How to Prepare to Buy a House: 5 Crucial Steps
Purchasing a home is a significant move. You’ve probably saved for years and have been dreaming about the dream home for a long time. Depending on how you go about it, it can either be your most significant accomplishment or the biggest mistake. This is especially true for high-value houses.
The best-prepared house hunters/ buyers get the best homes at the best prices. So what do you need to do to ensure you go about it correctly? In this article, we’ll discuss all the steps and mistakes to avoid when purchasing a house.
Preparing to Buy a House in 5 Crucial Steps
When buying a house, it’s crucial to follow all the proper steps to avoid legal issues. The five most important steps are:
1. Get Your Finances in Order
By the time you are done with the purchasing process, you’ll get to know your finances in and out, especially if you are getting a mortgage from a bank. Understanding your financial process earlier helps select houses to view in your range and makes the process much easier.
The first thing to consider is your credit score since it will affect the amount you can get from the bank to purchase your house. Before getting the house, you must also know the upfront cost, like the required deposit. Other additional costs you need to be aware of include home inspection, down payment, and closing costs.
2. Weigh Your Mortgage Options
Before you purchase a house, you need to know the mortgage options available. The best way to do this is by speaking to all mortgage lenders and considering their interests. Your realtor may also come in handy since they know the best mortgage options.
The next step is getting approved and pre-qualified. This gives you the confirmation, in writing, that the lender has agreed on the loan type and amount you can receive from them.
3. Find Your New Home
After completing all the steps above, it’s time to find your new home. Go for viewing in the location you want to live and view all the homes that meet your taste. You can then narrow down your preferred home using the help of your realtor. Keep in mind that you will likely live in that house for a long time, so ensure it has all of the features and appliances you need to be comfortable.
4. Make an Offer
If you have already decided on a house and received the mortgage, it’s time to make an offer. Your realtor will submit your purchase offer to the seller and their agent, and they can review it and accept or decline. Once they accept, it’s time to get the inspections, appraisal, and other requirements stated in the contract.
After the offer has been accepted and all the requirements in the contract are met, it’s time to close. A successful closing requires all the players to come together with the figures to match and sign the transfer contract. Once the closing has been done successfully, you get to be the house’s new owner.
The 5 Things to Consider Before Buying a House
Moving into your dream home comes with a lot of satisfaction which is why you need to ensure it meets most, if not all, of your needs and specifications. To do this, you need to consider the following factors:
Size includes the actual size of the house, the number of rooms and their dimensions, and the size of the property. The size of your property influences many aspects of your home, including your privacy and the number of vehicles that can be parked at any particular time. It also affects your ability to host gatherings.
Most real estate agents will tell you that location is one of the most vital aspects to consider when purchasing a house. It will determine the resale value of your house and accessibility to good schools, banks, and grocery stores. You will also want to ensure that the house is close to your place of work to avoid the long commute to work daily.
Every neighborhood has its defining feature and what it’s known for. Let your realtor know the kind of neighborhood you want to live in to narrow down the selection. You can also type in the address of a community/neighborhood in the search engine and read up on recent events and news in the area. Google maps also enable you to see pictures of the streets and establishments in the area, which lets you get a better feel of the place.
4. Your Lifestyle Needs
You need to plan for the future when purchasing a house. Ask yourself whether the house would still be a favorable investment in the future. Can you convert the extra space into a gym or office? Does your neighborhood HOA allow you to convert your house into an Airbnb? All these are questions you need to ask before purchasing a house. You should present the realtor with a list of non-negotiables to avoid issues in the future.
5. Age and Condition of the House
As a potential homeowner, you need to have a preference for the home you want. Some people prefer houses with older designs while others prefer a more modern one. The age of the house will matter a lot, especially if you are looking for a house with features made in past eras, like stained glass.
You can use the building codes to determine how houses were built at particular times. This will help you determine the condition and potential lifespan of the house before making a purchase.
The 3 Mistakes to Avoid When Buying a House
Buying a house is no longer shrouded in mystery, thanks to the internet. However, despite all the information, there are several common traps people fall into. They include:
1. Concentrating on the Superficial Aspects Only
Failing to do a more intensive viewing of the house you are purchasing is a terrible mistake that many people make. You need to make a list of all the things you should check when viewing each house, including the walls, mold in bathrooms and kitchens, window frames, water leaks, and electric switches and sockets.
2. Ignorance of the Current Housing Climate
Markets are fluid and ever-changing, so you must always be aware of their current state. The market climate can determine how you should act and the right time to buy a house with the lowest interest rate if you pay attention to it.
Having the right information will help you make better and quicker decisions. People who go blindly into purchasing a house often pay higher mortgages and make terrible choices on the purchase in general.
3. Avoiding the Math
The most crucial step when purchasing a house is calculating all the costs involved, including tax and interest on the mortgage. While this step seems obvious, many people ignore it or do it half-heartedly, leaving them facing many financial shocks later on. The other common mistake most people make is concentrating on the purchase price and deposit only.
Buying a house is one of the biggest investments you’ll ever make. It’s a financial and emotional investment since you’ll spend most of your time and create new memories there. The good news is that purchasing a home has never been simpler, especially when you have all the information you need. Following the steps and advice above will save you a lot of stress and heartache and be ahead of other potential home buyers.
Featured Image Credit: TierraMallorca, Pixabay