Buying your first home is an exciting yet daunting venture. Between securing financing and searching for the perfect home to finalizing the deal, the process can feel overwhelming. But, with careful planning, you can buy your dream home in these 16 steps:
Step 1: Assess Your Needs and Budget
Before looking at luxury homes, it’s important to take time to think about what you actually need in a home. Consider how many bedrooms and bathrooms you need, whether you want a garden, and whether you want an urban or suburban location. Once you have worked out what you want, you will need to set a budget so you don’t end up disappointed by visiting homes you can’t afford.
Step 2: Get Pre-Approved for a Mortgage
Getting pre-approved for a mortgage is a crucial step in the home-buying journey. Conditional offers strengthen your offer to sellers as they show your borrowing power and give you a clearer picture of what you can afford. Research and compare rates, terms, and fees offered by different lenders, including banks and mortgage lenders.
Step 3: Assemble Your Dream Team
Recruiting a qualified real estate agent who understands your requirements and the local market is key to your home-buying process running smoothly. You should also consider using a lawyer to help you through the buying process and read over any documentation.
Step 4: Hit the Ground Running
In addition to relying on your agent to send potential homes your way, you should look at listings online and attend open houses, preferably with your agent. Don’t be afraid to ask questions and take notes, as you may have to deduce the number of houses.
Step 5: Make an Offer
Another good tip for first-time buyers is to research comparable properties in the area to help determine a fair offer. Your agent can guide you through the negotiation process, aiming to secure the best possible price. Negotiating can be nerve-wracking, especially if you feel cheeky putting in a lower offer, but it always pays to try.
Step 6: Under Contract
Once your offer is accepted, you’ll enter a due diligence period. This is where you will schedule a home inspection to uncover any potential problems. You can find reliable surveys in local listings, or your real estate agent can recommend someone. If applicable, you may also want to review homeowner association (HOA) documents.
Step 7: Secure Homeowners Insurance
You must shop around for homeowners insurance to protect your investment from unforeseen circumstances. Most purchase agreements have a contingency period specifically for securing homeowners insurance. This lets you shop for the best rates and coverage before finalizing the purchase.
Step 8: The Loan Process
The next step is to provide your lender with the necessary paperwork, including pay stubs, tax returns, and bank statements. You should stay organized and meet deadlines to ensure a smooth loan approval process so your perfect house does not fall through.
Step 9: The Appraisal
The lender will then arrange for an appraisal to determine the property’s market value. An appraisal that comes in lower than the agreed-upon purchase price might require renegotiation as they may be worried about your talking out too high a mortgage and if you want to sell in the future you may lose out.
Step 10: The Home Stretch
Once your loan is approved, you’ll receive a loan estimate outlining the closing costs. You can then get to the exciting part of scheduling a final walk-through of the property to ensure everything is in order before closing the deal.
Step 11: Closing Day
On closing day, you will carefully review all final documents before signing. This is your official moment of homeownership, so a legal team should review all paperwork, as once you are here, it may be difficult to make changes.
Step 12: Celebrate
The whole process of buying a new home can be overwhelming, and you must look after yourself. You should also take a moment to celebrate this achievement. Having a place to call your own is a major milestone, whether it’s your forever home or your way of getting onto the property ladder.
Step 13: Move-In Day
Now to the fun part: moving-in day. Unpacking boxes, arranging furniture, and transforming your new house into a home is the time to make sure the home you have scrutinized for months is yours.
Step 14: First-Time Homeowner Maintenance
Now is the time to look at basic home maintenance tasks like changing air filters and checking smoke detectors. You may have made a note of the things you need to renovate or replace when you were looking around, so you now need to complete the list and set a budget for repairs and upkeep.
Step 15: Consider Homeownership Assistance Programs
Several government programs offer assistance to first-time homebuyers, particularly those with lower incomes. If you’re worried about financing your new home, there are options to explore to ease the burden.
Step 16: Welcome to Homeownership
You will always find jobs that need doing in the home, but once the work has been completed, it is time to relax a little. Enjoy the pride and satisfaction of owning your own home and planning a moving-in party.
Harvi Sadhra is the CEO of Revir Media. He has over 10 years of experience in digital media and has been featured in many of the largest media brands on topics related to finance, stocks, money, technology, and more.