How to Buy a Home
Buying a home, spending more in one purchase than you make in years…seems a little daunting maybe. Maybe a little too adult-ish…a little too commitment embracing for some. But, bottom line is…it is the SMART thing to do as rents keep skyrocketing. Why pay someone else’s mortgage? Might as well pay your OWN every month and get the tax benefits and appreciation all to yourself!
10 EASY Steps to buying a Home!
- Figure out WHERE you want to live. Give this a LOT of thought. Think about your commute. Think about your day to day life. Think about the future. Think about your family, or the people you will be living with. Where are their activities? Sports, church, family, friends, passions… how far are you willing to live from these?
- Talk to a real estate agent. I could move this to number one…but I think it may help to know your WHERE before you choose your WHO. You want an agent that is going to understand your whys and wants and your must haves and deal killers. You should find someone that has experienced what you hope to experience in your new home. Now they don’t have to be just like you, but someone that has walked the road you’re starting down one can be very helpful. Find an agent you connect with and you are confident with.
- Talk to a lender. Usually your real estate agent can suggest a great lender. I am friends with the lender I suggest…but please be clear I am not financially compensated for suggesting people work with him. And our friendship grew out of working together. I refer him because he has NEVER been wrong…if he says someone can buy a home up to a certain price, they can. He can look at a person’s whole picture, and offer and suggest different loan types and programs…and together you can decide the best options for YOU. In this process, spend time thinking about your life, and your budget. You may qualify for more home than you should buy…meaning you don’t want to be house poor. If you love to spend $8 a day at Starbucks, getting your nails done every two weeks, and eating out every meal…you need to remember this when you are deciding how much home to buy.
- Make sure you have SOME cash on hand. You will need to put down earnest money on your home, this is negotiable, but 1% of the purchase price is a safe bet. You will also need to pay for home inspections. Depending on the age, size of the home, and whether it has a pool and spa will affect this amount. Talk to your agent. Including a termite inspection I would plan on $350-$500 for inspections. You also usually pay for an appraisal for the loan before you buy the home. This is usually around $650…but talk to your lender. Make sure you aren’t caught sweating the costs.
- Start looking at homes online. Once you know your where, and your how much…and you have an agent…have that agent start sending you listings. This is the ONLY way you will not see listings that are under contract as active and available…you can read WHY this is the case HERE. While looking at homes, keep Deal Killers in mind, and try to avoid them…you will be glad you did when it is time to sell. If the market is a seller’s market, make seeing a home you love a priority.
6. Write an offer on a home you love. Once you find the home of your dreams that fits into your where and how much, put a ring on it. Make an offer. Don’t let it get away. Follow your agent’s advice on this…they have more experience than you…and often they have picked up some clues from the listing agent about what the seller is looking for.
7. Inspect, research, investigate. Here in Washington, a 10 day inspection period is standard. Use it. Have a professional home inspector do a thorough home inspection…and if they suggest further inspections…do them. Knowing all you can know is important. If you might have to replace your roof in the next 5 years, call some roofers and talk to them. Get a range of estimates…everything you hear will be different…and you should hear all of the possibilities.
8. DON’T make any large purchases (such as a car or a boat) while you are buying a home. This is more of a DON’T than a DO. Your lender will discuss this with you…but seriously, eye on the prize. I can’t tell you the number of times I have been chatting with a buyer in escrow and they are telling me they found the perfect living room set for their soon to be new home…and I end up screaming through the phone “DON’T BUY IT!!!!!” Of course I want you to have this new furniture, but I don’t want your debt to income to be hit off balance, or the credit inquiries to lower your credit score. Just keep all buying at bay until you are an OFFICIAL home owner.
9. Get everything to the lender as quickly as you can. I know it is super annoying. I know you have already given them absolutely everything you could ever imagine them requesting. If they request one more thing…get it to them.
10. MOVE IN. Embrace home ownership. Give your settlement sheet to your accountant , and make sure you get the tax benefits of your purchase…as well as stay in contact with your awesome agent so you know how much your house is appreciating. Take good care of your home with maintenance done regularly. Tell everyone about your awesome agent so others can experience the wealth of information and advice she has bubbling out of her regularly. Throw a house warming party, invite the awesome agent, my bet is she will even help you with this celebration. Start your Story.
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