You’ve decided you’re finally ready to buy a house. But where do you even begin? The home buying process can be overwhelming, even for the savvy first-timer. Don’t sweat it though, we’ve got your back. We’ll walk you through everything from saving for a down payment to negotiating like a pro when you’ve found your dream home. Buying a house is likely the biggest purchase you’ll ever make, so you’ll want to make sure you do it right. Follow our tips and you’ll be well on your way to owning your first home in no time. Getting pre-approved for a mortgage, finding the right agent, and knowing your must-haves are just a few of the keys we’ll cover to set you up for success. So let’s dive in and turn you into a home buying pro.
Determine Your Budget for Buying a Home
The first step to buying a house like a pro is figuring out how much you can afford to spend. This will help you determine a realistic budget and price range to focus your search.
Several factors determine your budget for a house:
-Down payment: Typically 20% of the purchase price. The more you can put down, the better. A larger down payment means lower mortgage payments and interest charges.
-Income and debts: Look at your income and any outstanding debts like student loans or credit cards. Your total monthly housing payment, including principal, interest, taxes, and insurance, should be no more than 28% of your gross monthly income.
-Interest rate: Interest rates directly impact your monthly payment. Shop around at different banks and lenders for the best rates. Even small rate differences can save you thousands over the life of a mortgage.
-Additional costs: Don’t forget closing costs, moving expenses, and any needed repairs or renovations. These can add significantly to your total cost.
-Preapproval: Get preapproved for a mortgage before you start house hunting. This shows sellers you’re serious, and it ensures you don’t fall in love with a house you can’t afford. Provide financial documents like pay stubs, tax returns, bank statements, and information on your debts to get preapproved for a fixed amount.
Once you determine a budget, you’ll want to start searching for homes at least 5-10% below your maximum to account for price negotiation. And remember, your budget may need adjusting based on home prices in your area. But do not be tempted to stretch beyond your means. Buying a house you can comfortably afford is key to being a pro in the home buying process.
Get Pre-Approved for a Mortgage Before House Hunting
Before you start seriously house hunting, get pre-approved for a mortgage. This means meeting with a mortgage lender to verify your income and credit score to determine how much they’re willing to lend you. Getting pre-approved has several benefits:
You’ll know your price range. With a pre-approval letter in hand, you’ll know exactly how much you can borrow so you can focus your search on homes you can actually afford. No more wasting time on places that are out of your budget.
You’re a serious buyer. Sellers will know you’re able to obtain financing, so they’ll view your offers more favorably. This can give you a competitive edge, especially in a hot market.
The process is easier. Providing the necessary documents to get pre-approved is much simpler than rushing to gather all the paperwork required for a final mortgage approval after you’ve made an offer. Get it out of the way upfront so you’re ready to move quickly if you find a home you want to buy.
You can lock in an interest rate. Interest rates change frequently. Locking in an interest rate at pre-approval helps ensure you get the rate you were quoted, even if rates go up later. Some lenders will allow you to re-lock at a lower rate if rates drop, so ask about their re-lock policy.
Shop and compare lenders. Apply for pre-approval with multiple mortgage lenders to compare their rates and fees. Choose the lender that offers you the best overall deal. You’re not obligated to stick with any single lender just because they pre-approved you.
Once pre-approved, you’ll receive a pre-approval letter stating the amount you’re approved to borrow. Provide copies of this letter when making offers on homes to show sellers you’re a serious, qualified buyer. Happy house hunting! With the right preparation and knowledge going in, you’ll be well on your way to buying your new home like a pro.
Find a Real Estate Agent to Represent You
Finding the right real estate agent is one of the most important steps to buying a home. An agent who understands your needs and priorities can guide you through the entire home buying process, helping you avoid costly mistakes along the way.
Look for an agent who has experience helping first-time homebuyers. Ask friends or family members for referrals, or search online reviews from sites like Zillow, Realtor.com or Homes.com. Schedule consultations with a few top candidates to discuss their experience, qualifications, and availability. Be sure to inquire about their typical commission rates—a standard agent charges between 5 to 6% to represent the buyer.
Once you’ve selected an agent, they will help you determine what you can afford based on your income, debts, and down payment. They will also educate you on the home buying steps and timelines so you know what to expect.
Your agent will help you find homes that match your wish list by setting up customized property alerts and scheduling showings for places that interest you. They can point out any potential issues with the homes you view and help determine fair asking prices. They will also handle all negotiations with the seller’s agent on your behalf to get you the best deal.
