Ten Step Guide To Buying Your First Home

June 19, 2010

Buying your first home can be very exciting and perhaps even overwhelming. There are many things you need to know before you take the plunge of homeownership. Buying a home will depend on real estate laws and customs where you’re located but there are basic steps that each first homebuyer needs to know.

Step 1 - Know your credit history

Establishing credit is very important especially when you are looking to buy a large investment like a home. Your credit report reflects how you manage your finances. Study your credit report and your financial history so you’re familiar with it before applying for a mortgage. These reports will be needed for the mortgage approval process to find out the interest rate and other loan terms.

Step 2 - Get familiar with the Mortgage Industry

Do your research. Finding the right loan and lender is extremely important to your home buying success.
Choose the lender that is best for your needs but be sure to understand the loan process as much as you can before talking to a lender so you don’t feel absolutely lost.

Step 3 - Try to get pre-approved

Once you speak with a lender, you should be given an estimate of how much you can afford for a home. Being pre-approved can help you in a variety of ways. If a home seller gets two offers, one being yours with a pre-approved letter from your bank saying you’ve been approved for the amount offered, and then there is the other person with no letter, your chances of getting the home are much better.

Step 4 - Determine your “wants” and your “needs”

Buying a home isn’t as challenging as most think. If you familiarize yourself with the real estate market and narrow down what you want and need before buying home the process will run a lot smoother. Be sure to understand agent duties and devotion because some real estate agents represent buyers, sellers, or both or depending on the say they have the ability to work as neutral facilitators for either party.

Step 5 - Begin the search for your new home

Your agent will most likely give you multiple listing sheets to review. You might have also picked up a real estate magazine in your area and found a home through that. Also try shopping online or find ads in the newspaper. Other ideas can be as simple as driving around the neighborhoods that you would like to live in that have houses for sale.

Step 6 - Narrow your search criteria

When looking at houses be sure to look at its structure and features which can help determine if its something you want or not. Try to make a list of what you want in a home and things you do not so you can narrow down your list of homes you might want to purchase.

Step 7 - Make an offer

There is no one set of rules when it comes to putting in your offer on a home. Don’t seem over eager when you make your offer. Speak with your agent for advice on what you should offer based on what houses are selling for in the area. Your agent should be able to find comparable houses for you to make a suitable offer. Never over pay for a home. There are plenty to go around.

Step 8 - Get the home inspected

Some says allow home inspections before the final contract is signed where as in other says inspections take place after the contract is signed. If you have an agent ask them when an inspection should happen and if additional types of testing are needed for a specific area. Be sure to also discuss the findings of an inspection with your agent and get their view on the inspection.

Step 9 - Avoid any last minute problems

As the closing date approaches, everyone involved in your real estate transaction should be checking the progress on a daily basis. That way if a problem arises it can be taken care of right away. Delays due to last minute problems can cost time and money.

Step 10 - Closing

Once the closing is here everything should be ready for the transfer of ownership of the property from the last owner to you.

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