12 Essential Steps Involved In The Home Buying process

Home buying is not as easy as it sounds to be. Home buying process is quite complex and challenging especially for a first time buyer. You need to take a number of things into consideration in order to purchase your dream home.

There are 12 essential steps in home buying, which are discussed in the following lines.

1. Check your credit report and raise score if necessary

As a first time home buyer, you’re likely to take out a mortgage in order to buy your new house. Therefore, check your credit reports and if required, increase your credit score. If you have a good credit score, then you’ll be able to get low interest rate on your mortgage loan.

2. Make a budget and follow it

You should save money for closing costs and down payments before you start your home buying process. Therefore, plan a budget and follow it strictly so that you’re able to save a certain amount every month. You should also maintain detailed records of your expenditure so that you’re able to review it and make changes in the budget if required.

3. Create a detailed financial plan

Apart from making a realistic budget, you should also create a detailed financial plan in order to accomplish your goal. At first, you should make an aim of saving at least 20% for your down payment, which will help you to obtain favorable rates on your mortgage loan.

4. Establish a good relationship with a real estate agent

One of the essential steps in home buying process is to establish a good relationship with a real estate agent. The range of expertise varies from one agent to another; therefore, it is advisable that you search for an agent who has expertise in working with a first time buyer.

5. Study present market values

If you study current market values, then you’ll be able to develop knowledge about residential properties. It will also help you to decide whether or not a property is overpriced.

6. Get pre-approved for a mortgage loan

Getting pre-approved for a mortgage loan is one of the most important steps in home buying process. You’ll find that every lender is not willing to work with a first time buyer. A pre-approval will help you to close on the purchase more quickly than others.

7. Decide your needs within your budget

Whenever you’re buying a home, you’re making a major financial commitment. Therefore, it is quite essential that you make a list of your requirements according to your affordability. It is not always possible to get everything you want in your first home. As a first time buyer, your incidental expenditure can add up to your budget; therefore, include that amount while planning your budget.

8. Begin your search for a good home

As soon as you finish listing your requirements, start your search for a good home that matches your necessities. You should also inform your real estate agent about your budget and the type of house you’re looking for. Do not forget to inform the agent regarding the amenities (such as, fireplace, swimming pool, number of bedrooms, etc.) that you want in your new home.

9. Choose a right neighborhood

Along with buying a suitable house, it is also essential that you search for a right neighborhood. List your requirements according to your priorities, such as, whether or not there is a good school in the neighborhood, popular attractions in close proximity, etc.

10. Submit your offer for buying the home

After you’ve finished the initial steps in a home buying process and got a suitable house that matches your basic requirements, go ahead and submit an offer. It is very essential that you keep control on your emotions and negotiate logically.

11. Make arrangement for a home inspection

Not only the first time home buyers, even experienced real estate investors rely on qualified home inspectors before they invest in a property. An inspector will examine all the necessary components and will bring to your attention the deficiencies of a property through a written report.

12. Purchase homeowners insurance

Purchase adequate homeowners insurance policy so that your house is well protected and you do not suffer any financial loss due to any unforeseen circumstances.

It is advisable that you hire a real estate lawyer/attorney before you start with your home buying procedure. A lawyer will be able to guide you throughout the entire process. He/she can also save you from doing costly mistakes throughout the complicated home buying process.