For a first-time home buyer, the entire process can seem daunting. Between loans and down payments and paperwork, where does anyone even start? Fortunately, the buying a home isn’t quite as difficult as it seems, and it can be boiled down into a few key steps. While this isn’t every single part of the home buying process, these are the big events that home buyers will encounter.
1. Hire a Reputable Agent
Every home buyer needs an agent. While some people may think it’s optional, the advantages of using an agent far outweigh any advantages of not using an agent. Real estate agents know the housing market, know how to negotiate to get the buyer the best deal, and have access to resources that the general public doesn’t. Plus, hiring an agent to purchase a home doesn’t cost the buyer a single cent because their commission comes from the seller’s income.
2. Choose the Right Mortgage
Most people can’t pay cash for a home, so instead, they have to use a mortgage. However, there isn’t just one type of mortgage. Instead, it’s a little more confusing. Home buyers need to research different types of mortgages so they find one that fits their lifestyle and financial situation. Here are some of the different types of mortgages home buyers might consider:
- FHA loan: These are good for first-time home buyers and buyers who can’t afford a 20% down payment. They allow as low as 3% down, making homeownership more accessible.
- Fixed-rate mortgage: This type of loan prevents the interest rate the buyer pays from ever increasing or decreasing through the duration of the loan.
- Adjustable-rate mortgage: ARMs automatically adjust the interest rate at a regular time throughout the loan so buyers can potentially get a better price.
- VA loan: Current or past members of the United States army can get assistance from Veterans Affairs to buy a home, build a new home, or refurbish an existing home.
- USDA loan: Buyers who are interested in buying a home in a rural or suburban area may be eligible for this loan sponsored by the USDA.
There are so many different loans, and some of them even have their own sub-loans that have different focuses, so it’s important for buyers to thoroughly research all of their options before deciding.
3. Go House Hunting
The most fun part of buying a new home is to go out looking for it. The agent should be keeping an eye on the market to look for contenders, and they will be able to set up appointments for a showing. Before attending showings, try to compile two lists: one of features that are must-haves, and one of features that would be nice but aren’t deal breakers if they aren’t present. Having these sorts of lists written down can be helpful for staying focused and not getting overwhelmed by every little thing the home has (or doesn’t have) to offer.
4. Make an Offer
Once the Lee's Summit new home buyer has found a home they love, it’s time to put in an offer. In the offer, the buyer will state the amount they want to pay for the home, any contingencies they may want to use, and the schedule they’d like to operate on. Buyers may also want to include a personal letter about the home to show the owners they’re serious, or even an escalator clause to ensure that they can outbid any other offers the owner may receive.
Buying a home isn’t as difficult as it seems. By following these steps and the guidance of a skilled agent, anyone will be able to navigate the process in order to purchase a new home.