Buying a home is a big decision, and for first-time buyers, it’s a nuanced one. You probably know the process ends at the closing table, but it can be confusing to navigate the start of the process if you’ve never done it before. With this home buying checklist, first-time home buyers can rest easy.
First Time Home Buying Checklist
Start With Pre-Approval
Many homebuyers put the cart in front of the horse by looking for houses before a bank has assessed their credit-worthiness. That can be a frustrating and disappointing waste of time and emotional energy, if you don’t qualify to afford the home you fall in love with.
Moreover, in today’s competitive home buying market, the house you want could be here today and gone tomorrow, before you finish with a pre-qualification.
Speaking with a lender early in the process also gets you thinking about your credit score, debt-to-income ratio and about compiling the paperwork you need to get the ball rolling. All of these things are advantageous to first time home buyers who are serious about making an offer.
Once you have a pre-approval it’s time to call your chosen Realtor.
Understand What You Can Afford
Once you know how much a bank is willing to lend you, it’s important to understand what you can afford. Consider all of your bills, your job and potential for promotion. Don’t put yourself in a situation where your loan is beyond your means.
Shop for a Neighborhood, Not a Home
Now that you know what you can spend and how much you can afford – find a neighborhood that fits your budget and desire for certain amenities. Every buyer is different.
Think about what is important to you in a neighborhood. Is it great schools? Convenient location? Serenity? Community? Rural charm?
Most regions can accommodate homes in a wide range of budgets and lifestyles, so deciding where you want to live is more important than trying to determine the physical characteristics of your dream home.
A good tip in understanding the value of a neighborhood is looking at the average price per square foot that houses in that neighborhood are selling for. That will tell you how much bang for the buck you can get.
Make an Offer
If you’ve found a house that you love, in a great neighborhood that meets your budget requirements – that’s it! It’s time to make an offer. With the help of Realtor, you can decide on your offer strategy and work through negotiations.
Generally, offers should be made in the form of a contract that specifies the rights of the buyer and seller throughout the process. It’s important to put forward a signed offer and earnest money, which is a good-faith escrow deposit that shows the buyer you are serious about the home.
Don’t Spend Too Much
What a lot of people don’t realize when they buy a home for the first time, is once you’ve initiated the buying process you want to hold on to your purse strings.
Any large expenditures could change your creditworthiness with the lender. Even if you’re excited to close on your first home, it’s important you don’t go out and open up a credit account to buy new furnishings. Wait until after the home closes whenever possible.
Buy Like a Boss
Just because you’re new at the home-buying process doesn’t mean you can’t buy like a boss, with this home buying checklist you can go forward with confidence in your decision. For more tips on how to buy or sell a home, visit us here.