How to buy a house
So you want to buy a house and are not sure where to begin in the process? You are feeling overwhelmed with all that needs to be done. Take a deep breathe because it’s not really that overwhelming. I am going to take you through some key things to remember when buying a house to ease your mind.
Get Pre-Approval
The first thing that should be done is go get pre-approved for your mortgage loan. This will save time in the end. You will know how much you will be able to spend on the house and when you find the house of your dreams (that is in your price range) you will be able to put your offer down without a problem (if you don’t have pre-approval you might lose out on the house, someone else who is pre-approved can swoop in and take the house out from under you.)
Determine Location
Now once you know how much you can spend on your house, you want to do a little research before going out and hitting the streets looking for all those “For Sale” signs. Location is the big one. If you have or are planning on having children then you want to make sure that the school district is suitable for learning. Also, you would want to check crime rates, as you don’t want your new purchase to be in a high crime area.
The Real Estate Agent
Once you have found the perfect neighborhoods that suit your needs, find a real estate agent who specializes in those areas. It’s great if you know someone in the real estate business because you would know they would not try to pull a fast one on you. If they don’t know the area that you want to buy in, they should be able to recommend someone for you, that you will be able to trust.
Fixer-upper or move-in condition?
There are a lot of houses on the market, the next thing you would want to figure out up front is do you want a ‘fixer upper’ or something you can move right into. This will help the agent select houses for you to see. If you are handy with a jig-saw then you might want to get a ‘fixer upper’. The thing with the fixer uppers are you can essentially make them what you want. The prices will be significantly lower for the property, but you will end up spending some significant cash with the remodel.
A good way to see what is out there and figure out if you want the fixer upper or the move in house is to go to open houses. This is a great thing to do, because not only will you get an idea of what the houses look like, get questions answered by the realtor, but you can make notes about what the house costs and what you are getting for that cost.
You have your real estate agent and you are ready to hit the pavement. You should be able to give him, or her, a list of what you want in your house, the amenities (i.e. Number of bedrooms, bathrooms, garage, swimming pool, garbage disposal, dishwasher, etc.). This list will narrow down the search in finding you the perfect house.
Ask Questions
Make sure you ask a lot of them. Find out if the basement has ever flooded, when the roof was installed, age of the windows, how are the neighbors, if the neighbors have dogs (are they loud barkers) and how well is the house insulated. You can’t worry about offending here, this is an expensive purchase and you DO NOT want to be stuck with a lemon and regret the purchase.
Make a bid
Now you have found your dream house, you want to put a bid in on the house. Remember you are always able to negotiate the price. Just because they are asking one price for the house, does not mean (in most cases) that that is the final price.
Most times the seller pads the price to give a little negotiating room and still get out of it what they want. Now that doesn’t mean to ask 50K less than what they are asking.
Your real estate agent will be able to give you suggestions on what price would be fair and what to ask for. You will already know how much you can borrow for the house, and from going to open houses you should be able to see what people are asking for similar type homes. Just remember that you have to feel comfortable with the end result.
Home Inspection
The seller accepts your bid, now what? Make sure to get a home inspection. This is for your own protection. The home inspector will be able to tell you things that the current home owner might not know about the house. Such as if there are electrical problems, insulation issues, termites, etc. Once the home inspector is done they will give you a list of the things wrong with the house.
There are a few things that you can do at this step. If the house is in worse condition that you had thought you can pull out of the deal without any problems or penalties held against you. You can tell the seller to fix some of the more serious issues (ex. electrical issues) at their expense. Or if you want to fix the problems yourself, you can say that you are going to take care of them but you want the price to be lowered in order to take care of the expenses.
The final walk-through
There is now just one step before the closing and the house is yours. That is the final walk-through. This is when the house should be cleared out of all the seller’s belongings and you will get a chance to really see everything in the house. If something looks funny or something is missing that you were supposed to get as part of the deal, speak up now.
You still can get out of this deal if something isn’t up to par. If things are missing, (i.e. stove, refrigerator, window shades/drapes) and you were entitled to these things in the contract, make sure they either return to you before the closing, get your agent to renegotiate the price, or walk away.
Welcome to your new home!
Before you sign all the forms at closing, make sure you are well satisfied with everything to do with that house, because once your name is on all those forms, it’s yours and there is no turning back at that point. Buying a house is a serious investment and should not be taken lightly, but you got to have some fun with it too. You don’t want to get stressed with all the little things; you have to take the good with the bad. And if nothing else, you will get to see some pretty amazing things on all those tours.
That being said, we are sure when you come across the right house that is perfect for you, you will know. In fact, it will almost feel like destiny. The last thing to do is remember to throw one heck of a house warming!
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