Checklist for Buying A Home | Flavin Realty

Checklist for Buying A Home

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Buying a home comes with a laundry list of things that need to be prepared before you even begin house hunting. Just beginning this process can be overwhelming. Consider these steps to help you in your homebuying journey. 

1. Do a financial analysis. 
The average home price in the United States is around $300,000. Unless you recently hit the jackpot, you'll likely need to borrow the money to purchase a home. But lenders don't just hand over money. You'll need to be in good financial shape before you make a large purchase like a home. 

Start by running a quick financial check-up on yourself.
- How much debt do you have already?
- How high are your credit card or other debt payments? 
- Is your credit score on the higher side? In many cases, credit scores at or above 760 get the best terms and rates.

If your score is lower than 760, you may still qualify for a loan, but it might be at a higher interest rate or at a less-favorable term. It may benefit you to work on raising your score before taking on a mortgage. A great real estate agent can help advise you on this. 

2. Seek out mortgage lenders and mortgage preapproval. 
Before beginning your house hunt, reach out to multiple lenders to get an idea of what you can afford through the prequalification and/or preapproval process. Lenders will give you a loan limit through preapproval, and you can begin to search for homes within your budget. You may want to speak to multiple lenders about their available interest rates before allowing one to run your credit. Some lenders may provide better rates than others.

3. Find a professional. 
The most beneficial thing in your home search is a knowledgeable agent to assist you along the way. Finding a home and navigating the details can be confusing. But this is what realtors are trained for! They know the ins and outs of the market and the paperwork. And having a good realtor by your side could wind up saving you some money. 

You won't need an attorney at this point, but begin considering your options and asking for recommendations so you're ready when that time comes. This is an integral part of the closing process. 

4. Shop!
This is the fun part. With your real estate agent, find homes that are within your budget. Make a list of the things you like and dislike in each home you view. This may be a lengthy process, but you'll gradually narrow down the homes that meet your criteria. 

5. Gather important documentation for the sale. 
This step can be tedious. Get everything in order beforehand. Some important documents you need are:
- Tax returns from the past two years
- Bank statements
- Pay stubs from the past two months
- Proof of funds for the initial payment
- A letter of recommendation from your previous landlord (if you rented)
- Your ID

Although your seller or realtor may need more, this list is a good start to help your homebuying process move along efficiently.

6. Make an offer (and buy). 
Your realtor is your go-to person for this step. After you've found the house you like best, lay out your conditions and offer with your realtor. This may require renegotiating, so prepare for adjustments to your offer. This may include a counter from the seller or increasing your offer to compete with another. Be prepared for anything. Once your offer is accepted, start your mortgage approval process to purchase the home. 

7. Get home inspections and an appraisal. 
In most cases, nothing is complete before an in-depth inspection (unless you're purchasing a home as-is, but that's another conversation). In this process, a licensed inspector goes through every detail of the home to ensure it's in safe, livable condition. 

Inspections
Inspections may uncover minor issues like plumbing or electrical fixes. They may also reveal larger issues that need attention, like roof damage or a malfunctioning HVAC system. Either way, you need to know what needs to be fixed, as it may alter your purchasing agreement.

Although it's typically unreasonable to expect a seller to fix everything on an inspection list, it's not uncommon for a buyer to ask for an allowance or for the seller to repair some big-ticket items. Discuss the specifics with your realtor to determine the best course of action. 

Appraisal
Mortgage lenders typically request a home appraisal to prove the property is worth what you're paying. It's important to note that lenders will not loan more than the property's appraisal value. Make sure you've planned to cover any necessary difference. In a competitive market, this may be more likely, but a great realtor can usually advise you on what a house is "worth" when preparing your offer. Your agent can also assist you with the next best steps in the event your appraisal and offer don't match. 

8. Close. 
With the paperwork and inspections complete, it's time to sign the remaining paperwork and get your keys. This is where a great attorney comes in. He or she will ensure you get a "clean title" on your new property that is free from things like liens that the seller is responsible for. Before closing day, make sure you have the down payment arranged, insurance in place (including homeowners' and flood, as required by your lender) and your ID for signing. 

How can we help? 
Homebuying can be a tedious process, but Flavin's team of seasoned realtors is happy to help you along the way. If you or someone you know needs real estate services, click here to contact Flavin's highly qualified agents. 

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