Home Buying Steps - 10 Basic Steps to
Buying a Home
by Brandon Cornett
This tutorial is designed to teach you about the various steps to buying a home. Though the home buying 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 home buying steps you are likely to face during your home buying process. (This sequence may be slightly different for you, based on your own unique circumstances.)
Step 1. Examine Your Finances
One of the first home buying steps 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. The articles below will teach you how to judge your buying power and review your credit situation -- two very important steps to buying a home.
Step 2. Choose a Type of Mortgage
Generally speaking, the next home buying step is choosing a type of mortgage loan. This part of the home buying 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). The articles below will help you negotiate the all-important home buying step of mortgage selection.
Step 3. Get Pre-Approved
There are actually two home buying steps rolled into one here, but there so closely related I've listed them together. Our next step to buying a home will be choosing a mortgage lender and getting pre-approved. Pre-approval will help you immensely during the home buying 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.
Step 4. Find a Real Estate Agent
Continuing along in our steps to buying a home, we will need to find a qualified real estate agent to help us through the remaining home buying steps. The home buying 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 a home.
Step 5. Choose a Neighborhood
Some buyers will neglect this particular home buying 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, property values, commute time, educational opportunities and more. So doing a little neighborhood research is a crucial step to buying a home.
Step 6. Start House Hunting
Let's review our home 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 a home -- the house hunting process. Here are some tips to help make your experience a good one.
Step 7. Make an Offer
Once you find a home you like, you'll need to make an offer on it. For this home buying step, work closely with your agent to determine a reasonable offer amount based on recent, comparable sales in the area (referred to as "comps"). The articles will below will give you a good base of knowledge and make you more comfortable with the offer process.
Step 8. Get a Home Appraisal
To be honest, there's not much you need to do for this next home buying 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).
Step 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 home buying step that should not be skipped. After all, it will give you the peace of mind of knowing what condition the home is truly in. Read the articles below for more information on this crucial step to buying a home.
Step 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 home buying 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. The articles below will tell you what to expect leading up to and during the settlement process.
Source: Home Buying Institute