As a tenant, you must have thought of owning a home on so many occasions.
You must have dreamt of building a well-structured and spacious home in an environment you love.
As you move towards achieving your dream, you wouldn't want to ruin it by making some mistakes in the process.
Buying a home requires you to be sufficiently knowledgeable about the process. And you need to be completely guided right from the first step as a first-time buyer.
You don't want to lose your hard-earned money over careless mistakes. And you don’t want to regret living in a place that doesn't fit your specifications, especially when you could have gotten a better option.
You will reduce the possibility of getting unpleasant outcomes by following the steps listed below.
This step is the first and the most important in the process. It will help determine if you will spend long years trying to offset some avoidable loans or if you will live in your home with absolute peace of mind.
You have to check your financial status thoroughly to find out which it will be.
While it's not out of place to obtain a mortgage loan, you should first check the possibility of acquiring a home with the money at your disposal.
Unfortunately, obtaining a mortgage loan may make you desire a home above your source of income. And you will have to struggle to pay off the loan and maintain your home when you fall into such a trap.
You can, however, apply for one if you discover that you will need to obtain a loan after checking your financial status.
Mortgage companies provide intending house owners the opportunity to own their houses by providing them with loans. However, mortgage companies operate slightly differently from each other.
These slight differences are in their interest rate, minimum credit scores, and down payment requirements. To increase your chances of getting a better deal, apply to as many companies as possible and research their terms and conditions (these terms and conditions are usually unique to each borrower).
The companies you apply to will run a check on your credit report, so get ready to reveal your financial status to your potential lender. The report will allow your lender to assess if you’re a low-risk or high-risk borrower.
If your credit score is high, it means you’re a low-risk borrower and, therefore, will have a lower interest rate. For this reason, you may want to review your credit report to put your records straight before applying for the loan.
When a mortgage company agrees to grant you a loan, they will give you a pre-approval letter to show your agent and intending seller. The letter indicates your lender's willingness to offer you a loan when it's time to close the deal.
Hiring an agent to assist you in searching for a seller will, no doubt, increase your expenses. But it's necessary.
Housing agents are knowledgeable about the law's position in property matters. Hence, they will guide you from making mistakes that will result in a legal crisis.
These agents are also knowledgeable about the various neighborhoods you’re considering. So, they will tell you the challenges you’re likely to face and the benefits you will enjoy from buying a house in a particular neighborhood.
When buying a house, you will also need someone to interpret the jargons in the documents presented to you by your seller. Hiring an agent means having a professional to interpret them for you and make negotiations on your behalf.
A good thing about hiring an agent is that you will get to choose from a wide range of houses within your budget and specifications. The more your options the better your chances of getting a good choice of house.
You may get swindled or end up spending valuable time and resources searching for a house if you decide to boycott the services of an agent.
If you're purchasing your house from a loan, you’ll need to present a copy of your lender's pre-approval letter to your agent. No agent will take you seriously without an assurance of your financial ability to purchase a home.
When searching for an agent, only look out for licensed agents so that you don't get duped by a supposed agent while you avoid being duped by your seller.
Inquire about the agent's experience in the job, knowledge of the neighborhood you want, and the mode and frequency of communication between the two of you so that you don't waste time unnecessarily in the process.
Home inspectors are professionals that carry out extensive checks on residential buildings for a buyer. They check for infrastructures such as the drainage system, electrical installations, plumbing system, and furniture to ensure that they are in perfect condition and do not pose dangers to the buyer.
They also conduct a thorough check on the walls, roof, ceiling, windows, doors, heating and cooling systems, and the structural components of the building.
Your home inspector will give you detailed reports of the condition of the house you are about to purchase. In cases where repairs need to be carried out, the inspector can help you coordinate the repairs.
Ask the inspector as many questions as possible to clear your doubts about anything you notice in the building. The information you get from them will help you determine the real worth of the house you're about to buy.
It's at this stage you should decide whether to terminate or continue with the deal.
Your home inspector can only help review the condition of your potential home in terms of safety and standard. You must consider other factors before making your final decision.
These factors include proximity to good schools, the calmness of the neighborhood, the availability of health facilities, and the closeness to grocery shops. Also, you might want to ask residents in the neighborhood questions about the place.
For example, ask about how expensive the utility bills are, how the utility providers operate, the security level in the neighborhood, and special laws guiding the neighborhood.
Having a personal survey of the neighborhood of your potential home will help you detect any exaggerations your agent might have made.
After assessing the worth of the house you intend to buy, make your offer known to your seller. Your agent will assist you in drafting your offer to ensure you factor in expenses such as the closing cost, taxes, repair fees, and association fees.
Some of these expenses are capable of increasing the cost of the house, and it's only wise you deduct them from the price you settle for.
Your seller's agent may receive the offer on your seller's behalf. Expect a continuous exchange of letters between your agent and your seller's agent until an agreement is reached. If your agent fails to reach an agreement, then proceed to the next house available for sale.
This process can be tedious, but it’s worth the stress if you must get a house that meets your taste and budget.
Closing the deal is a crucial moment in the whole process. It can be done by following the steps below.
At this point, you have to get approval for your loan (if you applied). Your lender may ask for documents such as your bank statement, tax returns, and some other financial record before they approve your loan.
An escrow account allows a third party to temporally hold the money for the transaction when closing the deal. Upon completion of the deal, the third party transfers the money to the seller. This kind of transaction is to maintain trust between you and your seller.
A real estate attorney will see through the legal process of closing the deal. This process includes preparing the documents needed to sign the deal and explaining the terms written in these documents.
Your attorney will also ensure that all fees such as your agent's fee, home inspector fee, and taxes on your house are paid at the closing of the deal.
Ensure you read through the pages of the document before you finally sign the deal. If you’re confused about any term or condition, your real estate attorney is there to guide you. Sign the document only when you've properly understood the document.
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