Once you first consider when and how to buy a house, you’ll likely get all sorts of advice — some helpful, some not so much. And while it can be a long process, buying a home is exhilarating, rewarding, and a big commitment. Before taking the plunge, use this checklist as a guide to buying a house — and ensure you’re prepared for the various steps in the home-buying process. Here are a few tips to help you through the viewings, negotiations, and everything.
. Understand what you can afford
Before you start house hunting, you must determine how much you can afford. Consider your income and existing monthly expenses. There are several home mortgage calculators online that can help you figure out what you might be able to afford. Keep in mind that you will want to budget for not only the mortgage but also for new budget items that go along with owning a home, such as insurance, possible homeowner association (HOA) fees, taxes, landscaping and yard work costs, utilities, repair costs, etc.
. Be picky but realistic
When you begin shopping for a home, the furniture, beautiful artwork, and fresh towels in a home can easily make you fall in love with the style of the place or its current owners. Try to look beyond this and focus on what is most important: the bare bones of the home itself. Try to envision the rooms without furniture to determine how spacious (or lacking space) the property is. Examine the countertops, floors, and walls for defects that staging may have camouflaged.
. Factor in all your costs
If you are a first-time home buyer, there are some grants and programs available to help you find the right funding to purchase a home. Each state has different programs and first-time home buyer incentives to assist you with the buying process. Incentives can include qualifying for reduced interest rates if you meet income and property limits, assistance with down payment and closing costs, and a reduction in potential federal income tax liability. You may also want to consider applying for a loan, which is easier to qualify for if you have a lower credit score.
. Leave emotions at the door
Don’t get discouraged if you lose out on the first or second house, or the seller won’t come down in price.
Your credit score will influence whether you’re approved for a home loan and how much you’ll pay in interest. This is one of the steps to buying a house that can save you thousands of dollars over the years. You want a score of at least 700. Pay down your debt and keep your credit card balances under 40 percent of the available balance. Avoid closing any of your accounts, which can reduce the length of your credit history and will make you less credible as a borrower.
. Practice your poker face and get pre-approved for a home loan
Don’t show the seller’s agent all your cards if you’ve fallen in love with a house. Hang back and prepare to negotiate. One of the many mistakes home buyers make is failing to get approved for a home loan before shopping around. Most sellers are leery of accepting an offer if a buyer isn’t pre-approved. They also may not want to wait for the buyer to get approved for the loan and can accept someone else’s offer. To avoid this, meet with a lender before you start looking to get your financial questions answered and get the pre-approval documentation lined up.
. Get an inspection
You’ll want to hire your inspector if you consider purchasing a home and making an offer. Although the seller may hire an inspector to look at the electrical components and the structure of the home, the results of the inspection can still be influenced by the fact that the inspector is working for the seller. This makes it important for you to hire your inspector to ensure that nothing is overlooked during the process. If the results include mold discovered in the basement or a roof that needs to be replaced, for example, this may impact your negotiations with the seller on price.
. Think long-term
One of the most important tips for buying a house is researching neighborhoods before buying. You may fall in love with a home that has all of the features that you’re looking for, but the location can detract from the value and pose a future problem. Visit the neighborhood at various times of the day to determine how safe it is and how comfortable you feel at night. Check to see whether the homes in the neighborhood are well-maintained because those other homes will impact the value of your house over time. Check the value of the homes in the neighborhood and their recent sale prices. Look for properties that are similar in size and condition to the one that you’re interested in purchasing to compare the value.
