Are you or someone you know, wondering what are the steps to buying a home?
A lot of the first time home buyers we work with typically don't have a clue where to begin. So in order to help the disconnect between what they don't know, and what they'll need to know, we have created this 10 step guide to buying a house.
This is valuable information for anyone looking to buy a house - Please feel free to share!
Without further ado, here are 10 Steps to buying the home of your dreams!
Learn The Process
When you decide to buy a house, there is a chance you are going to want to dive right in and start looking at homes for sale in person. This is common among buyers, and typically means you're allowing your emotions to drive your decision making. This is a common mistake buyers make. Take a step back and understand that preparation is how you win in real estate and that begins with an education.
Knowing what to expect after you make an offer is going to help your confidence in making an offer. If you don't know what happens after you make an offer, there's a good chance you're not ready to make one.
Knowledge is power, and obtaining as much information as possible when making a decision will give you the highest percentage chance for success. Educating yourself throughout the entire process, and beyond will go along way. You can read some great real estate resources online for buyers on our website, or on many of the Top Real Estate Blogs.
Talk to Lenders
You want to have a great understanding of your financial limitations BEFORE you start searching homes for sale online. If you don't know what your limitations are, you may end up wasting your own time looking at homes that are outside of your price range. Or worse, you may end up buying at the very maximum of what you can afford and not being able to enjoy the lifestyle you were use to before purchasing the home. This is a common mistake among first time home buyers.
A fifteen minute conversation with a mortgage lender will go along way in your home search. Especially if you address this conversation upfront (that is why it's step #2).
We recommend buyers be pre-approved for a number of reasons. Many thing can happen that the lender cannot see when you're pre-qualified, this can cause problems for you when it comes time to receive funding. Most of us can't buy a home with cash, nor would we want to lose that type of leverage with interest rates so low, unless it was the only way to buy the house. Knowing the difference between pre-approved and pre-qualified is important.
Find a Real Estate Agent
Searching for a Real Estate Agent is one of the first steps to buying a house. They will provide you with the local market reports and keep you up to date on new listings that match your criteria. Aside from some of a Realtor's main responsibilities they will also be an educator, explaining to you the process of buying a home.
When choosing a Real Estate Agent the most important thing to look for is trust. You have to be able to trust that your Realtor has your goals in mind, and not their own. There are clear differences between Realtors who sell homes, and Realtors who help find great lifestyle's. Knowing what motivates your Real Estate Agent should be a clear indicator of their intent and actions.
The type of Realtor® you don't want to work with are the one's who are afraid to tell you something you don't want to hear. Transparency is, in my opinion, the most redeeming quality of a sales person. I want to work with the type of sales person who isn't afraid to tell me the bad news.
Search Homes for Sale Online
After you understand your finances, you should begin searching homes for sale online and start building a frame of reference. You'll want to make sure your search is geo-specific to the certain locations you're interested in. If you pick 5 different towns that you could potentially move to, than there's a good chance you haven't done enough homework.
Before you jump into homes, pick a city or neighborhoods to focus on
HOMES FOR SALE BY CITY
Alongside looking at homes online is understanding the neighborhoods in person.
Drive the neighborhood, understand what it is you like and don't like about each subdivision before you start asking to see properties. Location is one of the most important aspects of buying a house, and is one thing you should never settle on. If you're going to buy a house do not allow yourself to be distracted by a poor paint job or landscaping, these items can be fixed. Location is one thing buyers should never sacrifice!
Once you've narrowed your search down to a few select areas you should start setting up appointments to see homes in person with your Real Estate Agent
Preview Homes in Person
Previewing homes in person is a fun step in the process of buying real estate. At this point you should have a clear understanding of what you can afford, the Real Estate Agent you want to work with, as well as specific locations chosen.
If you don't have one of these three things you aren't ready to preview homes in person, even though you may think you are.
Write an Offer
What has always surprised me is how quick some people are to make offers, and how slow others are. There is no right or wrong way to write an offer on a house, but once you find one you love don't hesitate.
There are plenty of ways to back out of the deal with little to no harm done to the buyers, if any at all. You can offer zero to little money down to hold the house during your due diligence period. You can back out for any reason during this timeframe and you will lose the money you put down for due diligence.
Schedule your dates and times. This includes closing, inspection, due diligence deadline, and many other dates that will be key stepping stones in the home buying process. There is a good chance your bank or lending institution will determine a lot of the dates involved as they will be the one's having the home appraised and need a certain timeframe to close.
One date you are going to want to pay special attention to is the due diligence deadline. You'll want to negotiate all repairs before the end of this period.
Then it's time to schedule a final walk through for the property you're buying.
Final Walk Through
It's important to do a final walk through on the home to ensure that there is nothing that went unresolved or it could lead to potential problems after closing.
There may have been items the seller agreed to fix that remain unresolved. You'll want to be sure these are fixed BEFORE you hand them a check or you will lose a lot of the leverage you had.
Most sellers will welcome any last minute fixes to help close the deal, so definitely don't wait until after closing.
Closing will require time for the buyers, so be prepared to spend a few hours at closing (this is conservative) in case anything is to go wrong with the lending institution or any problems arise.
Most closings will not take that long for buyers, though we have seen some take several hours.
Once you have closed the deal and signed all the paperwork necessary, your attorney will congratulate you and hand you the keys!
Receive the Keys
Receive the keys and move in to your new home! This step is sure to put a smile on your face.
Chances are the home buying process has sent you on a wild ride of emotions, and it was all for this moment! Now you can relax a little bit, allow the attorney to record the deed and move into your new house!
Final Thoughts on Steps to Buying a House
Often times people will start looking at homes for sale online before they are ready to buy, sometimes 2+ years in advance. This is natural. There is a curiosity among renters about what they may be able to afford vs. continually paying a landlord each month. Homeownership has been one of the best investments a person can make.
Millennials have been deemed generation 'rent' and we have seen quite the contrary at Raleigh Realty. In fact, a lot of people we work with are buying real estate at a young age. One of the hot spots for the buyers we work with seems to be Downtown Raleigh as it is attracting all types of people.
If you start the home buying process with a solid education, an understanding of your finances, and a top local Realtor®, you are in position to have a lot of success!
Hi there! I'm Ryan Fitzgerald, a REALTOR in Raleigh-Durham, NC and the owner of Raleigh Realty. Chances are you and I share a similar passion, Real Estate! I also have a passion for technology, sports, and people. Would love to hear from you. Drop me a note in the comments section below and feel free to share this article socially!