Buying a home is a huge accomplishment, not least because it is a process that takes time and care to navigate. If you’re a first-time homebuyer, you may feel especially daunted by the process and what it involves. Fear not—knowing what to expect and how to plan is half the battle!
Below are the six major steps you can expect to take when buying a home. There are important advantages in some of these steps, so keep reading to find out how to make the most of your home buying process!
1. Contact An Agent
First, connect with a real estate agent who will help you through the buying process from start to finish. Agents are available to help eliminate the stress of the homebuying experience by providing buyers with thorough, up-to-date knowledge of the market, as well as support with finding homes, getting a loan, negotiating with sellers, and completing paperwork.
Aside from making the buying process smoother, experienced agents protect you against pitfalls in the process and can save you money by working to negotiate in your best interest. We recommend that you have an agent before walking into any open house and especially before any serious dealing with the seller’s agent. It is your agent’s job to work in your best interest during every step of the homebuying process.
When it comes to choosing a particular agent, choose an agent who listens attentively to your concerns. You should be able to have an open, ongoing communication about what you are looking for in a home, whether that pertains to location, wants, or needs.
2. Get Pre-Approved
Next, choose your lender and work with them to determine your budget and the terms of your loan(s). When choosing a lender, your agent can provide you with a reputable local lender to get you pre-approved. A local lender & loan office that we use in the Fredericksburg and surrounding region is Movement Mortgage. Your agent can provide you with credible lenders in your specific area.
When it comes to approval, one of the main ways that lenders decide whether to finance you or not—or how much to loan you—is by looking at your credit score. To qualify for a home loan, you’ll generally need a good credit score, a satisfactory debt-to-income ratio, and a good history of paying bills on time.
If you’re a first-time homebuyer, you are at a unique advantage when it comes to approval for loans. If you qualify as a first-time buyer and are unable to provide the minimum down payment on your home, you can have access to federally backed loans, state programs, and tax breaks. You may be able to qualify as a first-time buyer even if you have owned a house in the past, so it’s always a good idea to check if you’re qualified.
When you are approved for a loan, you will get a loan that coincides with your current income. Even after you are approved, sit down and go over your budget once more to make sure you won’t be overextending yourself. It is good practice to keep spreadsheets or other records to narrow down your expenses and predict what you can realistically afford to spend on mortgage payments each month.
3. Visit Potential Homes
What are you looking for in a home? What are your wants and must-haves when it comes to location, physical structure, and amenities? Work with your agent to look for the homes that meet your top priorities.
And great news, it’s never been easier to house-hunt on your own! You can find homes on online listing websites such as coldwellbanker.com and narrow down your search to a list of your favorites. When you go to visit these homes in person, write down notes about the home’s amenities and questions or concerns. Review your notes later to go over which homes stood out to you and the things you like and dislike about each property.
4. Make An Offer
Once you’ve narrowed down your favorite homes to the one that makes the most sense for you and your lifestyle, get with your agent to discuss making a fair offer to the seller. Ask your real estate agent to run a comparative market analysis to determine a fair offer price based on recent sales of similar homes in the area before making your initial offer. Include in your offer any terms that will benefit you too. Your agent can help you to determine these beneficial terms and work them into your negotiation. Sellers may counter your offer, so have a plan set in place to negotiate any terms.
5. Satisfy Contingencies
You’re almost ready to sign papers now! After you’ve made an offer, revisit any contingencies that you have made with the seller.
During this contingency stage, we highly recommend that you get a home inspection. A home inspection gives you a thorough idea of the condition of your new house and alerts you of any major repairs that are needed. Depending on the situation, you can negotiate with your seller and have them fix the major repairs before you move in.
For the inspection, we recommend that you hire a licensed and insured home inspector to examine the home you’re preparing to buy to address any issues that may come up, such as any potential foundational, electrical, or plumbing concerns.
Work with your lender on any additional financing contingencies to close in a reasonable amount of time. Closing usually takes up to 30 days.
6. Sign Documents and Celebrate!
Congratulations! All the hard parts are out of the way! Now it’s time to sign documents and celebrate this achievement!
Buying a home can be stressful, but we’re here to help. Are you starting the homebuying process? If so, reach out to us and find the perfect agent for your needs today!