The purchase of your first home is an exciting, but often intimidating process. It’s important to know what to expect from start to finish.
Before you begin shopping, make a list of what’s most important to you in a house. This will help you stay focused on the homes that meet your needs. Knowing things like how much does a home warranty cost or how much am I paying in home association fees will help with your purchases.
1. Know Your Budget
Your budget is a critical step in the home-buying process. Make sure you know how much you can afford to spend and stick to it. You can use a real estate website to help you narrow your search and find homes that fit your price range.
You can also make an objective list of your housing needs and wants. This could include things like the number of bedrooms and bathrooms you need, or the location of a home that is close to public transportation if you commute to work.
Before you buy, it’s important to have enough money saved to cover your down payment and closing costs. You can also save for emergency expenses or other repairs that might occur once you become a homeowner.
2. Know Your Lender
First-time home buyers enter the real estate market with a lot of new information. That’s why they need a lending partner who will make sure they understand the process, rules, and regulations that are specific to their location.
Mortgage loan rates are incredibly competitive, and it pays to shop around for the best deal. Many lenders will even waive the application fee for borrowers who are pre-qualified and ready to purchase.
Real estate professionals will often tell buyers that it’s better to be pre-qualified before they begin the search for their dream home. That’s because a buyer who has already done this can avoid the stress of losing a home to another offer due to a financing problem or an inspection that uncovers major repairs.
3. Know Your Rights
Leaping into homeownership for the first time can be intimidating and confusing. There are so many steps, tasks, and requirements, it’s easy to make costly mistakes if you don’t prepare yourself in advance. Start prepping your finances and comparing offers from lenders early to find the best deal, and don’t forget to take advantage of first-time homebuyer programs to get tax breaks and other benefits. And always have an emergency savings account that will cover at least three to six months of living expenses, which lenders will require of you.
Another thing to know is that you should have your property inspected by an experienced professional before purchasing it, which will help you avoid costly repairs later on. But some homeowners skip this step to save money, which could
backfire.
4. Know Your Inspection Options
Unless you are purchasing a home that is advertised as move-in ready, it’s best to have a professional perform a thorough inspection of the property. This is an important opportunity to learn about the property’s condition and get a better idea of when you’ll need to budget for repairs or replacements.
If the inspection reveals significant issues, you can typically walk away from the purchase and get your earnest money deposit back. These contingencies are generally written into the contract of sale, officially known as the purchase and sales agreement.
Interview potential inspectors to determine their experience and demeanor. Ask about their certifications and specializations, such as radon or sewer inspections. Also, make sure the inspector allows you to attend the home inspection. Two sets of eyes are always better than one!
5. Know Your Closing Date
Your closing date is the day that you become the legal owner of your new home. This is usually a few weeks after your purchase offer has been accepted. However, the timeframe can vary depending on the method of financing and whether or not any contingencies are included in your contract.
Your real estate agent can help you set a realistic timeline from the start of your process. They’ll also make sure you know your closing date well in advance so that you can plan accordingly.
This will give you enough time to do a walk-through of the property before closing and ensure that the previous owner has fully vacated (unless they are allowing a rent-back arrangement). You can also use this time to run a title search on the property, or buy title insurance.