Everywhere you look there are hundreds of houses, apartment buildings, office spaces, and vacant plots of land. These properties make up the larger term “real estate” and can be purchased, kept, and re-sold as long as there is a buyer and a seller. Because most people will purchase a home in their lifetime, this article will focus on the eight steps you need to know when buying your first home.
1. Know Your Budget: Before you begin to look for any homes in your neighborhood, or in the area in which you want to live, you need to know your budget. Knowing how much money you currently have in the bank, or what size of a mortgage you’re willing to sign is the first essential to the home buying process because it will determine what kind of house you can purchase.
2. Get pre-qualified: Once you know that your budget is set at $500,000 for example, you will then need to start looking for lenders to qualify you on that mortgage. This will make it easier for you to put offers on any home that is less than or equal to that price, unless of course you’re paying cash, then you can skip this step.
3. Know Your Style: Know what style of house you want. In our given example you know you can spend up to $500,000 so then what type of house can you purchase for that price? A Spanish-style house, a modern home, or a tract house is a few options.
4. Choose an Agent: Once you know how much you’re willing to spend, know that you’re qualified and understand the terms of the loan, and know the style and size of house you want, it’s time to connect with an agent to help with your search. You can do this yourself and save the 3 to 6% the agent charges for his or her services, but it’s always best to just hire an agent to do the process for you. You don’t know enough and don’t have the time to do their job.
5. Tour Properties: Once you tell them the amount, loan details, and type of house you want, it’s time for them to take you on tours to look for properties that meet your given criteria. The search may take a while or you may find your dream house on the first try, just make sure they show you a variety of homes in different areas and give you a detailed description of each.
6. Choose a House: Once you’ve toured enough homes, gotten all their details, understand the neighborhood, and know what the sellers are asking, it’s time to select one and move onto the serious part.
7. Start the Paperwork: You’ve selected a house you like and now it’s time to open escrow, collect and sign all the required paperwork, and set a closing date.
8. Close The Deal: The deal will close on the date selected, the title will be transferred to your name, the deed will get recorded into the county recorder’s office, and you will be given the keys to move into your new home.
In conclusion, in this article we discussed the eight steps you need to understand before you purchase your first home. There are many smaller steps we didn’t speak about, but these eight are the most important. The other steps are either too small for you to worry about as of now, or are for someone else to do. All you have to do is make the big decisions and sign the documents for you to purchase your first home.