Some first-time home buyers are naive. Overly optimistic, they think nothing could possible go wrong. If a home has a few problems, they view them as easy fixes and are unrealistic when it comes to the cost and time it takes to fix up the home. Some naive buyers will move to a neighborhood on the wrong side of town, forgetting that you can fix up a house, but you can't change your neighborhood or location without moving.
You'll want to know in advance that you likely qualify for a home loan, and that's where a credit check can prove invaluable when you buy a house. Your credit check will track your financial health using data from the three primary credit reporting agencies -- Equifax, TransUnion and Experian. Your credit score from each agency can range anywhere from 350 to 800. The higher the credit score, the more likely you'll be granted a home loan, and the more likely you'll pay a lower interest rate when securing a home mortgage (that's because a high credit score will be viewed by a mortgage lender as a lower-risk loan proposition). In your run-up to your credit check, avoid taking out any loans or credit -- that will raise your credit risk level in the eyes of lenders -- and make sure you pay down any debt owed, and ensure you've got a good track record of paying your bills on time.

Many realtors will not spend time with clients who haven't clarified how much they can afford to spend. And in most instances, sellers will not even entertain an offer that’s not accompanied with a mortgage pre-approval. That's why – if you don't have all cash (how many first-time buyers do do?) – your next step is talking to a lender and/or mortgage broker.


Preapproval is the second step in the mortgage process. You complete a mortgage application and provide detailed information to the lender (although you will not yet have a house picked out most likely, so the property information can be left blank). The lender will approve you for a specific amount and you will get a better idea of your interest rate. This puts you at an advantage with a seller because the seller will know you’re one step closer to getting a mortgage.

Once you’ve made sure the property is in the agreed-upon condition, you’ll set a date to meet with the required parties. Different areas have different requirements as to who must be present, so you might meet one or all of the following: the escrow or closing agent, the attorney — who could also be the escrow agent, someone from the title company, the mortgage lender, and the real estate agents.
Your mortgage lender will also be working on the underwriting for the loan, including an appraisal of the property to ensure the purchase price matches its value, based on other sales of similar properties in the area. If the appraiser determines the house isn’t valued at the agreed-upon sale price, you may have to come up with cash to make up the difference, or try to negotiate the price down with the seller. You'll likely have to provide updated proof of income, details on your existing debts and assets, information about your tax return and, of course, the address of the property you're buying along with the price of the house and amount you'd like to borrow.
A pest inspection is separate from the home inspection and involves a specialist making sure that your home does not have any wood-destroying insects, like termites or carpenter ants. The pest problem can be devastating for properties made primarily of wooden material, and many mortgage companies mandate that even minor pest issues be fixed before you can close the deal. Even a small infestation can spread and become very destructive and expensive to fix. Wood-destroying pests can be eliminated, but you'll want to make sure the issue can be resolved for a cost you find reasonable (or for a cost the seller is willing and able to pay) before you complete the purchase of the home. Pest inspections are legally required in some states and optional in others.
8. Secure a loan. Now call your mortgage broker or lender and move quickly to agree on terms, if you have not already done so. This is when you decide whether to go with the fixed rate or adjustable rate mortgage and whether to pay points. Expect to pay $50 to $75 for a credit check at this point, and another $150, on average to $300 for an appraisal of the home. Most other fees will be due at the closing.
Homeowners insurance and property taxes very based on your geographic location. Florida has notoriously high homeowner's insurance rates, where they average $161.08 per month. In Idaho and Wisconsin, rates are a bit lower, averaging below $50 per month, according to Value Penguin. Property taxes average higher in New Jersey, New Hampshire, Texas and Wisconsin and they're lower in Louisiana, Hawaii, and Alabama.
The home buying process can take anywhere from one month to a few years, depending on the unique experience and expectations of the home buyer. On average, a home buyer can spend one to two months searching listings, several weeks to negotiate and close a deal, and then make the first mortgage payment several weeks after that. With these variations in mind, a home buyer can realistically expect for the home buying process to take roughly three months.
All too often it feels like the problems in a home have a snowballing effect, but you don’t have to go broke tackling them all at once. “Day one, [homeowners] won’t have to tackle all those projects,” Hunter says. “They can use the list of items found by the home inspector as a checklist and prioritize the items on that list and create a budget.” You should immediately address those problems that create a health or safety issue, such as a broken step or leak in your roof that could lead to mold. But replacing an older dishwasher can wait until next year, when you have more room in your home repair budget.

