The American Dream: the white picket fence, the 2.5 kids, and a single family home. If this is your first time buying a home, this can be a very exciting, scary, and confusing process. We wanted to provide a few tips from our experiences that will simply the process for you, and make it easy.
Step 1: Find an Agent
Note that you don’t necessarily need to get a buyer’s agent to get a house, but getting one will save you a lot of time and headaches. Agents have a database called the MLS that they can search for your perfect home, and they also frequently know of homes coming on the market before it is public knowledge. They will also help you get a better deal on the home, potentially saving you thousands of dollars.
Step 2: Search for Your Home
Whether you have engaged an agent or not, now is time to start searching for your new home. We recommend scheduling 5-7 home viewings per day, at most, because any more than that may be overwhelming. These days many buyers spend a lot of time researching homes online before even stepping foot in one. Try picking your ideal neighborhood(s) first, and then start looking at homes available in that neighborhood.
Step 3: Get a Loan
Once you’ve found your ideal place to live, it’s time to secure your funding. One tip is to get pre-approved for your loan, meaning that the lender has looked at all your financial information and has let you know how much you can afford and how much they will lend to you. This also saves you time in the home buying process, because now you won’t waste time looking at homes you can’t afford.
It’s also smart to start saving for your home early. Many home buyers put 20% down on their loan, but many loan programs let you go as low at 3%. The more money you have saved to put towards a down payment the more you will save in interest payments, so keep that in mind as you are house-shopping.
Step 4: Negotiate The Offer
Now that you have your money, it’s time to negotiate your offer. A common mistake buyers make is comparing the property they want to other properties currently available on the market. This is a mistake because it’s not necessarily an apples to apples comparison, you may be comparing homes of different sizes, with different features, in different locations. Instead, a buyer’s agent can help you by comparing the listing price of the home to comparable homes that have sold in the neighborhood. Also remember, the seller can list any selling price that they want, that doesn’t necessarily mean that the home is worth that much. In a seller’s market, you may even have to pay more than the listing price.
Step 5: Home Inspection
It’s important to conduct a home inspection before moving in so that there are no unexpected bills once you move in. If you will be doing a major clean out before moving in, you should consider renting a dumpster, as it will make the entire process of throwing things out much easier.
Armed with these tips, you’ll be in a much better place to buy a home. Best of luck on your search.