control over your financial health. It can be one of the best investments you can make if you do your research beforehand or it can be one of the worst investments you can make if you rush the process.
In this post, you will find some time-tested advice on first-time home buying that is surely going to help you in the process. To make it easier to understand and implement the advice, we’ve broken down the entire process into five phases.
Let’s take a look at each phase one by one:
1) The Preparation Phase
Buying a home is one of the biggest decisions you’ll make in your entire life. It demands preparation. The preparation phase includes two important steps:
- Understanding the costs involved in the process
Buying a home is going to involve a lot more than just paying a down payment. Apart from the initial down payment, there are a number of other costs related to buying a home. These include closing costs, move-in expenses, and the monthly installments that will start once you buy the home. Not to forget, the monthly utility costs.
- Understanding your financial health
The best way to get a clear picture of your financial health is to check your credit score. You can get your credit report free of cost from credit bureaus such as TransUnion, Equifax, or Experian. Unless you have any missed payments or bad credits in the past, and you have been maintaining a good income, you can expect to have a healthy credit score. However, it’s always a good idea to be certain about it.
Based on these two factors, you can have a rough estimate of the price range that you can afford, and take the next steps accordingly.
2) The Mortgage Shopping Phase
The second phase in the process is to look for a mortgage. A good credit score will ensure that you are qualified for a mortgage, but only a preapproved offer will ascertain that you are actually getting one. You need to do two important things during the mortgage shopping phase:
- Get in touch with various lenders to see the mortgage options you have in hands, and then pick the one that fits your requirement
- Get a preapproved offer so that you can be certain about the price range you can afford
Once you have a preapproved offer in your hand, you can move to the most important phase – Home Shopping!
We recently published a post on common mortgage mistakes to avoid as a first-time homebuyer, which can help you in the process.
3) The Home Shopping Phase
The Home Shopping phase is where you look for your dream home based on the preparation that you have done and the mortgage that you are eligible for.
This phase can further be divided into three important steps:
- Hiring a real estate agent
Get in touch with an expert real estate agent and begin your home shopping process. You might think of flying solo during this phase, however, it is highly recommended to get in touch with an experienced real estate agent because they will save your time, effort, and money.
- Share your requirements
Once you are with a real estate agent, share what you have in mind when you think of your dream home, and the agent will find a property that matches your requirements. You must disclose your budget, and details of your financial health to get the best use of a real estate agent’s expertise.
- Home viewings
Based on your requirements, real estate agents will start coming with home options, and arrange for home viewings.
4) The Home Buying Phase
It will take more than one or two home viewings to find your dream home. However, if you are with an experienced real estate agent, you can be certain that they will find it. And, once you have found your dream, the buying phase begins.
Here are a few steps involved in this process:
- Making an offer
If you have found a home that suits your requirements, and fits your budget, then your real estate agent will make a formal offer to the home buyer.
It is also worth mentioning here that a seasoned real–estate agent will never hesitate to put his negotiation skills to good use to ensure that you get the best price.
- Getting home inspection
As soon as the home accepts the offer, you need to book a home inspection. A home inspection is critical because it will give you a detailed analysis of the health of the property. Unless something alarming pops up in the inspection, you are good to go and make the purchase.
5) The Closing Phase
If everything is as per your expectations, then the last and final phase in the process is to close the deal. This phase includes all the paperwork required to make the home buying official. It will also require you to pay the closing fee, loan-origination fee, home insurance (recommended), and property taxes depending upon your location. Once you have paid the associated fees, the home seller will hand over the keys, and you can now call yourself the proud owner of your dream home!
Buying your first home can be a smooth journey when you have the knowledge and right support by your side. A genuine real estate agent can be not only your guide in searching for your dream home, they can be a confidante who can make the entire process hassle-free for you.
If you are looking for someone to assist you in your home-buying process, then you can get in touch with a Negotiator Recognized Partner (NRP). An NRP can take care of all your home buying troubles, and will relentlessly negotiate on your behalf to get you the best deal.