Buying your first home can be a long and complicated process involving lenders, lawyers, and home inspectors. It is natural that you feel a little overwhelmed about the road ahead.
We asked an expert in Penticton real estate to share his 10-step guide for first-time homebuyers, to help make their first home buying process more manageable.
Step 1: Start with Research
When starting your home buying journey research is a great first step. Begin by monitoring housing trends, if you know which neighborhood you are interested in you can be specific about your research. Research the changes in transportation costs you are likely to face after moving. All this data will influence your decision, so it is wise to start early to have a clear image of what you want.
Step 2: Evaluate Your Finances
The next and perhaps the most crucial step is to evaluate your finances and assess your financial health. Start by looking at your savings, set aside the emergency savings first and then add the remaining amount with the investment accounts to get an idea of the down payment you can afford.
Then consider your monthly income and expenses to know how much you will allocate towards the mortgage payments. Include for all utility expenses. Finally, research the costs of moving, repairs and upgrades your new house might require. You need to be financially prepared to bear that cost too.
Step 3: Meet Lenders
After you have a clear picture of your financial position and an idea of how much you can afford, it is time to meet a mortgage broker to get prequalified. This step should be done before you start looking at houses. Your mortgage broker will need financial information that includes your yearly income, the amount of savings and investments you have, where you work, how long you’ve worked there, the amount of our current debt, along with your credit score. The lender will then tell you the amount of loan you qualify for.
Step 4: Team Up With a Successful Real Estate Agent
Dealing with the fundamental financial aspect of the process will tell you the price range of the homes you should be considering. It is time to assemble your A-Team. A reputable and experienced real estate agent with good testimonials will be your indispensable partner during the house search, negotiation and closing phase, so do your due diligence and search for a capable and experienced agent.
Having an attorney on your team will be helpful as you prepare for the purchase and sale of the house. Your real estate agent can putyou in touch with all the ancillary services you might need. An attorney is an excellent resource of legal advice and will represent your interests in front of the seller of the home.
Step 5: Start the House Hunt
This is perhaps the most exciting and fun part of the home buying journey. However, before you tour houses create a checklist of your “must haves” you are looking for in a property and take them with you to every property you visit. Test the plumbing, the electrical system, the windows, and door to see if everything functions properly. Ask about the parking, and check if the home has nearby amenities like schools, parks, restaurants, and public transport.
Step 6: Make the Offer
Once you have found the right home, proceed to put together an offer. Work with your real estate agent to structure a competitive bid. You will then wait for the proposal to be accepted, rejected or negotiated with the seller. Be patient.
Step 7: Get the Home Inspected
Do not assume that the work finishes after your offer has been accepted because purchase offers are dependent on the home inspection. Your real estate agent will work with you in arranging a third party home inspector to look at the house to check for structural damage. A copy of the home inspection report will be provided to you and the seller. This would be your time as the buyer to renegotiate the price, withdraw the offer if the seller can’t meet your requirements, or ask the seller to fix anything.
Step 8: Get the Mortgage
After your offer has been accepted you can work in tandem with your lender to secure a mortgage. The steps may involve submitting financial information, appraisals and a survey of the property by the lender.
Step 9: Finalize the Paperwork
Before the closing there is a lot of paperwork to complete including loan documents. The paper will then need to be checked before the day of closing. At closing, expect your attorney to have a lot of paperwork ready for you to sign. The check will be delivered to the seller, and the seller will sign the paperwork.
Step 10: Rejoice!
Congratulations! After all that time and effort, you are a home owner and an official part of the community. Time to move into your new house.