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Lex Spaeth
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10 Steps to Buying a Home

Understanding how to find and finance the perfect home for you

Buying a house requires a lot of time and effort, but these 10 steps can help make the home buying process manageable and help you make the best decisions possible.

Step 1: Start Your Research Early

As soon as you can, start reading Web sites, newspapers, and magazines that have real estate listings. Make a note of particular homes you are interested in and see how long they stay on the market. Also, note any changes in asking prices. This will give you a sense of the housing trends in specific areas.

Step 2: Determine How Much House You Can Afford

Lenders generally recommend that people look for homes that cost no more than three to five times their annual household income if the home buyers plan to make a 20% down payment and have a moderate amount of other debt.

But you should make this determination based on your own financial situation. Use our Affordability Calculator to see how much house you can afford.

To help you save for your down payment, try Discover Bank’s Auto Savers Plan, which makes it easy to put aside money each month.

Step 3: Get Prequalified and Preapproved for credit for Your Mortgage

Before you start looking for a home, you will need to know how much you can actually spend. The best way to do that is to get prequalified for a mortgage. To get prequalified, you just need to provide some financial information to your mortgage banker, such as your income and the amount of savings and investments you have. Your lender will review this information and tell you how much we can lend you. This will tell you the price range of the homes you should be looking at. Later, you can get preapproved for credit, which involves providing your financial documents (W-2 statements, paycheck stubs, bank account statements, etc.) so your lender can verify your financial status and credit.

Step 4: Find the Right Real Estate Agent

Real estate agents are important partners when you’re buying or selling a home. Real estate agents can provide you with helpful information on homes and neighborhoods that isn’t easily accessible to the public. Their knowledge of the home buying process, negotiating skills, and familiarity with the area you want to live in can be extremely valuable. And best of all, it doesn’t cost you anything to use an agent – they’re compensated from the commission paid by the seller of the house.

Step 5: Shop for Your Home and Make an Offer

Start touring homes in your price range. It might be helpful to take notes (using this helpful checklist) on all the homes you visit. You will see a lot of houses! It can be hard to remember everything about them, so you might want to take pictures or video to help you remember each home.

Make sure to check out the little details of each house. For example:

  • Test the plumbing by running the shower to see how strong the water pressure is and how long it takes to get hot water
  • Try the electrical system by turning switches on and off
  • Open and close the windows and doors to see if they work properly

It’s also important to evaluate the neighborhood and make a note of things such as:

  • Are the other homes on the block well maintained?
  • How much traffic does the street get?
  • Is there enough street parking for your family and visitors?
  • Is it conveniently located near places of interest to you: schools, shopping centers, restaurants, parks, and public transportation?

Take as much time as you need to find the right home. Then work with your real estate agent to negotiate a fair offer based on the value of comparable homes in the same neighborhood. Once you and the seller have reached agreement on a price, the house will go into escrow, which is the period of time it takes to complete all of the remaining steps in the home buying process.

Step 6: Get a Home Inspection

Typically, purchase offers are contingent on a home inspection of the property to check for signs of structural damage or things that may need fixing. Your real estate agent usually will help you arrange to have this inspection conducted within a few days of your offer being accepted by the seller. This contingency protects you by giving you a chance to renegotiate your offer or withdraw it without penalty if the inspection reveals significant material damage.

Both you and the seller will receive a report on the home inspector’s findings. You can then decide if you want to ask the seller to fix anything on the property before closing the sale. Before the sale closes, you will have a walk-through of the house, which gives you the chance to confirm that any agreed-upon repairs have been made.

Step 7: Work with a Mortgage Banker to Select Your Loan

Lenders have a wide range of competitively priced loan programs and a reputation for exceptional customer service. You will have many questions when you are purchasing a home, and having one of our experienced, responsive mortgage bankers assist you can make the process much easier.

