The road to buying a new house can be long and stressful. In my case, my husband and I found the perfect home on a tree-lined cul-de-sac. We fell in love with the place the minute the realtor brought us inside. Unfortunately, we got outbid by another couple, willing to pay well above the asking price. (I was so sad I stayed in bed for an entire weekend, eating cupcakes and watching Fixer Upper on HGTV, wishing I had a home to decorate with Joanna and Chip’s amazing design advice.)
Many times, people are unfamiliar with the important steps to buying a house. Your home is a significant investment, so my advice is don't rush into anything. Here's what we suggest you consider before buying a house:
1. Crunch the numbers
Start by getting your finances in order to determine your budget. Don't forget to leave room for additional payments, such as closing costs, inspection costs and broker fees - plus monthly bills and maintenance costs once you move in. Your credit score is an important determining factor when buying a home, so review your report for errors so you can correct them before you begin the house hunt.
2. Make your wish list
Start painting a mental picture of the home you want to buy, creating a list that distinguishes wants from needs. For starters, think about if you want new construction, recently renovated or a fixer-upper home. Also consider location, property details, number of bedrooms and bathrooms, architectural style, schools in the area and walkability to shops and restaurants.
3. Shop around for a mortgage
Talking with a lender can help you determine what kind of house you can afford, as well as learn about the different loan options available. Forbes suggests mortgages with fixed rates that match the amount of time you plan to keep the house but the best option will depend on your financial situation. Getting pre-approved for a mortgage also shows sellers that you're serious about buying a home. However, compare mortgages, down-payment options and upfront costs from several lenders before you settle and pick one.
4. Start the house hunt
Once you've gotten pre-approved for a mortgage, you'll be ready to head to the open houses. While you're likely to spend all your free time scouring the internet for listings, it's best to work with a realtor or buyer's agent for expert advice and insider access to available homes in your area. Remember: As tempting as it may be to look at homes just above your price range, doing so can lead you to fall in love with a home that might make budgeting more difficult in the future, so be careful during your search!
5. Make your offer
When you find the house, you can make your home, it's time to make an offer - negotiations encouraged! According to Architectural Digest, it's generally acceptable to offer 5 percent below the asking price but your realtor will be the best source of advice for the current housing market.
6. Schedule the inspection
Inspection requirements vary by state, but it's always important to have one before you move. Buyers are usually responsible for paying the inspector, so make sure you're serious about buying the home before arranging the details.
7. Finalize your loan
The lender you choose will likely send an appraiser to determine the property's value before laying out the loan offer. Ideally, the appraisal will come back at a number equal to or more than the price you offered.
8. Sign the papers
It's finally closing time. The home is yours after you sign the contract and hand over the closing costs, which are usually 2 to 5 percent of the purchase price, according to Trulia. After that, it's time to celebrate and get packing! Follow these tips to take the stress out of moving, and make your way down this checklist for new homeowners before you get settled in. Once that's done, focus your energy on unpacking - and maybe even planning a housewarming party.
A new home doesn’t always mean everything in it is brand new. Unfortunately, things break. That’s why being prepared for home repairs is always a good strategy. See how plans from HomeServe can help with the costs of covered repairs.