Buying real estate is an exciting process, but there are several steps that are involved for a successful transaction. I have created a list below for you to follow so that you can be best prepared.
Step 1: Begin Your Research
Start doing your preliminary research of areas that you are interested in. Make note of the types of properties and price points that are currently in the market. This will give you a sense of what neighborhoods may be best for you to consider.
Step 2: Determine Your Comfortable Budget
Consider your monthly budget, debt and amount of money you have for a down payment. Although a lender will have to qualify you for a loan, you should make this determination based on your own financial situation and what you feel most comfortable with.
Step 3: Get Prequalified
Before you start looking for a home, you will need to know how much you can actually spend. The best way to do that is to get prequalified for a mortgage. To get prequalified, you will need to connect with a mortgage broker and provide some personal information. Your lender will then tell you what you will be approved for which will dictate what price range of homes you can begin searching for. It is important to give them accurate data for the pre-approval as you will have to follow up with supporting documents, credit reports, etc. to verify your financial status.
Step 4: Search for Homes and Make an Offer
Begin viewing homes in your price range and take notes as you may see many houses. When you visit homes in different locations, be sure to consider things like convenience to local services, your place of employment and other things that speak to your lifestyle. I can be a valuable resource of information so always ask questions during the process.
Once you find the home of interest, submit your offer with your preapproval letter.
Step 5: Home Inspection
A home inspection is very important as it can check for signs of structural damage or items that may need repair. Many offers are actually made contingent of a satisfactory home inspection. This provides protection to you in case any significant items are revealed upon inspection. Any negotiated items that shall be remedied by the seller can be verified before the closing at the walk-through.
Step 6: Have the Home Appraised
Your lender will arrange for the home to be appraised. The appraiser will be from a 3rd party company that is not directly connected as to avoid a conflict of interest. The appraisal will alert all parties that the price you are paying is a fair price for the property.
Step 7: Complete Paperwork
Your lender will arrange for a title company to handle all of the paperwork and make sure that the seller is the rightful owner of the house you are buying. In addition, you will need to complete your loan package by providing your lender with supporting documents that prove your employment and financial status.
Step 8: Close the Sale
After your final walk-through of the property, you will proceed to the closing. Here, you will sign all necessary documents to complete the purchase including your loan paperwork. Once have completed this and the check is delivered to the seller, you are ready to move into your new home.