Most people think of buying their dream home, but hesitate because it can be a really daunting task when not handled properly. This is more so for the first time home buyer. However, it need not be so at all. Like any other important undertaking buying a house is a step by step process. No one can stop you from going about it randomly, but you will have only yourself to blame for complicating things unnecessarily. If you are a first time home buyer and follow the step by step process described below, you can be sure that the whole experience will be quite enjoyable and enlightening. Who knows, you might even turn out to be a good real estate investor if you catch the real estate investment bug. Although the real estate market is down in the dumps now, it will surely bounce back because housing is one of the basic human needs.
Step #1. In the home buying process you have to prepare yourself both mentally and financially for buying a home. If you are like most people you will need a home loan. Taking a loan entails a down payment, closing costs, monthly mortgage payments, maintenance costs, etc. You should be able to afford these so that you will not default and face foreclosure. So once you make up your mind to have a home of your own you should put your finances in order. Sit with your spouse and find out how you can cut your credit card bills and other expenses, so that you are left with a comfortable surplus. Make a budget and start working it out. If you have problems in coming up with a down payment you can take the help of your state housing finance authority.
Step #2. The next important step is to get a good credit score. Many people make the mistake of making large purchases, like an expensive car, before buying a house, and this has the effect of pulling down their credit score. If your credit score is not good you must make efforts to get your credit score up. This will help you to save thousands of dollars when you buy a house in terms of down payment as well as lower interest rates. It will also determine the amount of loan you will qualify for.
Step #3. Once you have a budget in place and your credit score is good enough, you must get yourself pre-qualified for a home loan. You must meet a number of lenders to find out the best deals available and what best suits you. It is very important that the lenders fully understand and appreciate your home buying goals and your present financial status. You should not hide any details of your finances from the lender and promptly supply all the documents asked for. All this will help you to get pre-qualified for a loan at the best possible terms. The advantage of getting pre-qualified is that it is as good as having cash in hand. You can enter into discussions and negotiations confidently, because you know what you want as well as how much you can afford.
Step #4. Home buying is a specialized job. It involves and requires thorough knowledge about market conditions, taxes, legalities, documentation, inspection, local regulations and a lot of other things. To go through all of these smoothly you will need the help of a trained, licensed and well experienced real estate agent. A good real estate agent will help fill up the gaps in you knowledge and experience. He/she will act as a buffer and cut out a lot of guess work and legwork so that you are presented only with the most suitable homes for sale. You must talk to a few real estate agents and look for good references before selecting the one most suited for your purposes. You will benefit from the local knowledge and networking of your real estate agent.
Step #5. Now that you have narrowed down your choice to a few homes to buy, you need to conduct a thorough inspection. It is natural that sellers will try to play down any defects or shortcomings. Home inspection requires specialized knowledge and you should hire a certified home inspector for this purpose. The home inspector should be experienced and accredited to one of the professional bodies like the American Society of Home Inspectors and the National Association of Home Inspectors.. You should conduct a thorough inspection of the house you intend to buy along with the inspector. Things like structural defects, wiring, heating, air conditioning, ducting, fire safety equipments, plumbing, seepage, mold and termite attacks should be thoroughly inspected.
Step #6. Once you have finalized the choice of a home you are ready for closing. You will need the services of a real estate attorney at the time of closing as you will be signing a lot of legal documents relating to the purchase as well as financing and insurance.. The attorney will make sure that you understand the fine print, and the legalities involved are taken care of, before you sign on the dotted line. This is a very important step because legal problems tend to crop up long after closing and can lead to long drawn and costly court cases. Your attorney will make sure that all the legal aspects are fully covered.
If you follow the above steps diligently you will have an enjoyable time buying a home and have a good learning experience in the process. You will be saved from the usual anxieties and hassles of home buying that come from going about it in a random manner. Although the above steps have been recommended for the first time home buyer, they will benefit the experienced home buyer as well, being the standard steps to be followed for home buying.