Buying a home is most likely the biggest investment you’ll make. If you want to get the best value for your money and avoid common pitfalls, check out these seven steps for buying a house.
1. Get an Agent to Represent You When Buying a Home
Look for a real estate professional, more commonly known as a buyer’s agent, to represent you during the process. They will show you homes based on criteria you specify, sometimes even before they are listed online. It is the agent’s responsibility to represent you in any negotiations.
2. When Buying a Home, Make a List of Wants and Needs
Make a list of what each family member wants and needs in a home. Examples may include a big kitchen, being a certain distance from work or school, or a certain number of bedrooms and bathrooms. You should then narrow down your list to a few “must-have” needed features and consider the rest to be preferences. Keep in mind that the longer your list of needs, the more difficult it can be for you or your agent to find a home.
3. Get Pre-Approved for a Mortgage
To avoid falling in love with a house you can’t afford, get a pre-approved mortgage before you begin shopping. This process gives you an idea of the price of the home you will be looking for based on your savings, finances, and credit score. You also become a more serious buyer when the seller knows that you have been pre-approved and won’t be wasting their time.
4. Don’t Take on a Mortgage That is More Than One-Third of Your Income
Instead of buying a home based on the maximum that your lender says you can afford, limit your mortgage payment to a third of your take-home pay. Owning a home includes expenses that you may not know about if you’ve been renting all your life.
These expenses may include homeowner association dues, homeowners insurance, maintaining the lawn, and unexpected costs like repairing a busted water pipe or needing new appliances. The less you spend on the mortgage, the more you’ll have for other expenses around the house.
5. Offer Only What the House is Worth
Determining the worth of a property is something that your buyer’s agent will help you with. Don’t overpay for a home that isn’t worth the money. On the other hand, don’t offer too little for a house, especially if it’s just been put on the market, because another buyer may make a more reasonable offer.
6. Don’t Forget That There are Many Houses Available
If you’re unsuccessful in buying a home on the first try, don’t worry. There are new houses being listed for sale every day. Be patient; a better home for your family may be on the market soon.
7. Before Buying a Home, Have it Inspected
Before you finalize buying a home, have your investment thoroughly examined by a professional home inspector. The home inspection report may reveal problems in the home that you can negotiate with the owner to repair or else adjust the sale price accordingly.