Buying a home can be overwhelming for most people. It is a big investment, probably the biggest one you will ever make. Unless you make a $100,000 plus income an year, you might think owning a home is next to impossible. But it doesn’t have to be. Here’s what you can do to get out of your parent’s house, get off rent and start making a monthly contribution to owning the roof over your head.
4 steps to remember when buying a home
There are a lot of homes at each different price point. You have to decide which one is the best fit for you and your lifestyle. In some cases, owning an apartment near your place of work might be the better and less expensive option than owning a house in a far off residential area. Factors such as work, commute, price, security, collateral, interest rates all have to be accounted for.
Step 1 – Research
Do thorough research on the type of house and the neighborhood where it is located. Browsing on the internet can be helpful but it is certainly not enough. Meet with real estate agents and individual sellers to get the feel of the current market. You might have to go through ads in the newspapers and attend a few open houses before you make your decision. Survey at least 7 homes before making your decision. You will also learn what works for you and what doesn’t. A good idea is to make a checklist of all the things you feel are necessary before making your purchase.
Step 2 – Hire an agent
Although this is not necessary, hiring an agent will save you a lot of time. Agents can do better research than you and are already familiar with the market trends. They are often aware of new listings that have not made it public yet. Real estate agents can detect overpriced properties and guide you in the right direction. They also have personal contacts and experience that make the whole process easier.
Step 3 – Find a mortgage lender
An agent can help you with this as well. Finding a lender and pre-qualifying for a loan puts you in a better position to negotiate terms with sellers. Sellers consider you potentially better buyers than those that have not been pre-qualified. This service is offered by most lenders for free, but put you under no obligation to accept their offer. To get pre-qualified for a loan you have to show a consistent source of income, good credit scores and your history of residence. This information is used to assess if you are a good investment.
Step 4 – Conduct a home inspection
This is crucial. Most first time home buyers tend to forget this step. Hire a reliable home inspector to conduct a home inspection. He can take a look at the minor details that you might not consider. For example the heating and cooling system, the roof, the basement, the attic, pest infestations, weak foundations, electrical grid and wiring and so forth.
The real estate market is really hot right now but that doesn’t mean that you cannot negotiate. Always buy a home on your own terms to avoid future regret.