How to Start when Buying a House
The Home Buying Process
In the United States in 1970, if you wanted to buy a house, you would have to go to the town to which you would be moving and contact the various real estate companies in that town to see houses. Information was not shared between agencies. Today, we click a button on our computer and see as many houses as we would like, anywhere in the world, and walk through all that we are interested in using one Realtor. Times have changed!
How to start buying a house is about the process, step-by-step.
The Right Neighborhood
Find a Realtor
When you feel you are ready to buy:
- Talk with a mortgage lender. When someone checks your credit, that process will cause your credit rate to decline slightly. You can, however, have it checked by several lenders in the same month and have it affect your credit only once, since it will all be for the same purpose: finding a lender. This is why you shouldn't begin the process until you are ready to actually buy. Check lending fees and costs of loan origination for each lender. Besides, a rate can only be locked-in for you for about a month.
- In today's market you will need a pre-approval letter before your offer on a house will be accepted. This is a second reason to find a lender first.
- Now that you know what you can afford, start looking for houses you can afford. Find out in which neighborhoods you can afford to live. In which neighborhoods are your most affordable housing options? Pick one or two favorite neighborhoods from what you can afford.
- Once you know where you would like to live, decide what type of house you would like. Do you want a one-story or a two-story? Must your home have a yard? Do you need a garage? Using the Internet, you should be able to locate houses you can afford in neighborhoods you've chosen. You may not be able to get everything on your list. What compromises are you willing to make?
- Now, you know how to start, what you can afford, what your house should look like, and where you want to live. It's time to find a Realtor. If you have a company you prefer to work with, go to the broker or office manager and tell her you would like to interview three agents. The manager will have a tendency to choose the most experienced, but busy salespeople don't want to spend too much time shopping with you. A new agent might work out better, but only if that agent is getting sufficient support from someone more experienced. Regardless if you go to one agency or several, it will be beneficial to interview several agents before making a choice, so don't sign anything that commits you to one agency until you are sure.
- Buying a House: The rest of the process should be familiar to the Realtor who should guide you. You look at houses; you make an offer; get a contract; you do an inspection; notify your lender who draws up an HUD truth in lending document; get hazard insurance; look at the survey; gather your money; then, go to closing.
Good Time to Buy
Now is a good time to buy because there are lots of bargains due to foreclosures. Prices have dropped. If you choose to go for a bargain foreclosure, be aware that you may not be able to get out of your contract after an inspection is done. Foreclosures are usually sold "as is." You can walk away from buying an "as is" sale before closing, but you will lose all of your down payment. Keep that in mind when you are shopping and make a good choice.
Follow the steps above in Buying a Home: How to Start, and use this information to help you make informed decisions. Happy shopping!
- How to Choose a Home that Meets Your Family's Needs. Buyers often told me, "I want a house in the country," but bought in the city, or, "I want a one-story" but bought a two-story. Here are some things to get you to thinking about what will really work for you before you shop.
- Organizing Your Home when You Move. Having an organization plan before you start unpacking boxes in your new home will make life much easier for you and your family.
- Sell Your Home with the Right Realtor. Don't dismiss the importance of finding a good Realtor. A real estate license alone does not make the difference.
- Air Conditioning and Heating Services: Best Options and How to Get Them Too many heating and cooling companies can take advantage of you and steal your money because we average homeowners don't know much about the business. Learn ways to keep $$$ in your pocket by choosing the right company/technician.
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