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Buying a house is a huge milestone. It’s a great way to invest your money, and there’s really no comparison to having a space to truly call your own. But with all the good parts comes some level of stress.
How do you get the whole process started? How much can you afford (and how do you figure that out)? What’s most important to you in a house?
It’s easy to get overwhelmed, both by the money involved and the hoops to jump through. A house is likely the most significant financial investment you’ll make. You want your money to go as far as it can. But there’s so much more to the process than just looking at houses.
To make it easier, we’ve broken the home buying process into simple steps. Use our guide to get your ducks in a row and buy a house with confidence. Keep reading!
Home Buying Process 101
The nature of the real estate market is such that you’ll likely feel like you need to make quick decisions. And yes, there are times that you’ll need to be decisive. But for the most part, try to keep a level head. And above all, don’t forget your budget.
1. Set your budget.
You can certainly daydream and look at real estate listings online without knowing how much house you can afford, but you won’t be able to search in earnest. When you’re ready to buckle down, an online mortgage calculator is a good starting point.
These convenient tools let you put in rough numbers for your income, monthly expenses, and interest rates. From that data, you’ll get an approximate figure for how much you can reasonably afford on a mortgage payment. Ultimately, that number will be finalized by your bank.
2. Secure financing.
This is the step that makes your house search official. You don’t have to take this step immediately. But if you want to be able to move quickly once you find a house you love, getting prequalified for a mortgage will give you that agility.
The traditional way to arrange mortgage financing is to head to your local bank. There are also lots of online resources to check out. Mortgage aggregator sites let you shop for financing at the best interest rate. Remember that your credit score plays a big part in all the numbers. You’re the one who will be paying the mortgage. There is no shame in pausing your house hunt to get your credit in better shape if that will help you make a better investment in the long run.
3. List your must-haves, including location.
Knowing what you want and need in a house helps you search more efficiently. And of course, having an ideal location (or two) in mind is essential. You might even try ranking the items on your list. It’s hard to find a house that ticks every box. Having a sense of what you’re willing to let go of can be helpful during the house search process.
4. Start looking at houses.
This is the fun part! Connect with a real estate agent and tour as many houses as you can. Try to keep an open mind and view listings even if you aren’t wowed by the pictures online.
5. Put in an offer.
When you find the house that’s perfect for you, it’s time to put in an offer. It feels a little scary the first time, but keep in mind that an offer is just that: an offer. And your agent will guide you through the process.
If the seller accepts your offer, congratulations! You’re on to the next step: signing a contract and starting the due diligence process. If they counter with a different offer, you’ll need to decide what you’re comfortable with. You can accept the counteroffer, negotiate with a counteroffer of your own, or walk away altogether.
6. Have the house inspected.
Once you and the seller have arrived at an offer you’re both happy with, you’ll sign a contract locking both parties into the deal. This is when the due diligence period starts.
The first thing to do is schedule the home inspection. Even if the house is being sold as-is or the seller has said they won’t pay for any inspection repairs, don’t skip this step. The inspection is the only way you’ll know the ins and outs of the house.
7. Close the deal.
As long as the inspection doesn’t reveal any major problems with the house, the final hurdle is closing the sale.
A real estate closing usually happens at an attorney’s office or your agent’s office. This is when the legal sale and purchase of the house occurs. It isn’t a quick process, and you’ll sign your name and initials on more sheets of paper than you can imagine. But at the end of it all, you’ll get the keys to your new house!
Closing on your new house means that you’re almost at the finish line. You just have one last step, and it’s a big one: Moving into your new home.
Moving is stressful. There’s just no way around it. But working with professional movers can make the whole process so much easier. And if you’re moving relatively close by, the cost of hiring movers will most likely be far less than you might think. (Plus, your sanity is worth a lot!)
Do your best to pack what you can ahead of moving day. Clearly label boxes so the movers know where to put them in your new house. Make sure medications, important documents, and anything delicate, sentimental, or irreplaceable goes in your vehicle, not the moving truck. If you have pets or small kids, see if they can spend moving day with friends or at daycare.
The day will go quickly. And you’ll still have a lot of unpacking and settling in ahead of you. But the hard part is done! Take a deep breath and enjoy your new home.