The home-buying process is no easy feat, but as long as you tackle it one step at a time, it becomes far easier to handle. With that being said, here are three questions that you will want to ask yourself as you embark on this journey.
1. How Much Can You Comfortably Afford?
Before you can even start looking for a house, you need to determine how much you can afford to pay for a house. To determine this, you need to first look at your budget. Aside from pulling together your finances, you have to look beyond the monthly mortgage that you will be paying. You have to factor in costs like mortgage insurance, property taxes, homeowner's insurance, and home maintenance.
Next, you have to make sure that you have enough money saved up for a down payment and closing costs. Depending on your credit history, you will generally be required to put down a 10 to 30 percent down payment.
Finally, you need to talk to a lender and get pre-approved for a loan. This will require gathering the necessary documents, such as your employment history, proof of income, and proof of debt for the lender. A pre-approval letter will show sellers you are serious about buying, and it could put you at the front of the pack. Plus, it makes it faster and easier for you to act when you find the home of your dreams.
2. Where Do You Want to Live?
Once you have your budget handled and a pre-approval letter in your hand, it is time to determine a location. The best way to do this is to make a list of your priorities. Do you want a single-family home, or could you settle for a townhome? Are schools or commute time most important? What types of amenities, such as restaurants and local parks, are important?
After you have made your list of needs, do your research to locate a few neighborhoods that meet your criteria. Then, pull up crime statistics, school data, and possibly even board meeting minutes to get a full picture of the community before deciding on the neighborhood in which you want to buy a house.
3. How Do You Make Offers?
It isn't often that you will find the home that you love right off the bat, though it can happen. However, when you do find it, you need to know how to make an offer; you need to know how to negotiate and when. First, you need to know whether the seller is motivated or not. Are they moving out of state? Have they already purchased another home? If there is that element of urgency, then you may have the upper hand in negotiations.
When you submit an offer, it is imperative that you have done your due diligence. You need to be familiar with sales of recent homes in the neighborhood, as this will help you determine whether the current asking price of the home you are interested in is fair and whether you could submit a lower offer and expect it to be accepted.
For more information, contact your local real estate agents.