First time home buyer ? Learn how to buy a house !
Many people are interested in buying their own houses. It is not strange, because everyone wants to provide the best living conditions to himself/herself and the whole family. Buying a house is not a typical purchase, because the whole process of purchasing is more complex. In most cases, it begins with looking for a mortgage and ends with closing on the home, but there are many other important steps between the beginning and end of this process.
People who are interested in buying a house may think that the whole buying process is very complicated, but it can be very smooth if they know what to expect and what to do. The length of the home purchasing process is different according to the situation of buyers and it can take from six to even 30 months before moving into a new house. It means that the first time home buyer needs to be patient. The average consideration phase takes up to 4-5 months, the process of shopping takes 30-90 days, offer negotiations take less than a week and closing time takes another 30 days. The whole length depends on good preparation and having the appropriate help in the process. New homebuyers need to remember some important steps to take in the procedure of buying a new house. There are also special e-books that show how to buy a house and what to expect.
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1. Buying a house for an appropriate mortgage
The first step is looking for the best possible mortgage offer. Thanks to this, You will be able to see how much You can afford (mortgage + income and savings). Once You will become pre-approved in the bank, sellers will know that You are ready to buy and serious. Good comparison of mortgage offers is very important because different institutions provide different offers according to their own rules. In most cases the credit score of a client is divided according to the following rules:
Payment history: 35%
Credit utilization: 30%
Credit history length: 15%
Types of credit: 10%
New credit: 10%
Based on the aforementioned pieces of information, the financial institution offers a mortgage amount. If You know what sum of money You will be able to spend, You can start searching for appropriate houses in the appropriate price range.
2. Hiring a good real estate agent
People who do not know what to look for when buying a house and who do not have any experience associated with this process should think seriously about hiring a good real estate agent. Of course, You can try to find and buy a house on Your own, without the help of these agents, but You will not lose anything, because sellers pay an agent’s commission. Good Agents have large expertise in the process of buying a new house, they know the market very well, have got wide contacts and know how to negotiate. Thanks to the help of these Agents, You will be able to find an appropriate house that meets all Your requirements and the whole procedure of purchasing will not take so much time. In other words, hiring a Real Estate Agent is a money-saving and time-saving option. If You do not know how to find a good Agent, it is a good idea to ask friends and members of the family for advice. There are also special online reviews that are also very helpful in identifying the best agents that meet the requirements of people who buy houses. Of course, remember about the face-to-face meeting before making a final decision.
3. Preparing a list of requirements
Your shopping process will be more effective especially if You know what are Your needs and requirements, so You know what to look for. Try answering many specific questions about Your ideal house. How many bedrooms do You want to have? Do You need a large property? What is Your favorite location? Are You interested in extending Your family and want to buy a large house? Do You want to live near Your place of work? Are there any good schools near the house? There are many examples of these questions. Remember about the most important features that Your house must have and about some features that are interesting but not required. Thanks to this list of requirements, You will be able to select only offers that meet Your specific needs.
4. Searching for houses on the Internet
Of course, Real Estate Agents know how to look for offers, but You can improve the process by looking on Your own. The Internet is a very powerful tool that includes many websites with houses for sale. The amount of advertisements is very large, so knowing the maximum possible price and having a list of requirements are important factors in searching only for houses that will be ideal for You.
5. Visiting open houses
Co-operate with Your agent and visit as many houses as You can. Even if You think that the first house is ideal, keep visiting other houses and compare them with each other. This is a very important procedure and thanks to it, You can be sure that You use Your mind (not feelings) in making a final decision.
While visiting a house, You need to check some details that are important. It is good to test the plumbing by using a shower and the electrical systems by using on and off switches. People who do not know how to buy a home should also remember about checking the work of windows and doors by opening and closing them. It is also good to evaluate local traffic, neighborhood, parking options, etc. Take Your time and check each house very carefully.
6. Making an offer and negotiation process
A good and experienced Real Estate Agent will guide You on what kind of offer to make on the basis of different factors like the initial price, the market and based on how much are You interested in buying the specific house. In case of a competitive market, some agents will recommend You to write a personal note to a seller. If they choose from many buyers, they will select the offer that is ideal for them. Your offer can be accepted, rejected or You will need to participate in negotiations.
