Step 1: Ask yourself if you're ready.
You need to decide whether you're financially ready to buy a home. First, ask yourself some simple questions:
• Do you have a steady job and income?
• Do you plan on remaining in the same area for a few years?
• Do you live within your means, avoiding credit card debt?
Step 2: Find out what you can afford.
When you're sure you are ready to be a homeowner, it's time to determine how much house you can afford. Probably the best way to do that is to get pre-qualified for a loan. There are three options for pre-qualifying: go to a lender with whom you have already established rapport, contact your real estate agent, or research lenders online.
Your total monthly mortgage payment – principal, interest, taxes and insurance (PITI) – should not exceed 29 percent of your monthly gross income according to the U.S Department of Housing and Urban Development (HUD).
If you're a first-time home buyer, you should find a lender that offers "first-time buyer options" and financing ideas that take into consideration your personal situation. For example, many first-time buyer mortgage programs require only a low down payment or even no money down. If a down payment is required, you may be allowed to use 'gift' money from family members and other sources. Some first-time home buyer programs feature no closing costs.
Step 3: Find out what's available.
Now it's time to decide where you want to live and research what types of housing are available. You can get a head start by looking at ads and driving around the community. Once you have a general idea of what in particular you are looking for, contact your 1st Choice Realty agent.
Step 4: Choose a home and neighborhood.
Once you know the housing market, you can look at specific neighborhoods. Cruise by at night time to see whether you get a "vibe" that it's a safe neighborhood. If you have children, you will want to check out the quality of schools. To get additional information about nearby shopping, industries, restaurants, entertainment, etc. ask your real estate professional for assistance.
Step 5: Define your home and find it.
Now, you can narrow down the features you want in a home. Do you want two stories, a basement, a master bath, or a large backyard? You may not find a home with every feature you want, but this will help you define which features are most important to you.
Step 6: Do a home inspection.
HUD recommends that an offer be contingent on a home inspection. As the buyer, you are responsible for the cost of the inspection. If you're unsatisfied with the results, you may ask the seller to pay for certain repairs or to lower the price, or you may decide to walk away from the deal.
You should start interviewing home inspectors before or at the same time you begin looking at homes and working with a real estate professional and a mortgage lender.
Step 7: Shop around for homeowners insurance.
Your lender will require you to carry homeowners insurance. There are a variety of options available, so it's a good idea to search for a policy that meets your needs for protection while being easy on your pocketbook.
Step 8: Negotiate
Once you've found the house you want, you should make an offer that's lower than the seller's asking price. The seller expects this and will likely make a counter-offer. You have to decide before you start negotiating what your make or break point is, and stick to it. Just be reasonable and if working with a real estate professional, they will advise you what to offer.
Step 9: Closing
You may want to hire your own attorney to review the documents to be sure that your best interests are represented in the paperwork. However, most often your real estate professional can adequately review the closing documents and represent your best interests.
Step 10: Move In
You've done all the homework and bought a good home. Welcome home.
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