9 Steps to Buying a House--or When to Do What

Inspections, assessments, agreements, and insurance: there are many components to the home-buying process. Knowing when to take which steps can be confusing for the first-time buyer.

 

Luckily you should have a real estate agent to guide you through the process. Trusting in a trained professional makes it a lot easier and much less daunting.

 

But knowing what is going to happen next can also make the process less intimidating. Here are nine major steps in the road to buying a house--and when you might expect to take each one.

 

Start out by researching listings of homes for sale in the area where you would like to live. This will give you an idea of what is available and how much homes actually cost.

 

Having a sense of what homes cost will prepare you to find a lender and apply for a mortgage on the house you will end up buying. It also makes you better informed when you walk in to meet with your agent for the first time.

 

Before you hire an agent, start looking seriously, or place a bid, you need to have a concrete idea of what you can afford to spend by the end of the negotiations. Online mortgage calculators are one place to start for a basic idea.

 

Another place to go for financial advice is the bank of lender you think you will be interested in using for your mortgage loan. It hurts nothing to go in and talk with a lender about how much you can put down and how much they would be willing to lend you.

 

Doing this financial research will make it easier for you to find a house in the right price range without the disappointment of falling in love with a place and then realizing you absolutely cannot afford it.

 

Next, seek out a real estate agent who you believe you can trust. You can start looking by soliciting recommendations from your family and friends, searching accreditation databases, and looking at online ratings and reviews.

 

Once you find someone, sit down with them to talk shop before you set out on your search. Find out what the agent can offer you, what his or her fees are, and what terms you will agree to by enlisting this agent to help you buy a house.

 

When you feel comfortable with an agent, it's time to really put the housing search in motion.

 

Once you have an agent, you can start going to see homes in your price range that you might be interested in purchasing. Your agent will have a selection of properties that are listed through her or her leasing agency, or you might find some homes listed elsewhere that you are interested in checking out.

 

The best way to know whether or not you like a house is to stop looking at pictures and start walking through the front door. Checking out actual rooms, yards, and neighborhoods will give you a feel for where you will be most comfortable, happy, and excited to live.

 

When you start imagining your furniture in the room or seeing your children playing in the yard, you can start looking at the numbers that will bring you closer to owning the home. Looks aside, also be sure to check on things like water pressure, the state of the fixtures and carpeting, and anything within or outside of the home that doesn't meet your standards.

 

By keeping in mind that you buy the house as-is, but that you might have to make some changes later on, you can also realize the greater financial picture of how much you will end up spending on the house itself and make it your own home sweet home.

After viewing homes, talking over numbers with your landlord, and securing financial backing from your mortgage lender, go ahead and place a bid. Throwing your name in the hat doesn't always mean you will get the house, but it signals how serious you are in your intent to buy the home.

 

If your bid doesn't win, you will have to keep looking and repeat the process on a different house. But if your bid is accepted, you can proceed into the finer negotiations of purchasing your home.

 

Before you seal the deal, you should get a deeper picture of what you are getting yourself into by buying the property you've just bid on. Hire a home inspector to investigate the home's overall soundness, any future maintenance issues, and any unseen issues that might affect the home's functionality and safety.

 

The point of hiring an inspection is not to negotiate a lower price on the home, but rather to know exactly what the state is of the house's foundation, interior and exterior, electrical and heating systems, roof, crawlspaces, and fixtures.

 

While the inspection will help you understand the shape of the house, it does not give you a value for the property. The next step is to hire an appraiser to come in and tell you how much the house is worth in its current state.

 

The appraisal will also let you know if the home is a good value for the price you are willing to pay, as well as give you a baseline for its value in the future as you make improvements over time.

 

The home's value and soundness are known, your mortgage lender is ready to give you a hand, and the current homeowners are about ready to start moving out: it's time for the final negotiations. Before you sign your name on the dotted line, make sure you agree to all of the terms of the sale agreement.

 

Also, make sure you stand by your initial bid, and that you are prepared to place the down payment you have promised and ensure the house as necessary. Once the deal enters escrow, there's no going back.

 

You will sit down with your real estate agent and sign the final paperwork, agreeing to all of the terms listed there. After finalizing the deal, the sale enters escrow and the lenders will pave the way for the transfer of funds, the title, and insurance.

 

After the escrow period has ended, the home is yours--as long as you keep up on your mortgage payments, of course.

Certainly, there are a few more steps and snags that will arise as the process unfolds. Every situation is different, and different real estate agents approach their sales in different ways.

 

That said, you can be sure to expect the steps above to take place at some point in the process, in roughly the same order. If you have questions or concerns, always be sure to communicate with your real estate agent to ensure that you are comfortable proceeding.