The 10 Steps to Buying Your First Home

April 25, 2017

The 10 Steps to Buying Your First Home

Buying your first home is an exciting milestone event. It’s complicated and can be a lengthy process, but it’s well worth it in the end. As you embark on this adventure, consider these 10 steps to first-time home ownership:

  1. Determine how much house you can afford: Generally, lenders encourage buyers to limit the cost of their home to no more than three to five times their annual household income. Anticipate that you’ll be expected to pay approximately 20 percent of the purchase price as a down payment on the home. And, realize that your mortgage payments will be in addition to any other debt you have accrued.
  2. Select an agency: Working with a real estate agency will save you a lot of headaches and mistakes. Choose an agency who specializes in the kind of property you’re looking for and will know the market well.
  3. Tend to your finances: Start saving money and make strong attempts to pay down your debt. Review your credit report and fix any errors. Consult with a lender to get prequalified and, eventually, preapproved for a loan. This process will also let you know how much money you will be able to borrow from a bank.
  4. Shop around: Go visit lots of homes that are within your price range. Keep an open mind as you view properties, realizing that updates and remodels are always possible.
  5. Make an offer on the best option: It may take awhile, but you’ll eventually find a home that seems like a good fit. Work with your real estate agent to put in an offer.
  6. Request a home inspection: The inspection will reveal details about the structure that might not be readily identified with a simple showing. An inspection may prevent you from making a big investment in a home with lots of problems.
  7. Work to select a loan: Together, with your mortgage banker, compare the elements of various loans. Weigh the pros and cons and make a decision.
  8. Get a home appraisal: The appraisal is typically completed by a third party and ensures that you are paying a fair price for the property.
  9. Negotiate: Many contracts have several negotiations that transpire before everyone signs on the dotted lines. Factors may include price, move in dates, items to be fixed and other details.
  10. Close the deal: After all negotiations are complete, it’s time to close the deal and purchase the home. A closing meeting will be held where all parties come together one last time to complete all paperwork.

The home-buying process is a somewhat complicated one that may take several weeks or months. Let Pro-X Realty guide you through your purchase of a new home.