Before you even look at a single property, you need to know exactly how much you can afford. There are several online calculator tools you can use, but these tools are only estimates. Use these tools as a guide, but then adjust the amount based on your individual situation. How much is your current rent payment? Did you meet that payment each month with ease, or was it a bit of a struggle each month? The payment you can afford right now is a good indicator of what you'll be able to afford in your new home.
All too often it feels like the problems in a home have a snowballing effect, but you don’t have to go broke tackling them all at once. “Day one, [homeowners] won’t have to tackle all those projects,” Hunter says. “They can use the list of items found by the home inspector as a checklist and prioritize the items on that list and create a budget.” You should immediately address those problems that create a health or safety issue, such as a broken step or leak in your roof that could lead to mold. But replacing an older dishwasher can wait until next year, when you have more room in your home repair budget.
This person will be your lifeline through the process. Not so long ago, people didn’t have much to go on when selecting an agent. A postcard in the mail or a name on a sign might have been all you had to consider if you didn’t have a personal referral. But now it’s a breeze to check reviews online. Go ahead and meet with a few agents and ask some questions. Your agent is your chief advocate, confidante and hand-holder in the process so you want to find a good fit.
Pride of ownership is the number one reason why people yearn to own their home. It means you can paint the walls any color you desire, turn your music up, attach permanent fixtures, and decorate your home according to your own taste. Home ownership gives you and your family a sense of stability and security. It's making an investment in your future.
Homeownership is one of the core concepts of the American Dream. When a person is ready to make that dream a reality there are certain steps to buying a home that must be followed. These steps ensure that the person is prepared to actually own his or her own home, that the right location and home are selected, and that the actual purchase of the house proceeds with as few problems as possible. The process of buying a house can be complicated, even for those who have previously owned a home. The following guide will help navigate home buyers through the necessary steps.
Once the property enters escrow, the purchase should be contingent upon it passing a home inspection. Once your offer is accepted, arrange to have an inspector visit the property and identify anything that needs to be fixed. Both you and the seller should receive a copy of the inspection report, after which you can renegotiate with the seller in case anything needs to be fixed. In worst cases, the contingency also protects you in the event that you would like to withdraw your offer.
Owing to the high costs, property purchase often remains once-in-a-lifetime activity for many individuals. It may seem like the closing process is a lot of complex work, it is worth the time and effort to get things right instead of hurrying up and signing a deal that you don’t understand. Be wary of the pressure created to close the deal fast by the involved agents and entities who are there to help you for their cut, but may not be really responsible for the problems you may face in the long run from a bad deal.
Getting prequalified is the first step in the mortgage process (it’s usually pretty simple). You give your lender your overall financial picture, the lender evaluates your information, and then the lender gives you an idea of the mortgage amount that you will qualify for. Note, that prequalification is not a done deal – you may not in fact qualify for the loan for which you are preapproved (it’s a general idea).
To find someone, interview several buyers' agents—this means they exclusively represent you, and not the seller, as well—until you identify someone who understands your needs and makes you feel comfortable. As a final step, check your state's real estate licensing board's website to ensure they're registered, and don't have any complaints or suspensions logged against them.
The winning bid isn’t always about price – the seller wants to feel confident about the entire transaction at the end of the day. If your bid includes your preapproval letter as opposed to a competing buyer’s prequalification, or you’re willing to let the seller take a little more time to move out, your offer might be the package the seller chooses.
And, sure, Jarvis is speaking from the perspective of an agent who has often been close to a sale, only to have a well-meaning relative sabotage it. But chances are, if you start talking to friends who are homebuyers, they'll tell you stories of how a parent or in-law once talked you out of buying a home, and how ever since they've wistfully wondered if they made the right decision.
Once you’ve made sure the property is in the agreed-upon condition, you’ll set a date to meet with the required parties. Different areas have different requirements as to who must be present, so you might meet one or all of the following: the escrow or closing agent, the attorney — who could also be the escrow agent, someone from the title company, the mortgage lender, and the real estate agents.
×