Buying a home is a huge process. Trying to buy a home without help can lead to a struggle for potential buyers. There’s a lot that home buyers need to know when purchasing a home. From loans to home location, make sure you find the right realtor to help you through your home buying needs.
Watch this video for an outline of 8 easy steps to buying a house:
Whether you’re a first time home buyer or a buyer in a new market, a realtor will help with everything you need. Learn from the lessons of others and make your home buying process easier. Here are a list of things that homebuyers need to know:
1. Understand Your Buying Power
The most important thing for new buyers to know is to not look at homes before you know what you are approved for. If you look at home before you know what you can spend, you may have your heart set on homes that aren’t within your budget. So the first thing that home buyers need to know is their buying power.
A home buyer’s buying power is the amount that they are approved for. Being prequalified for a home is simply a conversation between a home buyer and their lender, while being pre approved means that all of the necessary documents have been submitted to their lender and the numbers are in writing.
When a home buyer is pre approved for a loan they will also understand the conditions of their loan, which will be important throughout the home buying process. Once you are pre approved, you will know what your home buying budget is and how much you can spend.
If you are a veteran, but aren’t sure if you can use your VA Benefits to buy a house, please read this article for more information: https://diannahowellrealtor.com/buying/va-benefits/
Once you know your buying power, it’s important to understand all of the other costs that buying a home comes with. As a buyer, you will need to know all of the costs that you will incur as the buyer. There are loan fees, home appraisals, closing fees, down payments, and inspections to name a few.
You may also need a property survey if you want to know your property lines or are thinking about adding a fence. Learn more about property surveys in this video:
There are many types of inspections that may need to be done on your future home, and as the buyer, you will be paying for all of them. These inspections include home inspections, termite and wood infestation inspections, septic inspections, roof inspections, HVAC inspections and even chimney inspections. Click here to learn more about what to look for in a home inspection before you buying a home.
2. Understand All the Costs
There could be a few more inspections depending on the home you are buying. Of course, once you find a realtor, your realtor can help advise which inspections your future home will need.
Another important factor is to calculate what your down payment on your new home should be. How much you put on your down payment can affect your monthly mortgage. Be sure to calculate how much you want to spend per month on your mortgage to find a down payment amount that you can afford.
3. Decide What Kind of Homes You’re Looking For
Now that you’re pre approved, you know your budget while you are housing hunting! This is the time to decide on the top things that are important to you in a home. Realize though that not every single home out there will fit your list, so it’s important to be flexible when looking at homes.
Know that location is key over anything else. You need to decide what area you want to live in and this will narrow down your choices.
Some examples could be if you’re looking for specific school zones or whether or not HOA fees are a factor in the neighborhoods you’re looking at. If you are interested in buying a condominium, read this post on what to know before you buy a condo to weigh the pros and cons of condo living.
Once you decide on the location of your future home and what the most important features in a home are to you, your realtor will be able to help you in the search for homes within your budget. So the next step is finding a realtor to help you through the home buying process.
4. Understand the Importance of a Realtor
Whether or not you’ve bought a home before, realtors are your best friend during the homebuying process. They can help you not only find a home, but help your navigate the homebuying process. Realtors can help you with any concerns or questions you have during the entire process.
When searching for homes online, your realtor should send you homes on the market within your price range and preferred location. Be aware that sometimes homes online that seem perfect may be under contract or sold already. Don’t fall in love with a home until you know it’s available.
Realtors can not only help you find your new home, but will write an offer for the home and negotiate on your behalf. Once your offer is accepted and all parties have signed you now have an executed contract. Your realtor will go to work setting up inspections and guiding you through any future negotiations. Your realtor will order title and work closely with the closing attorney to get you to your closing day.
5. Understand the Financial Risks
You still need to keep your finances under a close eye once you start the homebuying process. Until the house is officially yours, stay away from these common mistakes! Do not open any new accounts or charge on existing credit accounts. Do not change jobs or make any large purchases, like a new car, before closing! You also want to stay away from taking out other loans or opening up any other lines of credit, including a small one for a retail store. Any changes in your credit will affect your mortgage loan. Don’t let a small mistake stand in the way of purchasing your new home.
