Unlike any other purchase, buying a house is a complex process that requires long preparation and informed decision-making. Indeed, people cannot just ask the price, pay the seller immediately, and get away with a house as it happens on a food market for instance.
Many people who consider becoming property owners for the first time, tend to face too many challenges at early stages and believe that this is an impossible task. But it is just a myth, which we will dispel together.
Where to start?
Formulate all your needs and expectations for the future property
It is for you to decide whether it is going to be a family home, a good investment, a place close to work, or all of the above. Thereafter make a list of features which are mandatory and preferable.
Conduct self-driven research
If you choose a family home, you need to learn the infrastructure to see whether schools and hospitals, shopping and entertainment centers are located nearby.
In case you see the new house as an investment option, you need to conduct self-driven research of different real estate listings published in newspapers and on relevant websites. This is also helpful if you are just looking for a home for yourself.
Track the prices of the properties you are considering and the time they remain available for sale. This information will provide significant insight into current market trends and will allow you to preliminarily determine which property is a good investment opportunity.
Shop for a mortgage
When you finally realize which type of housing you want to acquire, it is high time to shop for a mortgage as you will know the size of your budget. In order to maximize benefits, it is important to analyze all mortgage options offered by different financial institutions. Be ready to provide copies of your bank statements, pay stubs, your W-2 forms and tax returns for the past two years to the bank officials. Since getting pre-approved means a serious desire and readiness to close the deal, sellers might make some concessions in your favor.
Find a reliable real estate agent
You should not underestimate the importance of this stage as real estate agents have a critical mass of expertise in the buying process, know the market, and have good negotiating skills. In addition, agents greatly facilitate paperwork and accelerate the closure of the deal. It is important to note that buyers do not pay a single penny for the agents’ services since the costs are passed on to sellers.
But is it really that easy to find the right agent? That’s a great question. You can start by asking friends and family for references, after which you can browse online reviews. In order to verify the right choice, you should hold a face-to-face meeting.
Start looking for the desired property
After you have already understood what you want and know your financial limitations, you can start looking for the property according to the set specifications on our website.
Start by making a short list of the best options so that you can submit it to your agent, who will take you to open houses. It must be understood that even if you feel love at first sight while visiting the first house, you still have to explore other options because they might be better.
Make an offer and negotiate
Of course, there are many cases when sellers initially agree with the offered price, which considerably facilitates the process, but in the competitive market sellers usually choose among several buyers on a variety of criteria: someone wants a greater bid, while another does not care about money that much and simply wants to find the buyer who will treat his house with the same respect. Real estate agents in these cases recommend buyers to write a personal note to the seller explaining the pros of selling the house to them.
Finally, the house is chosen and the owner has agreed on the price. What are your next steps?
Get your loan approved and hire a housing inspector
To do the first you need to order an appraisal from the lender and do some paperwork. As a result, your loan application will be processed pending for approval. As for the housing inspector, it’s just a part of preventive security measures, so do not neglect due diligence, because the inspector can find problem areas that can put the transaction into question.
Wait for appraisal results
From now it is all up to appraisal, meaning that if the sum of the purchase you agreed on is equal to or greater than the expert’s determination of the property’s value – it is time to laud victory. However, if it is less, you will have to find extra money, renegotiate the price, or look for another house of your dreams.
Pay the closing costs
Usually, this happens at the final meeting when you sign all the documents and get the keys. The amount of these costs ranges from 2 to 5 percent of the final purchase price and includes attorney fees, appraisal fees, a down payment, homeowner’s insurance, and property taxes.
As we have just gone through all the steps, buying a house does not seem to be a great challenge anymore.
It all starts with consideration phase when you think of different options that will suit you the best, after which you need to make a brief analysis of what is going on in the market to be more aware of current trends.
Find out about your financial boundaries by shopping for a mortgage, and then find qualified specialists who will navigate you through the whole process. Together with our brokers who have testified in favor of their competency throughout 20 years of working in real estate, you will look for a desired house and visit several open houses until you finally find it.
Make a reasonable offer and negotiate the price in case you see a better option for yourself. Get your loan approved and hire a housing inspector, who will check the property for any deal-stopping issues. Pay the closing costs and this is it.
On average it takes from six months to two-and-a-half years before moving in. We hope that with the help of these tips you will save your time, spare your nerves, and avoid making the most common mistakes.