Buying Real Estate - 10 Steps to Buying a Home
This tutorial is designed to teach you about the various steps to buying real estate. Though the real estate process differs from one buyer to the next, there are certain home buying steps that most buyers go through.
So without further ado, here are the 10 steps you are likely to face when buying real estate.
1. Examine Your Finances
One of the first steps when buying real estate should always be a good review of one’s financial situation. You can bet that a mortgage lender will put your finances under the microscope, so you should do the same.
2. Choose a Type of Mortgage
Generally speaking, the next step to buying real estate is choosing a type of mortgage loan. This part of the real estate process requires careful consideration on your part, because your mortgage will stay with you for some time (until you sell, refinance or pay the mortgage off).
3. Get Pre-Approved
There are actually two real estate steps rolled into one here, but they are so closely related I’ve listed them together. Our next step to buying real estate will be choosing a mortgage lender and getting pre-approved. Pre-approval will help you immensely during the real estate process. For one thing, it will show sellers that you are serious about buying their home (and financially capable). This can make a big difference in whether or not they accept your offer.
4. Find a Real Estate Agent
Continuing along in our steps to buying real estate, we will need to find a qualified real estate agent to help us through the remaining steps. The real estate process can move pretty fast, and there’s a lot at stake financially. So having a skilled agent on your side can help you avoid making costly mistakes, especially if it’s your first time buying real estate.
5. Choose a Neighborhood
Some buyers will neglect this particular step, rushing off to look at houses without doing the proper research on neighborhoods. Which neighborhood you choose is almost as important as which home you choose. Neighborhoods have a direct influence on quality of life, social and recreational satisfaction, real estate values, commute time, educational opportunities and more. So doing a little neighborhood research is a crucial step to buying real estate.
6. Start House Hunting
Let’s review our real estate buying steps up to this point. You’ve got your finances in order, been pre-approved for a certain type of mortgage, found a good agent, and narrowed your search to a few select neighborhoods. Excellent! You’re ready for one of the most exciting steps to buying real estate — the house hunting process.
7. Make an Offer
Once you find a home you like, you’ll need to make an offer on it. During this step, work closely with your real estate agent to determine a reasonable offer amount based on recent, comparable real estate sales in the area (referred to as “comps”).
8. Get a Home Appraisal
To be honest, there’s not much you need to do for this next step. Your lender will arrange for the appraisal, and you basically have to stand by and watch (while hoping that the home appraises for the price you’ve agreed to pay).
9. Get a Home Inspection
The main home inspection is one of several inspections you should have done on the home. A home inspection is an important step in the real estate process, so it should not be skipped. After all, it will give you the peace of mind of knowing what condition the home is truly in.
10. Settlement / Closing
The period between offer acceptance and the final settlement is known as escrow. You’ve probably heard somebody say, “My house is in escrow.” During this part of the real estate process, you might have additional inspections (for radon, pests, etc.), and you’ll likely have some more paperwork to finalize as you move toward the closing / settlement date.