Deciding to Buy
The decision to purchase your first home is one of the biggest and best decisions you could ever make. After all, a home is the largest investment most people will ever make. So, how do you know if it’s the right time for you to buy your first home?
- There is never a wrong time to buy the right home. The key is finding the right home and taking the time to carefully evaluate your finances.
- A home purchase is an important investment in the path to long-term wealth. Purchasing your own home is a great investment that provides specific financial advantages: equity buildup, potential value appreciation and tax benefits. It’s also an automatic savings plan that renting does not provide.
The steps to buying a house might seem complicated at first – particularly if you’re a fist-time home buyer.
In this step-by-step guide, you’ll learn what it takes to buy your first home, from beginning to end. Whether it’s your first time in the real estate market or you’re an experienced homeowner who wants to brush up on your skills, this list has you covered.
8 steps to buy your dream home
- step 1GETTING PRE-APPROVALGetting pre-approved is one of the most critical steps a buyer should take before beginning their search, if you are not planning to purchase home by cash. Pre-approval does more than speed up the process when you find the home of your dreams. It means a lender has verified your income, employment, and credit, which will also give you an accurate estimate of how much you can spend on your new home. This helps you narrow your search and saves time. An experienced realtor will have access to trusted lenders who can guide you through the process and get you pre-approved, so you can start searching for your dream home!
- step 2FIND A REAL ESTATE AGENTChoosing the right real estate agent for your needs can make all the difference in your home buying experience. An experienced agent will do more than just help you find your next place of residence. He or she will accelerate the process for you, help you avoid delays and unforeseen pitfalls, and get you the best possible home for your needs and budget.
Every agent has their own approach and style when it comes to dealing with buyers, sellers and the network of other professionals needed to close on a new home. And every buyer should choose an agent with whom they feel comfortable and confident.
- step 3GO SHOP FOR A HOMEThis is the fun part! Make a list of what you MUST have and prefer to have. As a home buyer, you can peruse thousands of real estate listings on sites or the searches your agent set up for you, then ask your agent to set up appointments to see your favorites in person.
- step 4MAKE AN OFFERFound your dream home? Then it’s time to make an offer to the seller. Ask your realtor to write an offer. An effective agent will advise you throughout the negotiation, leaving no stone unturned.
- step 5GET A HOME INSPECTION/TERMITE INSPECTIONA home inspection is where you hire a home inspector to check out the house from top to bottom to determine if there are any problems with it that might make you think twice about moving forward. Think: termites, faulty foundation, mold, asbestos, etc. Sure, a lot can go wrong, but rest assured that most problems are fixable. The home inspector is a key member of this team, and the person best qualified to give you the most accurate diagnosis of the heath and value of the property. As with any other professional, there are good and bad inspectors. Your realtor should have the best in the business on speed dial, because they know how much of a difference they can make in the home-buying process.
- step 6GET A HOME APPRAISALEven if you got pre-approved for your home loan, your lender will want to conduct a home appraisal. This is where the lender checks out the house to make sure it’s a good investment. It’s similar to a home inspection, but for your lender.
- step 7CLOSINGClosing, which in different parts of the country is also known as settlement or escrow, brings together a variety of parties who are part of the real estate transaction, including the buyer, seller, mortgage representative, and others.
Closing is the day you officially get the keys to your new home—and pay all the various parties involved. That will include your down payment for your loan, plus closing costs, the extra fees you pay to process your loan.
Closing costs can be sizable, averaging anywhere from 2% to 7% of the home price.
- step 8CELEBRATE!Congratulations!
Whether buying your first home or your fifth, let’s talk about your needs and what you’re looking for to make sure the process goes smoothly!