I will take you through five of the most important steps to buying your first home so everything is more hassle-free. Buying your first home can be one of the most exciting and impactful times in your life. It is truly something to call your own. It prompts pride in ownership and creates roots for you within your community. You won’t have a landlord hanging over your head – you can update what you want and live how you want.
However, because buying a house can be such a long-term investment, it tends to bring stress to those in search. Lack of knowledge, desire for perfection, and inventory available can also contribute to that stress.
On the flip side, there are many ways for first-time buyers to enjoy a hassle-free home buying experience. But what is that process and what should you know? Here are the steps to buying your first home:
1. Find the Right Real Estate Agent
Finding the right real estate agent is the first, most important step as they will guide you through the intricacies of the process subsequently discussed. The right real estate agent will have a ton of great expertise in the markets you’re searching in.
They’ll be able to tell you about the quality of schools, crime rates, amenities, and more. They will also connect you to all the necessary professionals: mortgage brokers, real estate attorneys, inspection companies, contractors, and more.
And, in addition to what is available for the public to see online, they have access to posted listings not yet available for all to see and they will streamline the process to make sure you will see new listings and updates as soon as they become available.
Moreover, your agent will show you houses. Why limit yourself to open houses on Sundays or having to schedule individual appointments with selling agents? A good real estate agent will be able to budget the time to show you the homes that could be right for you. What’s the best part? They’re free! Buyers typically pay no fee to their agents because the commission is paid in full by the sellers.
2. Get Pre-Approved
Before you can seriously begin searching for your new home, you’ll need to understand what you can afford. This reduces time wasted looking at properties that would never get to close. If you’re not a cash buyer like most, to do this, you’ll need a pre-approval.
A pre-approval is when a loan officer looks at your finances including your credit history, income, debt, and assets and has determined what you’d be able to afford and at what rate the money will be lent.
Why is this important? It gives you the confidence to know what you can afford, expedites the closing process by allowing your loan officer to have most of the required documentation prior to any accepted offers, and showing pre-approval letters to sellers is not only sometimes a requirement, but shows that you’re a serious buyer and that you can afford what you’re offering.
3. Begin Looking at Homes
This is the fun part! At this point, your agent should have sent you what is available within your desired criteria and markets. You also should have a list of needs and wants sorted by importance. There may be a vast amount of homes for sale in your market, so you need to focus on only the ones that check the most boxes.
When you’ve determined homes that you think could be the one, it’s time to go see them in person! When you’re looking at homes, there are several things you need to pay attention to that you can’t always tell from online listings:
- Does the layout work for you?
- Are there immediate updates required?
- Is there enough storage?
- Does the room size work for you?
- Does the yard/exterior suffice to your needs?
- Is there any traffic or loud sounds?
And the list goes on. But in any case, seeing the home in person allows you to get a sense of whether you truly can live and be happy there.
4. Make an Offer for your First Home
Once you’ve identified the home of your dreams, it’s time to make it yours! Before writing up the specifics of your offer, it is important to have a keen sense of your market – which your real estate agent should have. In a market where demand exceeds supply, the seller has the upper hand. Offers must be competitive; whether you’re offering a quick close, full price or more, minimal contingencies, or appear to be a strong, reliable buyer, having something to differentiate yours from other offers is key. If you’re in a market where supply exceeds demand, you have more control over your offer. You might be successful with going modestly below list price and/or having more contingencies in your favor. But, whatever the market, it is important you’re getting the best possible deal while still making it to the closing table.
The offer itself must contain the blueprint for the final sale, as it will become a legally binding contract once accepted and signed. It must abide by state-specific laws. Some of what must be present and clearly stated are listed below:
- Legal address of the property being sold
- Sale price
- Financing terms
- Ownership terms
- Target closing date
- Earnest money deposit
- Walk-through provision
Offers can be complicated but they are very important to get right. Your agent should be able to clearly guide you through the process and your attorney will review to ensure everything is in line.
5. Inspection to Close
Congratulations! You and your agent worked together to submit an offer the seller couldn’t refuse! Now what?
Generally, there will be an inspection contingency in your offer. This means that you have a defined period to get the home professionally inspected for any defects that aren’t disclosed or clear to a typical buyer. If the inspection brings about any major unknown defects, you will likely have the option to be refunded your deposit and walk away from the deal or to negotiate in your favor to remediate the defect or reduce the price in an equivalent way.
As soon as you have an accepted offer, you should also notify your lender of the agreed purchase so that they can begin the full approval process. The amount of time it will typically take your lender to close should have been discussed and factored into the target closing date in your contract.
When you are satisfied with the results of the inspection and your close date is set, you’re almost there! You’ll want to do a walk-through immediately prior to the close to make sure nothing has changed without your knowledge since you were last at the home. If all is well, typically, the close will take place in your attorney’s office with your agent present and all should go smoothly. When the paperwork is signed, the house is yours!
Although the home buying process can seem stressful, long, confusing, and burdensome, having the right professionals around you will make it run much more smoothly. In the end, everything is worth it when you own the home of your dreams!
Need a real estate agent? Schedule a free phone consultation now!