Buying a home for the first time seems to involve a lot of steps and, truthfully, they can get quite confusing. If you’re buying a home for the first time, here is a handy step-by-step guide to help you navigate one of the most important and significant purchases of your life.
Step 1: Budget
The process of buying a home should start long before you look at listings or even mortgage options. It should start with your credit and budget. Carefully look at all your finances and revenue streams. Determine what you consider to be a reasonable monthly payment for your mortgage and then look at your debts. Start building good credit early in life by paying your bills on time and making smart financial decisions. This is also the time when you need to start saving up a down payment. The more money, the better.
Step 2: Consider Mortgage Options
Pre-approval is the best way to buy a home and that involves weighing your mortgage options. While many people simply go through their bank, be sure to check out multiple options and weigh what people will give you. This means looking at interest rates, incentives for first-time buyers, the options to pay down the principle faster, and more. Weigh all of these options together and go for the best financial option. Be aware that the institution that offers you the most money for a mortgage is probably the least likely to offer you a sound mortgage as well. They’ll make any risk back in interest.
Step 3: Get a Realtor
Buying your first home requires expert advice, access to the right listings, and insider knowledge. That’s why you need a realtor. Look for a real estate agent with experience and knowledge of the neighbourhoods where you want to live and listen carefully (and critically) to their advice.
Step 4: Find a Lawyer
That’s right, you need a lawyer for a home purchase. Bidding wars are common occurrences and it never hurts to have a specialty real estate lawyer look into what you’re doing. Lawyers can also go over the records and outstanding taxes, etc. on a property so that you’ll have far less surprises.
Step 5: Make a Checklist
Looking for a home should start not online or a real estate listings guide, but with a pen and paper. Make a checklist of the things you absolutely need, the things you want, and the things you wish for. Rank them according to urgency and carefully consider all of the things you want. By making a ranked list of priorities, you can find something that matches most. Since you won’t find a property that matches everything you want, especially in your first home, the list can help you get a good investment and purchase.
Step 6: Start the Hunt
With your checklist in hand, it’s time to start looking for homes. This is where your real estate agent becomes a huge help, taking you to properties that match your exact specifications. Be sure to take a good look around the home and ensure that it’s what they claim it to be. And don’t be afraid of looking at multiple places, even within the same day, to get a feel for what’s out there.
Step 7: Make an Offer
When you find the right property, now’s the time to make an offer. Your agent will officially deliver the offer to purchase, which will include a price, conditions, deposit and closing date. The seller will accept, reject, or counter, and the process will continue until an agreement is made or you move on to something else. Be sure to include a home inspection as a condition on the purchase, and have a proper home inspector do the inspection.
Step 8: Finalize the Deal
The last thing to do is get everything finalized, which will probably include a visit to your lawyer. Make sure your insurance, warranties, and everything else is in place. Then, it’s time to prepare moving and enjoying your new home.