Buying a house may be the most complicated financial process of your entire life. Luckily, we’ve broken it down into 10 straightforward steps:
1. Determine your readiness?
If you’re reading this, it’s likely that you’ve already tackled the first step of deciding whether purchasing is a good option for your finances and your family. Obviously, your current financial situation will be a major factor in this decision. Understanding the costs of home buying and homeownership are vital steps in determining whether you’re ready to “take the plunge.” Factors that determine your financial readiness include your current income, savings, fixed expenses, and debts.
2. Hire PEAK
With access to multiple listing services and insight into the market, a PEAK real estate agent can help you find the home you’re looking for as well as facilitate the negotiating and closing process. While you don’t have to use an agent to purchase a home, it can make the entire process much easier for first-time homebuyers.
3. Seek mortgage pre-approval
Getting pre-approved for a mortgage means that a loan officer has reviewed your finances and credit report and believes you qualify for a specific loan amount for one or more mortgage programs. The lender will then offer you a pre-approval letter, which will be a testament to your buying power when you are ready to make an offer on a home.
A quick search on our site will bring up thousands of homes for sale. Educating yourself on your local market and working with an experienced PEAK real estate agent can help you narrow your priorities and make an informed decision about which home to choose.
While no one can know for sure what will happen to housing values, if you choose to buy a home that meets your needs and priorities, you’ll be happy living in it for years to come.
The cost of financing your home purchase is usually greater than the price of the home itself (after interest, closing costs, and taxes are added). Get as much information as possible regarding your mortgage options and other costs.7. Make an offer
While much attention is paid to the asking price of a home, a proposal to buy includes both the price and terms. In some cases, terms can represent thousands of dollars in additional value—or additional costs—for buyers.8. Get insurance and a home inspection
No sensible car owner would drive without insurance, so it figures that no homeowner should be without insurance, either. Real estate insurance protects owners in the event of catastrophe. If something goes wrong, insurance can be the bargain of a lifetime. Once your offer is accepted, it’s customary to schedule a buyer’s home inspection. This is when you have the opportunity to get a professional opinion on the condition of the home and determine any red flags (like damage, pests, structural issues, etc.).
The closing process, which in different parts of the country is also known as “settlement” or “escrow,” is increasingly computerized and automated. In practice, closings bring together a variety of parties who are part of the real estate transaction.
10. What’s next?
You’ve done it. You’ve looked at properties, made an offer, obtained financing, and gone to closing. The home is yours. Is there any more to the home-buying process? Whether you’re a first-time buyer or a repeat buyer, you’ll want to take several more steps.