Buying a new home is a dream for many people, but it can easily turn into a nightmare when due diligence is not done, or there are other failures in preparation. Thankfully, you do not have to reinvent the wheel, as others have gone through this process before you and you can learn from their experiences. To go through the home-buying process safely, here are the eight important steps to take.
1. Start by Assessing your Financial Position
Like most people, you will likely be looking forward to part-financing your home with the help of a mortgage. To get a mortgage, however, you will likely be required to provide some of your own money, though not usually a lot of it—usually anywhere from 5% to 20% of the total value of the home.
You should also be sure to keep an eye out on your credit score, as this will determine the number of outcomes, including whether or not your mortgage is approved, the amount of your own money you need to invest, and other terms of the mortgage agreement.
2. Carry Out Some Market Research
Keeping an eye on the real estate market, from long before you ever settle on a particular home, will be ideal. You need to keep tabs on price information and changes, demand and supply trends, etc. This will not only help guide your choice of house but will also help you create a suitable budget.
Sometimes this information will be out of reach to the average Joe, but you can seek advice from a trusted real estate agent who will not only have all the information that you need but will also have access to insider information that can help you make smarter choices.
3. Seek pre-qualification
If you have gone through the two previous steps, then you might have a good idea of what your house budget will be. Don’t rely on guesswork alone, however, as you can obtain an accurate figure simply by seeking pre-qualification from a lender. When it comes to home purchasing, lenders will require that you provide them with some financial details, which will include sufficient data to create a credit risk profile on you.
4. Choose a house
If you have gone through the preceding steps, now you know what your budget realistically should be. Now would be a good time to start searching for a house that fits all of your requirements, especially in terms of finances. At this point, a willingness to compromise is necessary, as you are not likely to find any one place that meets all of your requirements.
To simplify the process, you may also wish to speak with a real estate agent who can help you shape realistic expectations, as well as give you pointers on where to look to find the perfect home for you.
5. Contact the Seller
Armed with your estimated budget, as well as your market research, you will now be ready to contact the seller with an initial enquiry or to make an offer. If you are not skilled at negotiation you may fall, very easily, into one of two pitfalls. The first is making an offer that is so far below the realistic market value of the house that the seller refuses to listen to you, and the second is making a starting offer that is too close to the asking price.
If you are working an agent—which you should, then you should probably defer to them, and allow them to interface with the seller (who might, themselves, be another agent).
6. Schedule an Inspection
Home inspections are probably one of the most important stages of the process, and mistakes made here may have lasting effects. To be safe, you should, again, rely only on professional help. Your agent will be able to recommend a good home inspector who can assess the structural integrity of the house, including hard-to-reach areas such as the roof and the foundation. Often serious structural issues may be masked by a nice paint job or external design.
7. Apply for a Loan
Once you have picked out the right house, the next step is to go ahead and apply for a loan. If you went through the pre-approval process, this stage should be straightforward, as the lender already has your information and financial needs on file.
8. Complete Paperwork
Hopefully, everything will have gone according to plan, and all you will need to do is complete and submit the paperwork. Along with your agent, hiring a lawyer to go over the fine print might be a good idea.
One the seller has received their payment; you will be free to take possession of your new house.
5 Things to do With Your New House
Once you have possession of your new home, you will be free to move in and make it yours. Some things to do immediately or as soon as you possibly may include:
Sort out Utilities
Things like gas, water and electric will need to be registered in your name for appropriate billing. You may also need to sort out other less pressing utilities like the internet before you move in.
Do a Deep Clean
When you move into a new property, you should do a thorough clean out of the entire place. This might be strenuous, and you may consider hiring a cleaning service to do it for you.
Get new Locks
While the previous owners might have been perfectly nice, you may not have any way of knowing just how many people have a key to the house other than them. For everyone’s safety and peace of mind, simply arrange to have new locks installed.
Update Your Contact Details
As you might imagine, there will be a lot of people and places who might still have your old contact details, which could lead to some confusion, and worse, lost or misplaced packages. If you have a job, your employer will need to have your details updated for tax and other official purposes required by law.
Ready to Buy a New Home?
The process of purchasing a new home can be lengthy and somewhat complicated. However, you will find that the rewards are generally well worth it. By following the simple tips, we have provided here, you will be better able to avoid many of the pitfalls that plague uninformed home buyers.
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