While the home buying process can be exciting and rewarding, it can also be intimidating and stressful if you begin without proper preparation. Before you start looking for houses, check out these 6 important steps to buying a house.
Pay Attention to Financial Matters
Secure copies of your credit report from all three of the major reporting agencies. Your credit score and items on those reports will be seriously considered by any mortgage lender. Once you get the reports, check for errors and negative items. If you find errors, contact the reporting agencies right away to get them corrected. If there are negative items that need to be paid, take care of those. You may be tempted to get just one report, but you need all three to get an accurate picture and to make sure all the reports match in information provided.
You should have a savings account that holds enough to take care of any down payment needed for the house once you are approved for a home mortgage loan. Keep in mind that there may be closing costs, renovation costs, and a good-faith deposit that may need funds. It’s a good idea to save more than you think you’ll need.
Secure a Real Estate Agent
On a balance scale, you can see that everything you know about real estate is much less than everything a real estate agent knows about that topic. Add in their extensive experience, and you’ll soon see that it benefits you a great deal to have a professional real estate agent on your side during the home buying process.
Ask friends, family, and business associates for recommendations. Spend some time doing research online and read testimonials. You’ll want to interview potential real estate agents and ask questions about their communication methods, their use of technology, and their past experience. Choose an agent that is tuned in to your needs and genuinely cares about communicating with you at the highest level.
Get a Pre-Approval Letter
You don’t want to be one of those home buyers who falls in love with a house only to find out that it’s way outside of your price range. Getting a mortgage loan pre-approval from a lender will help you understand your financial boundaries. Knowing which price ranges you can search through will save you valuable time.
A pre-approval letter from a lender will give your credibility when it comes to supporting an offer you’ve made on a house. Often, several offers are made on the same house. If you have a pre-approval letter, the seller may look upon your offer more favorably.
Begin the Home Search
Once you’ve gotten your credit in order, saved an appropriate amount of money, and received your pre-approval letter, it’s time to begin the house search. Create a list of items that you consider must-have features. Use this list to cut through the initial list of houses that reach your potentials list. Know where you are willing to compromise and where you refuse to budge.
While you can search for available houses online or by driving through the neighborhood, you are better served to seek the help of your real estate agent. They have access to information before it reaches the internet, and they can help you narrow down your search quickly. Trust their knowledge and experience.
Make the Right Offer
Once you’ve found the house of your dreams and confirmed that it meets your must-have list and is on target for price range, it’s time to make an offer. Your real estate agent will help you come up with the right offer to impress the seller.
As we mentioned previously, you may come up against other buyers when offers are hitting the table. Be ready to come back to the table with a new offer if it makes sense and is recommended by your real estate agent. This is where their experience in negotiations is often a key to your success. Consider this when choosing a real estate agent.
When your offer is accepted, it’s time for inspections, appraisals, and final preparations with your mortgage lender. This is when you’ll make your down payment, pay closing costs, and sign a number of documents. You are in the home stretch here, so don’t let stress get the best of you. Consult with your real estate agent often and ask any questions that you have about the process.