During the closing or settlement process, your agent will make sure all paperwork is properly handled. They will coordinate with your lender, title company, and the seller to ensure everything goes smoothly. Even after you’ve purchased your new home, a good agent will stay in touch to see if you have any additional questions or need referrals for home services.
Using an agent to buy a home is typically free for the buyer. Their commission is paid by the seller at closing. While the internet has made it possible to search for homes yourself, a real estate professional has the experience and expertise to guide you through what is often the largest and most complex financial transaction of your life. Finding the right agent to represent you is a key step to buying your home like a pro.
Make an Offer and Negotiate Like a Pro
Do Your Research
Before making an offer, do research to determine the fair market value of the home. Check recent selling prices of comparable properties in the neighborhood. See what similar homes are currently listed for. Get pre-approval from a mortgage lender so you know your maximum price range.
Start Low
When you’re ready to make an offer, bid at least 5-10% below the asking price. This gives you room to negotiate and may reveal the seller’s minimum acceptable price. Don’t get emotionally attached – focus on getting a good deal.
Provide Earnest Money
Include a deposit of at least 1-2% of your offer price with the initial bid. This demonstrates to the seller you’re serious. The money is held in escrow until the sale is complete. Make sure any contract stipulates the deposit is refundable if you’re unable to obtain financing.
Consider Contingencies
Attach contingencies to protect yourself like financing, appraisal, and inspection. A financing contingency gives you time to apply for a mortgage. An appraisal contingency ensures the property appraises for at least the offer price. An inspection contingency allows you to withdraw or renegotiate if issues are found.
Be Flexible
Expect some back-and-forth. The seller may counter your initial offer or reject it altogether. Be willing to negotiate in a respectful manner. Increase your bid incrementally and avoid escalating too quickly. Have a maximum price in mind you won’t exceed.
Once Accepted
Once an offer is accepted, you’ll enter into a legal sales contract. Arrange for a professional home inspection and appraisal within the specified time periods. Finalize mortgage approval and home insurance details. Plan for a final walkthrough shortly before closing to ensure everything is as expected. Finally, review and sign final paperwork, and the home is yours!
Following these tips will help you negotiate confidently and get the best deal on your new home. Stay calm and focused, do your due diligence, and don’t be afraid to walk away if needed. With patience and persistence, you’ll be closing on your dream home in no time.
Close on Your New Home and Move In
Congratulations, you’re almost there! After months of searching, offers, counteroffers, and signing what felt like a small forest’s worth of paperwork, closing day has arrived. This is when you’ll sign the final papers to officially purchase your new home. Make sure you set aside plenty of time for what can be an lengthy process. Come prepared with:
- Your down payment, either in the form of a cashier’s check or wire transfer.
- Identification, like a driver’s license or passport.
- The keys to your current home, if you’re moving from another place.
At the closing or settlement, you’ll review and sign the final sale documents with the seller. This typically takes 1 to 3 hours. Bring snacks, water, chargers, cash, pens—anything that will help make a long wait more comfortable. The closing agent will review each document to ensure all terms match and both parties understand before signing. Once complete, congratulations are in order—you now own your new home!
Next up is moving all your belongings into your new place. If possible, take a day or two off work to focus on the move. Start by cleaning and doing any needed repairs to your new home before the movers arrive. Pack a separate bag with essentials you’ll need right away like toiletries, pajamas, chargers, and snacks.
On moving day, be on hand to direct the movers and oversee loading and unloading. Make sure boxes are labeled by room so you know where everything goes in the new house. Take your time unpacking and don’t feel rushed to get everything done in one day. Explore your neighborhood and unwind after the busy day. Welcome to your new home—enjoy this exciting new chapter!
Conclusion
So there you have it, all the inside tips for navigating the home buying process like a seasoned pro. By getting clear on your must-haves, sticking to your budget, assembling your A-team of professionals, and keeping emotions in check, you’ll be well on your way to landing your dream home sweet home. Sure, buying a house can be stressful, but going in armed with the right knowledge helps smooth the ride. And just remember, it may take some patience and perseverance, but with a solid strategy focused on your goals, you can absolutely crush it. Before you know it, you’ll be cozied up with your favorite takeout on moving day, toasting to the keys of your new castle. Congrats future homeowner, enjoy the journey!
