Buying

The steps to buy a house might seem complicated at first—particularly if you're a first-time home buyer dipping a toe into real estate for the very first time. Between mortgage rates, property taxes, negotiating with sellers, and closing the deal, it's easy to feel overwhelmed. There's so much at stake!

Still, if you familiarize yourself with what it takes to buy your first home beforehand, it can help you navigate the real estate market with ease.

Step 1: Start gathering a down payment

The very first step every first-time home buyer should tackle is to figure out their finances. Buying a home (particularly for the first time) requires a mortgage, where a lender fronts you the money and you pay them back over time. However, in order to get a mortgage, you'll need to put down some sort of down payment. So how much do you need? Ideally a down payment on a mortgage should be 20% of the home's price to avoid added fees, but if you don't have that much, don't worry. A mortgage down payment can be as low as 10%, 5%, or even 0% for certain types of mortgages like VA loans or a USDA loan.

Step 2: Check your credit score

In addition to having a down payment, a first-time home buyer will need a decent credit score. This three-digit number is a numerical summary of your credit report, a detailed document outlining how well you've paid off past debts like for credit cards and college student loans. A lender will check your score and report in order to estimate the odds that you will deliver your monthly payment to them, too. In turn, they will use this info to decide whether or not to loan you money, as well as how much, and at what interest rate. If a lender sees some late payments or other blemishes in your credit report, this can lower your odds of getting a loan with a great interest rate, or perhaps even jeopardize your chances of getting any loan at all. So, it's essential to know your score, and take steps now if necessary to bring it up to snuff.

Step 3: Get pre-approved for a mortgage

Before you head out home buying, you should seek pre-approval from a lender for a home loan. This is where you meet with a loan officer, ideally a few at various mortgage companies. Each mortgage lender will scrutinize your financial background—such as your debt-to-income ratio and assets—and use this info to determine whether they're willing to loan you money, and what size monthly payment you can realistically afford. This will help you target homes in your price range. And that's good, since a purchase price that's beyond your financial reach will make you sweat your mortgage payment and puts you at risk of defaulting on your loan. As a buyer, just keep in mind that mortgage pre-approval is different from mortgage pre-qualification. Pre-qualify, and you're undergoing a much simpler process that can give you a ballpark figure of what you can afford to borrow, but with no promise from the lender. Getting pre-approved is more of a pain since you'll have to provide tons of paperwork, but it's worth the trouble since it guarantees you're creditworthy and can truly buy a home. Before they even meet with a lender, one step home buyers can take to begin understanding what they can afford as a monthly mortgage payment is to plug their info into an online home affordability calculator. This will calculate the maximum amount you can afford as a monthly payment.

Step 4: Find a real estate agent

Want a trusty home-buying guide by your side? This is where we can help. As a buyer’s agent, we will help you find the right houses, negotiate a great real estate deal, and explain all the nuances of home buying along the way. The best part? Our services are free to first-time home buyers (since the seller pays the sales commission). As a Realtor®; we are members of the National Association of Realtors® and adhere to a strict code of ethics.

Step 5: Go home buying!

This is the fun part! As a buyer, you can peruse thousands of real estate listings on sites such as ours, then ask your agent to set up appointments to see your favorites in person. Since the sheer number of homes can become overwhelming, it's best to separate your must-haves from those features you'd like, but don't really need. Do you really want a new home or do you prefer a fixer-upper? Make a list of your wants and needs to get started, and whittle down your options.

Step 6: Make an offer

Found your dream home? Then it's time to make an offer to the seller.

Step 7: Get a home inspection

A home inspection is where you hire a home inspector to check out the house from top to bottom to determine if there are any problems with it that might make you think twice about moving forward. Think: termites, faulty foundation, mold, asbestos, etc. Sure, a lot can go wrong, but rest assured that most problems are fixable. Again, we can help in finding an inspector you can trust.

Step 8: Get a home appraisal

Even if you got pre-approved for your home loan, your lender will want to conduct a home appraisal. This is where they check out the house to make sure it's a good investment. It's similar to a home inspection, but for your lender.

Step 9: Head to closing

Closing, which in different parts of the country is also known as “settlement” or “escrow,” brings together a variety of parties who are part of the real estate transaction, including the buyer, seller, mortgage representative, and others.
Closing is the day you officially get the keys to your new home—and pay all the various parties involved. That will include your down payment for your loan, plus closing costs, the extra fees you pay to process your loan. Closing costs can be sizable, averaging anywhere from 2% to 7% of the home price.

Step 10: Move in!

Done with closing? Got your loan? Congratulations, you've officially graduated from a buyer to a homeowner! See, the home-buying process wasn't so scary after all, right? We can help guide you through this process with as little as making the contact with us today!