Besides being one of the most important decisions of our lives, buying a home is also a serious financial investment. For most of us, it is the most expensive purchase we’ll ever make in our lifetime.
From browsing houses online to touring prospective neighborhoods, there is a huge number of factors to consider when you decide to make the final step. With that in mind, we have put together our own Ultimate Checklist for Buying a Home!
Find a Real Estate Agent
First, a good real estate agent can answer all of your questions and point you in the right direction.
Even if you are not ready to buy at the moment, an agent’s advice will be invaluable. You cannot begin the process of determining a sales price until you get prequalified and look at properties so you know how much home you can buy. This is where an agent is useful.
The right real estate agent for you and your family won’t hide the potential risks of buying or selling a property. Find someone trustworthy who can understand you, your needs, and is passionate about their work.
You can search the web for some good recommendations, or ask your neighbors about their experience. According to research, 74% of users find their agents on social media, so you should check this avenue as well.
Get familiar with the process of working with a real estate agent and avoid mistakes like hiring someone close to the family or the first agent you meet. In the end, this is an important decision and you need an experienced professional who will listen to you, conduct themselves ethically, and knows the market well.
Talk to a Mortgage Lender
Lenders come in all types. While some of them make only certain types of loans, others can match a loan of specific needs. Don’t automatically assume that the best place to get a loan is the place where you maintain your checking account.
Consider aspects of the mortgage like what budget works best, how much a down payment should be, how long it takes for a loan to close, specifics about interests rates, etc.
Again, we recommend asking your real estate agent for a referral. Agents know which lenders perform and which do not.
Think About the Financial Aspects
Next step in buying a home is to save up the deposit. It might take 3-5 years to save it so starting as early as possible will put you in an advantageous position. Once you have determined your down payment amount, create a budget and work hard to put the funds aside.
Then you should consider what your monthly payments are today and what they will be after you purchase your new home. Don’t forget about all potential renovations that might also burden the budget.
Besides that, be aware of key factors such as your credit score, debt, and closing costs when planning the purchase. Also, make sure you get a preapproval letter once you apply for a loan. Meanwhile, avoid making any large purchases on credit or diluting your cash reserves. That might cause your loan to be rejected.
Find the Perfect Home
After you are prequalified to buy a home, the deposit is ready, and you have hired the right real estate agent to assist you, it is time to choose the perfect home for your needs!
Start by selecting a neighborhood, then find a home that meets your price range and fulfills your other requirements.
Also, consider value-forming factors like school districts, proximity to transit, security, availability of free green areas, etc. Last but not least, think about things like how many levels you want in your home or type of floorplan for the property.
You can go for a do-it-yourself approach to finding the best places to buy homes online, but we recommend consulting with your agent, who will send you listings every day.
Make a Purchase Offer and Close on Your Home
Don’t be that buyer who thinks he knows best or you may become that buyer who learns the lessons of rejection. Again, listen to your agent’s advice, and when you find the perfect home, immediately make the offer.
Don’t overthink, and keep in mind that a lot of potential buyers might be looking at your desired property at the same time.
Making an offer on a property is not simply telling the seller how much you’re willing to pay.
It is important to provide evidence that you’re able to pay the amount, establish the expected closing date, show how additional costs will be covered, and your expectations of the seller leading up to closing.
When you are competing with other potential buyers, you might get caught into a bidding war. Stay calm and try to stand out. You could write a personal letter to the seller or include quirky numbers in your offer that will really make an impression.
Once your offer is accepted, you will begin the process of closing on your new home. Consult with your agent about types of inspections you might want to order and create a checklist to make sure you won’t miss anything.
Set aside funds for your home’s closing payments. This is additional money to the balance of your down payment.