How to buy a new house? In a nutshell, all you need to do is find a property, finalize an offer, get a loan, coordinate the paperwork, and close the deal.
Well, it isn’t that simple. If you’re wondering how long does it take to buy a house, it takes at least 30-45 days. The process is often cumbersome and involves visiting multiple properties, getting approved for mortgage credit, and going through bulky paperwork.
Here’s a step by step guide to buying a house that will make the entire process quicker and easier for you.
Start your research
First things first, start your research and start it early. You should know how long does it take to buy a house and how much money do you need to buy a house. Start looking on listing sites, magazines, and newspapers, and make a note of particular homes you’re interested in. If you have a preferred area, look for houses in that specific area.
Determine how much money do you need to buy a house
Before starting your search, ask this to yourself, “How much money do I need to buy a house?” Or, more importantly, how much can you afford. The general advice is to look for homes that cost no more than three to five times your annual income, considering that you’re planning to make a 20% down payment. So, if you make $40,000 a year, don’t go for a house more expensive than $150,000-200,000.
However, you should make this decision based on your financial situation. If you have a lot of debt, looking for a less expensive house would be a better option. Or, if you’re generating side income from another source, you can opt for a costlier property.
How you buy a house: Get preapproved for mortgage credit
Before you start looking for a home, you’ll need to determine how much you can actually spend. The best way you can do this is by getting prequalified for a mortgage. In order to get prequalified, you’ll need to get in touch with your mortgage banker and provide him some financial information, such as:
- Your income
- Your savings
- Your investments
- Your debts
The lender will review this information and ascertain how much he can lend you. Later, you can get approved for the credit and proceed with buying the house.
Find the right real estate agent
Having the right real estate agent by your side is crucial when you’re buying or selling a property. Realtors can provide you with critical information about the homes and neighborhoods, which is not accessible to the public. They can help you find the perfect house and locality, and they can also help you with negotiating. Besides, most real estate agents don’ have an upfront fee – they’re compensated when a sale is made.
Start touring homes and make an offer
Once you have a few homes on your list, start visiting them one by one. Also, you’ll be seeing a lot of houses, and it can be challenging to remember them all. So, take pictures and videos of the properties you visit. If required, you can also write down the key characteristics of each home.
When you visit a house, focus on the little details, such as:
- See if the plumbing is working properly – how strong the water pressure is and how long it takes to get hot water.
- Check the doors and open to see if they open and close properly
- Try electrical appliances, such as fans, lights, etc.
Apart from evaluating the actual property, it is also essential to analyze the neighborhood. Here are a few things to consider in an area:
- Is there enough space for street parking?
- Are there enough amenities in the locality (schools, restaurants, gyms, public transportation)?
- How much traffic does the street get?
Don’t hurry, and take as much time as you want to find the right home. If a house catches your eye, work with your realtor to negotiate and come up with a fair offer. Once you and the seller agree on a price, proceed with the remaining steps to complete the purchase.
How to buy a house: Get home inspection
Once you’ve selected a property, arrange for a home inspection to check any signs of damages or things that may need repair. In most cases, your realtor will help you arrange an inspection. Getting the property inspected allows you to renegotiate or withdraw your offer without penalty if the examination reveals significant damage.
Both you and the seller will receive the home inspection report. If there are any damages that require fixing, you can talk to the seller and renegotiate the offer before making a sale.
Select a loan
Once you’ve finalized the offer, get in touch with your mortgage banker, and select a loan. Lenders have a broad range of loan programs for purchasing a home. Be sure to set your priorities straight and select a loan program that aligns with your requirements.
Your lender will arrange for a third-party appraiser who will conduct the valuation of the house you’re buying. Since the appraiser is a third-party and not associated with the lender, both you and the lender will know that you’re paying a fair price.
Complete the paperwork and close the sale
Buying a house comes with a lot of paperwork. Your lender usually will arrange for a third-party to handle the required paperwork.
Once the paperwork is done, you’ll sign it and complete the purchase. It may take a couple of days for your loan to be funded after the paperwork is completed. After you receive the loan amount, you can deliver the check to the seller and move into your new home.
We hope this guide helped you determine how to buy a new house. Purchasing your first house is an exciting experience. But it is a time-consuming process, and it may take you a month or even more to move-in to your new home. Having an expert real estate agent by your side can go a long way in simplifying your home buying process.