Navigating the Home Buying Process: A Simplified Guide
If you’re about to embark on your first-ever home-buying journey, you might be filled with a mix of excitement and trepidation. But don’t worry. You’re not alone. The number of first-time buyers jumped last year by just over 6%*, and the National Association of Realtors (NAR) predicts home sales will jump by 13.5% in 2024%, meaning there’ll be at least 1.5 million others just like you – looking to go through the home buying process for the very first time.
This quick-fire guide will prepare you for this crucial next step in your life. By reading it and getting up to speed with all the steps involved, you can go into the process informed and confident with your decisions.
So, let’s dive in and equip you with everything you need to know.
Before opening up Zillow or similar property sites to start your search, consider what you need from your first home. Start with the basics. For example, how many bedrooms do you need? What about the future? Are you planning on having a family in the short or medium term? Thinking ahead can save you the headache of going through the process again sooner than you’d thought.
Then, look at the standard factors such as location. How far is your commute going to be? Do you need a home office to facilitate remote working? These are all key questions you need to consider, and it’s only once you’ve decided your “must-haves” from your home that you can begin the budgeting process.
Once you’ve drafted a list of your minimum requirements, it’s time to start tallying those up with your available budget. Make a realistic budget by assessing your income, expenses, savings, and any existing debt. That will give you a brief picture of where you might stand regarding financing and home loans, but you must factor in additional costs you might not pay now, such as property taxes or mortgage insurance.
Once you’ve pored over your key personal financial metrics (such as your credit score and debt-to-income ratio), it’s time to delve into the world of mortgages. The good news is that several preferential first-time buyer loan programs and grants are available to you – both at the state and federal level. Research these and speak to a broker to better understand what you can secure.
At this stage, it’s then wise to proceed to a mortgage pre-approval. It gives a more solid idea of what you’ll have to play with and shows potential sellers you’re serious and can move forward quickly.
With your budget and mortgage pre-approval in hand, you can start shopping for homes. You may or may not want to enlist the help of a real estate agent at this point. However, online tools can give you all the research information you need, such as average home values, safety statistics, and future development plans.
As someone fresh to the market, it may pay to look primarily at new construction homes. They represent around a third of the homes currently for sale and feature modern designs and contemporary features. Otherwise, you’ll have to pay much closer attention to potential issues, including essential elements like plumbing, electrics, and the roof. With a brand new home, you won’t need to worry about these as they will all be freshly installed, so bear that in mind.
When you’ve found the perfect place, it’s time to make an offer. At this point, make sure your offer aligns with your budget. Don’t let emotions come into it and overstretch your position. Try to find out the seller’s position and motivations, as they may influence your approach to any offer and subsequent negotiation.
For new homes, you might find that base sales prices are non-negotiable, but you could secure additional perks such as upgrades. Some leading national home builders, such as Terrata Homes, offer builder-paid closing costs or introductory mortgage rate reductions. Look out for these promotions, as they can be worth tens of thousands of dollars. Even if those dollars aren’t coming directly off the sale price, they’re serious savings.
The final stretch of the home-buying process is closing. While you’re almost there, this crucial stage shouldn’t be rushed. Your biggest safeguard against future issues is a thorough home inspection. You must make your way through every nook and cranny to ensure the property’s condition aligns with your expectations and address any concerns or issues there and then. It’s your only opportunity to do so.
As for closing, familiarize yourself with the process and associated costs, including title fees, attorney fees, and taxes. These fees are usually several thousands of dollars (if not more). So don’t get caught out. Research what you can expect to pay ahead of time and include them in your budget.
With closing done and the contracts signed. All that’s left to do is get your keys! Although, in truth, that’s not quite it. You’ll need to plan ahead when it comes to moving day, and hiring professional movers might be a wise investment to make the move as stress-free as possible.
Once you’re in and settled, remember to keep on top of regular maintenance tasks and start planning and budgeting for any future renovations that will add value and more enjoyment to your property.
With these final steps, you can start laying the groundwork for many happy years of homeownership – whether you choose to stay around for a while or move again in the future. Having read this quick guide, you’re now ready to start the journey and embark on this existing path with more surety and clarity.
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