September 25, 2020
Buying a Home Checklist — Part 2
What are the steps to buying your first home?
Before you read Part 2, be sure to read “Buying a Home Checklist (Part 1)” where you’ll learn the first steps in buying a home:
- Understand your housing needs and wants
- Check your credit score
- Understand what you can afford
- Understand the true cost of home ownership
- Create your budget
- Save for a down payment
- Get preapproved for a loan
Now you’re ready to move on to the next steps.
Find the Best Real Estate Agent
Finding a great real estate agent can save you time and money. By interviewing potential real estate agents, you can better understand their knowledge of the areas you are searching. They should have a commanding knowledge of the schools, shopping, housing prices, and more. Sharing your needs and goals for your home search will allow them to tailor the search and narrow the options. It can get tedious when you waste your time visiting too many homes that aren't your style, may not be in your budget, or ultimately don’t suit your needs.
A great real estate agent can also save you lots of money by understanding the value of the neighborhood you are searching. Is the seller asking way too much? - Is this house a bargain for the neighborhood? They can often help determine if the sellers are motivated to sell, and potentially how motivated they might be to lower their price. Spend time and get the best real estate agent for your needs. It will pay off.
See Multiple Homes to Compare and Contrast
This can and should be the fun part. You can cruise the web for houses that fit your needs and style, narrow your search, work with your agent, and start visiting homes. Understand the layout of the house, the neighborhood, noise, or note any security issues. Are there enough bedrooms, bathrooms? Is the home light and airy? Now you should refer to the beginning of your checklist in understanding your housing needs and wants to make changes if necessary.
Once you've narrowed down your search, visit the potential home several times, at different times of day, and different days of the week. Understand the potential traffic patterns, steepness of the driveway, or parking needs. How does the sun hit the home at different types of the day or is rain an issue with water runoff? All of this may sound minuscule, but as you spend time in this house little things will stand out. For example, if your driveway has a steep slope, what does that mean in foul weather? Will rain, snow, or ice become a factor? Will carrying the garbage cans uphill be a chore? How much yard care if any will be needed and are you up to the task? Spend time making your choices and narrowing them down. You may also find that you are adjusting your initial housing needs and wants as you learn more over time.
Make an Offer
Once you've found the home, you'll work with your agent to understand what a good offer is. They can guide you with advice on how the comps — houses in your area — have sold for compared to asking price, and how this home might relate. Understand how hot or cold the market is. Are there lots of houses on the market that make this a "buyers’ market"? Meaning it's better for buyers as there is more supply than demand.
Once you've made an offer and negotiated a price for the home, you'll need to get a home inspection. This will have an independent inspector check the functionality of the home including electrical, plumbing, fences, roof, appliances, and more. You're likely to get an exhaustive list returned after the inspection of things that work great, and things that may need replacing or improvement. All these things can then be renegotiated with the seller or, depending on the results of the inspection, you can back out if the home isn't what you thought.
Secure your Financing
Now you're ready to apply for your loan and go through the final steps in securing your financing. There will be paperwork, credit checks, sharing of your financial documents, and income verification. You'll likely need bank statements, tax documents, and proof of income.
Closing on Your Home
You're in the home stretch and before closing on your home, you'll have the opportunity to do a final walk through. This ensures that all the necessary repairs, updates, or fixes that were agreed upon were taken care of. You can also review the condition of the home to ensure nothing has changed for the worse since you initially agreed to purchase it.
At closing, you'll need to be prepared to sign a lot of papers. These include documents about the loan, taxes, insurance, and more. Once complete you'll likely be handed the keys to your new home!