Are you thinking about buying a house in 2024? Or, have you already decided to purchase but are wondering about the process? Buying a new home is exciting but it often comes with some challenging moments. To ensure you’re ready and to prepare you for what’s to come, we’ve created a list of 13 steps to expect.
Take the time to review our list and make an action plan based on these best practices. Then, you’ll be in an excellent position to breeze through the home-buying process and end up in the house of your dreams.
1. Make Sure You’re Ready to Move
Before buying a new house, ensure the purchase makes sense for your life. Sit down and ask yourself if you’re ready for the upkeep, location, and financial commitments that come with home ownership. If you’re buying the home with someone, make sure you both are on the same page regarding all aspects of the purchase.
2. Get Your Finances in Order
When considering the financial aspects of purchasing a home, remember that you’ll need a down payment, closing costs, and monthly income to cover mortgage payments, property taxes, and homeowners insurance. Additionally, consider how much you’ll have to spend remodeling and maintaining a new home.
3. Create a Wish List
Some parts of buying a new home are more fun than others, and creating a wish list of what you want in a house is an exciting step. Here, you’ll write down everything you’d love in a house: a home office, proximity to the beach, a yard for entertaining, a location in a safe neighborhood, etc. These are all examples of wish-list items and many of them may be your wishes too, but think carefully about what joyful homeownership looks like to you.
4. Be Real About Must-Haves
It’s fun to wish for what you want in a home, but be real about what you need. How many bedrooms are necessary? Do you require a single-story house or a home close to work? Is dedicated parking or low-maintenance essential? These are all important considerations for many buyers, but you’ll likely have your own (short or long) list of must-haves in a new home.
5. Shop for a Mortgage
You’ve made your wish and must-have lists, but it’s not time to go home shopping yet. First, you have to shop a mortgage. Find at least three lenders with good ratings that you can contact to learn about interest rates, loan closing costs, and general loan processes.
6. Get Pre-approved for a Loan
After you’ve compared lenders, getting pre-approved for a loan is the next step. Pre-approval means you’ve given the mortgage company some initial information and it has determined, after a cursory review, that you’d likely get approved up to a specific dollar amount. Remember that pre-approval is not the same as final approval.
7. Find a Real Estate Agent
It’s vital that you have a real estate agent to represent you in your home purchase. These professionals know the industry inside and out, and they’re experts on real estate transactions. The best agents know how to negotiate contracts effectively to get the best price and terms for their clients. Ensure you interview at least three agents before signing a buyer’s agent agreement.
8. Start Your Home Search
Now that you have your pre-approval letter and real estate agent, it’s time to start your home search. Give your agent your wish and must-have lists and ask them to show you suitable properties. You may have to look at dozens of homes to find the right one, searching the market over a span of weeks or months. So, have patience and keep your goal in mind—joyful and carefully considered homeownership!
7. Make an Offer
When you’ve identified a property you want to purchase, work with your real estate agent to make an offer. Your agent should be able to advise you on the best offer amount and contract terms.
8. Secure a Mortgage
When you have an accepted offer, you’ll need to contact your lender and begin securing a home loan. The mortgage company will ask you for information, forms, and documents to officially qualify you for the loan and satisfy its lending requirements.
9. Get a Home Inspection
After you’ve opened escrow, contact a home inspector to investigate the property from top to bottom. The inspector should examine the home’s structural, electrical, and plumbing systems as well as other property details. You can hire more than one inspector, so consider bringing in specialists as needed, such as someone to do a soil survey for a hillside home.
10. Obtain Homeowners Insurance
Most lenders will require you to obtain homeowners insurance, so start shopping around for the best coverage and price.
11. Fulfill Escrow Requirements
During the escrow process, there will likely be many documents to sign and reports to initial among other requirements. Ensure you and your real estate agent keep abreast of all timely factors concerning your escrow, such as when you’ll need to provide funds or remove contract conditions.
12. Close Your Loan
After your mortgage lender receives all your documents, does its due diligence on the property, and approves your loan, it’ll give you the good news—you’re ‘clear to close’! Congratulations on reaching this momentous milestone.
13. Move into Your New House
You’ve worked hard to get to this point and gone through a lot. Now, it’s time to move into your new home! Ensure you hire a locksmith to change all the locks before your first night in the property, and then settle in and start planning how you’ll make your house your own.
Are you looking to sell or buy a new home? Let Better Homes & Gardens Real Estate® walk you through every step in the process.