Buying a house is a significant investment. You will probably live in the home for a long time. The process can be time-consuming and confusing. If you are wondering how to buy a house, here are some steps you can take to complete the transaction successfully.
How to Buy a House
Step 1: Make a List of Your Wants and Needs
Before you can go out and look for a house, you need to determine what you want and need in a home. How many bedrooms do you need? How many bathrooms do you want? Do you want a basement? Are you willing to do some work, or should the home be move-in ready? Do you have pets and kids that will need a yard? If you don’t have any now, will you in the future?
A list of what you want and need in your home will give you things to look for when you start house hunting. Keep in mind that you probably won’t get everything on your list, so decide what you are willing to compromise on and what you aren’t.
Step 2: Secure Financing
Getting prequalified for a home loan will let you know how much the bank is willing to lend you. You may have dreams of owning a 5 bedroom house on 10 acres, but if you don’t qualify for that much, you’ll have to look for something else.
Talk to your local bank or credit union to find a loan. You can compare interest rates and fees to find a plan that works best for you.
You don’t want to make a monthly mortgage payment more than one-third of your take-home pay. The bank may offer you more, and it may be tempting to take it. If you can’t afford the payments, you risk getting foreclosed on.
You’ll also need to factor in how much you’ll have to pay in utility bills, insurance, and property taxes. If you have car payments and other expenses, this will also figure into how much you can afford each month. As a new homeowner, you’ll want to set aside money for maintenance and repair costs. Determine what price range you are comfortable with for your monthly mortgage payment.
Step 3: How to Buy a House With a Buyer’s Agent
Once you have financing and your wants and needs in place, then it’s time to find a buyer’s agent. They will help you find the house that will work for you and guide you through the whole transaction process. You can start your search by asking family and friends for recommendations. Then, you can look online. Read online reviews and choose several agents to speak to before deciding on one.
Step 4: Look for Houses
Once you have hired a buyer’s real estate agent, start looking at houses. You might find one that you love immediately or it may take some time. When you find a house that meets most of your wants and needs, put in a reasonable offer. Your agent will be able to help you with this. The seller may or may not accept the offer. If they don’t accept the offer they will usually send you a counter offer. Your agent will help you navigate these negotiations.
Step 5: Get a Home Inspection
Once the seller has accepted your offer, get the house inspected by a professional home inspector. This will protect you from making a bad investment that could wind up costing you unexpectedly as a homeowner.
When you are planning to buy a house, these are some steps you should take to complete the process wisely and responsibly.