A Step-by-Step Guide to Make Buying a Home Easier

A Step-by-Step Guide to Make Buying a Home Easier

A step-by-step guide to buying a home for the first time homebuyer. Buying a home can be confusing, but this 5-minute read will get you through the process unscathed.

Buying a home is the most significant financial purchase of your lifetime. As a first-time homebuyer, you may be daunted by the process and not know what to expect. We’re here to help. By the end of this blog, you’ll know the basic steps of the home buying process. We’ll also include some good advice and tools to equip you on your exciting journey to becoming a homeowner. 

Step 1: Know Your Credit Score

Before you begin preparing yourself for the loan application process, it helps to be aware of your credit score. Your credit score is a significant deciding factor in whether or not you qualify for a loan and the interest rate you’ll pay on it. Once a year you are entitled to a free credit score report. For more information and things to avoid when it comes to getting your yearly credit report, visit the federal trade commission. Knowing your credit score beforehand can prepare you to either take steps to improve your score or be aware of any anomalies regarding it during the loan application process.

Step 2: Calculate How Much Home You Can Afford

Start your shopping process with reasonable expectations by using an affordability calculator. This can help you narrow down your price range.

Step 3: Find A Good Realtor

Having a knowledgeable realtor with excellent reviews and experience is an essential part of the home buying process. It may be your first time buying a home, but a good realty team has successfully walked hundreds through the same journey. Find a realtor based on honest reviews and industry benchmarks. Your neighbor’s realtor cousin may be a great guy, but that’s not a good metric for choosing the right real estate professional.

Step 4: Get Pre-Approved

In a buyer’s market pre-qualification for a loan is usually enough to begin the home buying process. However, with current competition in the 2021 seller’s market, it’s now crucial to enter the home buying process already pre-approved. To be pre-approved for a loan you, the borrower, must complete an official mortgage application, provide requested documentation, and submit a thorough credit and financial background check.

Step 5: Make An Offer

When you have found a home you can see as your own, it’s time to make an offer. This is the part of the process where it’s important to have a knowledgeable real estate professional. They can help you craft an offer for the seller that’s competitive but still reflects your wishes as a buyer. If the buyer accepts your offer, you’ll make a good-faith deposit, and the process then transitions into escrow. Escrow is a roughly thirty-day period where the seller takes the house off the market with the expectation that you will buy it, barring any issues that arise during the home inspection.

Step 6: Home Inspection & Appraisal

After an offer is accepted you’ll want to hire a home inspector to review the home for any flaws with the potential to negate the agreement. Every home has some issues, so this is also the time to see what minor repairs need to be made. During this time, your lender will also send an appraiser to ensure the home’s sale price and value are roughly the same.

Step 7: Closing

This is when the property title officially passes from the seller to you. A closing agent will usually oversee this process, and it often takes place at an escrow office or title company. During closing, you will sign various legal documents and pay closing costs. Be aware closing costs can amount to roughly 2% to 5% of the home price.

Let Us Help You Find Your First Home

This step-by-step guide gives you a good overview of what to expect as a first-time homebuyer, but every situation and homebuyer is different. It’s important to have reliable professionals helping you as you look for your first home. We at the Reed Team value honesty, integrity, hard work, and putting clients’ interests first. We can help you make the right choices while looking for a home and negotiating with sellers. If you’re considering buying a home, reach out to us here or contact us at 949-392-6400.