How to Buy a House
Buying a house will probably be the biggest financial investment that you make during your lifetime. Add to that the current state of the United States economy, and it is easy to see why buying a house is something that you don’t want to simply run out and jump into. Like most big financial decisions, it is best to discuss buying a home with a financial adviser before making any final decisions (having a lawyer to work with will also make the process much easier). However, this guide should give you a solid introduction to the process of how to buy a house.
Get a Realistic Picture of Your Current Financial Health
The reason that so many current homeowners have found themselves facing the all too real possibility of losing their home is because they purchased homes that they couldn’t actually afford (even though unscrupulous lenders convinced them otherwise). To ensure that you don’t find yourself in a similar situation, you need to honestly and realistically evaluate your current financial health. By using an unbiased source such as Ginnie Mae, you can calculate what you will be able to afford once you begin searching for a home.
Casually Visit a Few Open Houses
Once you know the price range of houses that you will be looking for, it may be tempting to jump in and start looking as quickly as possible for your future home. However, before you begin looking for yourself, it’s important to get a feel for the overall housing market (this is especially important if you are buying your first home). The best way to get a feel for the housing market is to go out and visit some open houses first hand. Open houses are a great way to see a variety of homes without feeling any pressure.
Sit Down and Pinpoint What You Expect from Your Future Home
After you have visited a variety of open houses and gotten an idea of what kinds of homes are available in your price range, you need to sit down and make a concrete list of what you expect from your future home. In addition to things you have always known that you wanted from your future home, you may have seen some new things during your open house visits that interested you. Not only should you decide what you want from the house itself, but you also need to think about things such as the yard, the neighborhood, etc.
Enlist the Help of a Professional Agent
As you have probably already realized, buying a house is not an easy task. Therefore, in addition to getting advice from a financial planner and a lawyer, you will want to have a professional that can take you step-by-step through the process. This person is a buyer’s agent, and because they will play a major role in your home buying process (remember, they are the person on your side, while the seller’s agent is the person on the seller’s side), you will want to choose someone that you trust and get along with.
Avoid the Impulse to Buy the First House You Visit
Buying a house is an emotional process. Therefore, it’s not uncommon for people to “fall in love” with the first house they visit. Although you may be convinced that the first home you visit is your dream home, slow down and realize that there are lots of other homes on the market that may be just as good or better for you. Make sure you visit lots of different homes in your price range, and take note of the ones that meet all of the criteria you put down on paper.
Do Your Homework on Any Potential Future House
Once you find a house that meets all of your expectations, it’s time to do your homework. It may be tempting to make an offer right away, but you need to resist this urge and do some homework first. Your agent may have additional suggestions, but common things to complete are visiting the home at different times of the day, researching the address online, obtaining statistics from different community departments (such as the school district and police department) and getting the seller’s disclosure report.
Get Ready to Make Your First Offer
If the house still looks good once you have completed all of your homework, it may be time for you to make an offer. This is one area where having a good agent can make a huge difference. A good agent can ensure you make a great offer by doing things such as researching what other buyers have recently paid for nearby homes and evaluating the seller’s asking price based on their personal experience. In most cases, you will go through at least one round of negotiations after making your first offer.
Have Your Potential Home Thoroughly Inspected
Before you make any final decisions, you need to have the home inspected to make sure there aren’t any hidden problems that you don’t know about. The seller’s agent will probably suggest a specific inspector, but you will get a better evaluation if you choose an unbiased inspector on your own. In addition to a general inspector, you may want to have the home evaluated by specialized inspectors (such as a pest inspector or septic tank inspector).
Dot the I’s and Cross the T’s
If you and the seller reach an agreement and nothing unexpected arises during the inspections, the last step in the home buying process is closing the deal. Even though this is the very last leg of the home buying process, there is still a chance that something can fall through before the deal is completely finalized, so make sure that you avoid making plans to move on the day of your closing. Having a lawyer guide you through this last stage of the process will greatly increase the odds of avoiding any potential problems or hassles during the closing phase. If all goes well, you will become the owner of your own home!