Every home buyer has their own priorities when choosing a mortgage. Some are interested in keeping their monthly payments as low as possible. Others are interested in making sure that their monthly payments never increase. And still others pick a loan based on the knowledge they will be moving again in just a few years.

Step 8: Have the Home Appraised

Lenders will arrange for an appraiser to provide an independent estimate of the value of the house you are buying. The appraiser is a member of a third party company and is not directly associated with the lender. The appraisal will let all the parties involved know that you are paying a fair price for the home.

Step 9: Coordinate the Paperwork

As you can imagine, there is a lot of paperwork involved in buying a house. Your lender will arrange for a title company to handle all of the paperwork and make sure that the seller is the rightful owner of the house you are buying.

Step 10: Close the Sale

At closing, you will sign all of the paperwork required to complete the purchase, including your loan documents. It typically takes a couple of days for your loan to be funded after the paperwork is returned to the lender. Once the check is delivered to the seller, you are ready to move into your new home!

Moving your household may have an impact on your family. You’re faced with finding a home in a new neighborhood, packing all your possessions and adjusting to the new environment. Even if you move within the same city, you may still face adjustments.

Choosing a neighborhood that is a good fit for your family may be one of the more important life decisions you will make. It can impact the schools your children will attend, the social networks you engage in and the number of hours you’ll spend each year in your commute to work.

Regardless of your family structure and specific needs, the neighborhood you choose may impact your overall quality of life and your day-to-day and long-term satisfaction.

Get Familiar with the Neighborhood

When selecting a new home, the Internet is a huge asset. Data on sale prices, floor plans, schools and general location information is easily accessible. You can also view pictures and videos of potential properties online.

However, the Internet is limited to a two-dimensional perspective. Even with 3D web neighborhood images, it may be impossible to get an accurate feel for a potential neighborhood. There is no substitute for a hands-on approach. You may want to walk or drive around the area to give yourself a three-dimensional look at the community you’re considering.

Spending time in the new neighborhood gives you a helpful perspective. Do you notice long-term road construction, barking dogs, a nearby airport or other factors that might impact your quality of life? Are people painting, planting flowers or working on other home projects, indicating pride in home ownership that will also maintain home resale values? These clues may support assessing whether the neighborhood is a good fit for your lifestyle needs.

Why Meet the Neighbors Before Buying a Home?

A Realtor may help locate communities near your work, school and other important destinations. Your initial impression of these areas may help narrow down possible neighborhoods.

After selecting a few locations that appeal to you, one suggestion is to make a physical inspection. Exploring the neighborhood from sidewalk level allows you to observe features you may not notice from a car.

Walk along several of the streets at different times of the day.  If it’s cold, drive around in your car.  Are people walking their dogs?  See if neighbors are outside during daytime hours and homes are lit up in the evening.

Determine whether your observations match the type of neighborhood you are looking for. Does it seem that most of the people are retired? Are there many children playing or riding bikes? Walk the routes you and your family would take if you lived in the neighborhood, such as to the bus stop, school, stores or activity center, to be sure you’re comfortable with the surrounding area.

If people are outside, introduce yourself. Conversations may give you a sense of what the neighbors are like and what they think about the area. Current residents can provide relevant and honest recommendations since they understand the importance of the decision to buy a home in a new neighborhood.

If you see a sign for an upcoming homeowners’ meeting or neighborhood gathering, consider attending. Look for community Facebook groups. These venues may offer a sense of what is important to the neighbors based on issues they discuss.

Meeting a few neighbors and spending time in a prospective locale is part of the due diligence that may help build your confidence in your decision on a specific neighborhood. Could you see these people as members of your future support system?

When you buy a home, you’re not just getting what’s contained within the boundary of your property and the walls of your house, you’re buying a slice of the people, activities and culture of your new neighborhood.

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About Lex Spaeth

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Lex Spaeth

Realtor

lexspaeth@gmail.com

916-527-8700916-527-8700 main

NewVision Realty Group

951 Reserve Dr, Suite 140 Roseville CA 95678

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