How to Buy a House in 7 Steps?

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Buying a house takes time. And no house—not even that perfectly cute bungalow on the corner with the fenced-in backyard—is worth jumping into before you’re ready.

You know what’s more important than the house you buy? How you buy that house.

Use this step-by-step guide to buy a house the smart way.

Step 1: Save for a Down Payment

It’s tempting to skip the money question and jump straight into looking at homes in your area. After all, home shopping is way more fun than thinking through your finances! But a weak financial foundation is a recipe for regret when it comes to your home purchase.

Don’t shortchange your future by having a short-term perspective. You'll build years of memories in your home. You’ll share countless meals in the kitchen and spend hours enjoying warm summer days in the backyard. Do you want those moments overshadowed by financial stress?

Buying a home is probably the biggest purchase you’ll ever make. Are you sure you’re ready? Answering these two questions will help you know!

Step 2: Get Preapproved for a Mortgage

The best way to buy a home is with cash. It may sound crazy, but people like you do it every day! If that’s not feasible for you, you’ll need a home mortgage loan.

Step 3: Find the Right Real Estate Agent

Though your search for homes may start online, it shouldn’t end there. You can do a lot of research on your own, but you need the help of an expert when it comes to actually finding and securing your perfect home.

A buyer’s agent can help you navigate through the home-buying process. In some cases, they may even be able to help you find a house before it hits the market, giving you a competitive edge. And when it comes to making an offer, your agent will negotiate on your behalf so you don’t pay a penny more than you have to.

Step 4: Go House Hunting

After you’ve been preapproved for a mortgage, you’re ready for the fun part: finding your perfect home!

Do your homework!

Once you reach this step, your finances should be rock solid so you know exactly what you can afford. And with a real estate agent to guide you through the process, you have a winning combo for buying a home with confidence!

Before you dive into the home search, create a list of must-have home features. If you’re buying a home with your spouse, make separate lists and compare. Once you have clarity on the features you both want, share them with your real estate agent and use those criteria as the foundation of your home search.

Your agent will be able to help you set realistic expectations and target your search to areas you can afford.

Step 5: Submit an Offer

Once you’ve found the right home, it’s time to get serious! That means submitting an offer and signing a contract agreement with the sellers.

What’s included in your offer?

Your real estate agent will work with you to submit a solid offer. If you end up in a bidding war with other buyers, keep a cool head and put your best foot forward. Things like being preapproved with your lender and having a flexible closing date can help make your offer strong.

Your purchase agreement will include details of the real estate transaction like:

• Buyer and seller information
• Property address
• Purchase price, lender information and down payment amount
• Earnest money deposit
• Items to be left with the home (like appliances or furniture)
• Contingencies like the home inspection, appraisal and final mortgage approval
• Closing date
• Sometimes agreeing on terms is quick and painless, but it can also be one of the hardest parts of the process.

If your negotiations get intense, remind yourself that both parties want the same thing. The sellers want to sell their home, and you want to buy it! Sometimes it pays to compromise on little details if that will move the process forward. A good real estate agent can give you advice about when to give in and when to hold firm.

Step 6: Get a Home Inspection and Appraisal

Once you get to this step, you’ll officially be under contract on your new home! That’s something to celebrate. Being under contract also means you’re done with the most time-consuming stages of the home-buying process. Cheers to that!

But now that you’re under contract, what should you expect? Your main task now is to work through the contingencies in the contract.

Contingencies are simply conditions that must be met in order for the home purchase to take place. They provide a safety net for you to back out of a sale without losing your deposit if something goes wrong.

Even if you’re in a competitive market, don’t let your emotions lead the charge. You should never skip these contingencies because they offer important protection for your home purchase.

Home Inspection

As a buyer, you have the right to a professional home inspection before you purchase the house, and you would be crazy not to do it! This is one of the most important precautions you can take before purchasing a home because it keeps you from being blindsided by structural issues or expensive repairs. If the inspection reveals major problems with the home, you can ask the seller to fix the problem, reduce the price, or cancel the contract.

You can also consider getting other professional evaluations like a termite inspection or radon test, depending on the advice of your real estate agent and the age and condition of the home you’re purchasing.

Appraisal

If you’re getting a home loan, your lender will require an appraisal evaluating the value of the property. An appraisal protects you from paying more than the home’s true value. If the appraisal comes in lower than your offer price, your real estate agent can provide the best guidance for what to do next.

Final Mortgage Approval

The best way to pay for a home is with cash! Not only does it set you up for building wealth, it streamlines the real estate process. If you did get a mortgage, you’ll have a final step before you can close on your home: getting final approval. Your lender will dig through the details of your finances to finalize your mortgage. Whatever you do, don’t open a credit card, take on more debt, or change jobs once you’re under contract. That’s a stupid idea anyway! Plus any changes in your financial situation can jeopardize your loan process.

Step 7: Close on Your House!

You did it! All the planning, house hunting and waiting are over. The final step in the home-buying process is closing on your new place!

Before you get the keys for your new home and officially call it your own, you have one more sprint ahead of you: paperwork. That’s right! Bring on the hand cramps!

You should receive a copy of your closing documents to review ahead of time so there are no surprises on closing day. Most likely, you’ll pay for:

• Closing costs
• Prorated property tax
• Homeowner’s association fees (if this applies to your neighborhood)
• Homeowner’s insurance
• If there are any confusing terms or conditions as you work through the paperwork, don’t be shy about asking questions! This is one of the biggest purchases you’ll ever make, and you should know exactly what you’re signing up for.

Once you sign all the paperwork, it’s time to breathe a sigh of relief. You’re officially a homeowner. Congratulations! The home-buying process may not be easy, but having a beautiful new home to call your own is worth it in the end.

Source: daveramsey

Financial Capital Group, LLC is a lender that provides home and commercial finance solutions for business, professionals, individuals and families since 1999. Our love and care for others is directed as much within our walls as it is outside of them. Our desire is to work together to meet the needs of our customers.

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