7. The process of loan approving
Another important step after accepting an offer is the official approval of a loan by the financial institution. Customers who are pre-approved by the bank have got large chances of getting a mortgage. After all the steps described above, You need to get back to Your lending institution to move on with the process. The bank or other financial institution that offers a mortgage will order an appraisal. You will also be obliged to sign and prepare some additional documents. Before the final approving, the loan application will enter the stage of underwriting.
8. Inspection of a house
Another important step that the first time home buyer should remember about is a home inspection. During this inspection, experienced specialists check the house and search for signs of structural damage or other things that require fixing. Real Estate Agents can help You with arrangements associated with these inspections. They take place usually a few days after the seller accepts a purchase offer. Thanks to this inspection, You will know what You are buying. In case of some problems, You can negotiate the price or withdraw Your offer without any penalties. These inspections help to avoid damaged houses that are money pits.
The inspector provides an inspection report to the buyer and the seller. You are entitled to ask the seller to fix some problems, lower the price, etc. You are also entitled to check if problems are fixed before the sale closes.
9. Waiting for the appraisal
People who are buying a house for the first time need to remember one very important rule. A bank will not finance a house for the price that is larger than its real value, so the appraisal is a very important document that is deciding in case of a loan. This document is a determination of a real property’s value, prepared by an expert. If it is larger than Your price, then You will receive Your loan. It the appraisal is lower than the price, You may need to negotiate the price, provide some additional money or forget about that particular house.
10. Payment of closing costs
It is the last step of the house purchasing process. After paying the closing costs You will become the owner of a house. In most situations, closing costs represent about 2-5% of the purchase price. These costs include attorney fees, appraisal fees, insurance, taxes and many other payments and charges associated with the process of buying a house. You will need to pay them during a meeting where You will sign documents and receive the keys to Your new house.
As You can see, the process of buying a house is quite complex and includes many important steps. Fortunately, there are some options that can be very helpful, so they will make the whole process easier and faster.
Where can we look for help?
For people who do not know how to buy a house, every kind of help is important. You can hire professionals like Real Estate Agents or Financial Advisors who will help You with searching for the most appropriate house and for the best possible method of financing the purchase. They will help with the paperwork and other aspects of searching for houses and loans.
You can also ask Your family members and friends for some help and advice. Maybe some of them are more experienced and they know how to buy a home and they know what to look for when buying a house, so their help can be valuable for new homebuyers. They will give You some tips about price negotiations or about the most important elements and aspects of new houses, so You will be able to prepare a good list of Your requirements. Do not be shy and feel free to ask for advice, so the home purchasing process will be less complicated and faster for You.
Another good source of help is the Internet. You can find many websites with some valuable tips and other pieces of information that You need to remember. There are also special e-books with complete recipes for good home purchasing procedures. These e-books are ideal for people who do not know how to buy a house. They will describe all the aforementioned steps in detail and they also include answers for the most common questions asked by people who are buying houses for the first time.
Of course, the Internet is also full of websites with reviews, so You will be able to find Real Estate Agencies, Financial Institutions, Inspectors and other helpful service providers with the best ratings received from their clients. Searching for reviews, asking families and friends for their opinions, hiring professionals, buying and reading e-books – these are very good methods of making the home purchasing process much easier and faster.
If You are interested in receiving a helpful e-book, then You need to check offers of online stores. They provide access to many good e-books associated with the house purchasing procedure. They sell only the best e-books written by professionals who have got a large experience in purchasing houses, searching for loans, etc. Buying these e-books is a good decision, because they are not very expensive, so You will be able to improve the process of buying a house for a very low price. These books are electronic documents, so You will be able to read them a few minutes after You make a payment. Fortunately finding stores with these valuable and helpful e-books is a very easy task. There are many websites of these stores available on the Internet. You can also buy these valuable e-books on auction portals and with the use of flexible and fast payment systems.