6. Understand the Market
Knowing the market you’re in is key when buying a home. This is true for both first time home buyers and experienced home buyers. You need to understand the market. Will you be searching for homes in a buyers market where you have the advantage, or will your be looking for homes in a sellers market?
It’s important to know the type of market so you are prepared for which party has more power when it comes to offers and negotiations. A sellers market may also speed up the process of other home buyers putting in an offer. Listen to your realtor for advice, they are there to help you.
7. Understand the Costs of Owning a Home
New homeowners sometimes underestimate the cost of owning a home. This goes back to step one when you are pre approved. Figuring out your monthly mortgage ahead of time will save you a financial headache once you own your home.
You don’t need to empty your savings when buying a home. Make sure you still have an emergency fund after you pay for your down payment and closing costs. You’ll still have all of your bills coming in, other than rent, so check your finances.
Many homeowners often find that there are unexpected repairs to be done after they move in. Repairs will cost you, so make sure you have funds as a backup. Even when fixer upper homes are purchased to renovate and remodel, be sure you have a safety net as unexpected costs or time delays may change your original budget. Either way, you want to be prepared.
8. Understand the Loans Available for You
If you are a first time home buyer, look for first time home buyer programs and loans in your area that will help. Talk to your realtor and get advice on where you can search for loans. Don’t just stop at the first quote you receive, get quotes from multiple companies to figure out which one will be best for you.
Know that you don’t have to spend the entire amount you’re approved for. You can simply buy a home priced less than you are approved for if you can save money every month on a smaller mortgage and interest rate.
Save money for a down payment and closing costs. You may be able to negotiate with the seller to pay some if not all closing costs, but you need to be prepare just in case.
9. Understand How Much Time the Homebuying Process Takes
Finding the right home for you isn’t the only part that takes time. Once your offer has been accepted on your new home, it will be between 30 to 45 days before your move in day. There will be home inspections to be done and then the closing process will begin (we will cover this in the next post).
Other factors, like having a land survey done for any future fences, may take time as well. You aren’t just working on your schedule or the homeowner’s anymore, but other companies. Be patient through the process and keep the end goal in mind, that you will soon be living in your new home!
Who knew that the home buying process could be so much work? The steps above are just the first steps towards buying a home! There is plenty more to learn once your offer on a home has been accepted. Learn about the closing process in our next post. If you’re ready to start your home buying process, don’t forget the first step! Get pre approved and find a realtor before you start your home search.
Need More Information?
If you are located in the Greater Birmingham area, feel free to reach out to us with any questions that you might have. We love making the process easier for future home buyers. Contact Dianna Howell at: dianna.howell@kw.com
Learn about the benefits of being a homeowner in this post: https://diannahowellrealtor.com/buying/benefits-of-buying-a-house/
The home buying process doesn’t have to be a stressful one. Use the steps outlined in this post to make your home buying journey easy. Good luck!
Want to know what happens once you go under contract? Learn what to know during the closing on a home here so you know what to expect during the closing process, or in escrow! And see this post to read what happens after a house closing for a new homeowners checklist.
If you’re planning to buy a new home at the same time as you’re selling your current home, read this post! We will go over the advantages and disadvantages for how to buy and sell a home at the same time.
Lastly, technology has drastically changed the real estate industry, including how people buy and sell their homes. Click here to learn how technology helps buys a house so that you as a homebuyer have more information that will help you during the process.
If you’re interested to know what to expect during a showing, read this post on what to know about a house showing. For information on the benefits of having an open house, click here.
We also have a post that covers the pros and cons of buying new construction. Click here for information on what to know when buying new construction.
And we have a list of the top 8 things that most new home buyers don’t think about! So what do first time home buyers not know? We have a list of 8 things here!
