People purchased 842,000 homes in the U.S. during 2020.
Are you ready to become one of these statistics this year? If so, you might wonder about the steps to buy a home.
What are the main steps? What do you need to know as you begin the process?
Here is a guide to help you learn the main ten steps you must follow to buy a house from start to finish.
- 1 1. Analyze Your Financial Situation
- 2 2. Work on Getting Preapproved for a Loan
- 3 3. Select a Real Estate Agent
- 4 4. Shop for a Home to Buy
- 5 5. Write a Purchase Offer
- 6 6. Negotiate With the Seller
- 7 7. Notify Your Lender
- 8 8. Complete the Contingencies
- 9 9. Wait for the Underwriters to Complete Your File
- 10 10. Attend the Mortgage Closing
- 11 Follow These Steps to Buy a Home
1. Analyze Your Financial Situation
Before you can buy a house, you’ll likely have some steps that involve planning for this significant event. The first step is analyzing your financial situation.
Analyzing your finances involves examining several things:
- Your income
- Your debts
- Your credit score
- Your overall financial position
The purpose of completing this step is to see if you are ready to buy a house.
Do you have enough money to buy one? Can you afford to own a house? Is your credit good enough to get a loan?
These are the things you must consider before moving on to the next step.
2. Work on Getting Preapproved for a Loan
If you’re ready to get a loan to buy a house, you’ll need to work on getting preapproved for a mortgage loan. You’ll need to find a lender for this step, and you’ll have to complete all the steps they ask you to do.
The lender will ask you to fill out an application, and they will verify all your details. If they offer you a preapproval, they’ll give you more information about the loan.
They’ll probably tell you how much you can afford to borrow and how much your mortgage payments will be, approximately. They might also give you details about the required closing costs you will pay when getting a loan.
3. Select a Real Estate Agent
Next, you can begin searching for the right real estate agent. A real estate agent is a professional that helps home buyers and sellers.
When you hire one, that person will be your agent. They will help you find the right house and assist with every step required when buying a home.
You can choose any agent you feel comfortable hiring, and you can interview multiple agents before selecting the one you like the best.
4. Shop for a Home to Buy
The next step is shopping for a house, and this step involves touring homes for sale. You can look up “house for sale near me” to see if you can find any houses you might like. You can also ask your agent to find homes for you.
When you find homes for sale that interest you, your agent will schedule viewings for you to see them. You can view one house or dozens. It’s up to you, but you should shop until you find a house you absolutely love.
5. Write a Purchase Offer
When you are sure that you found the right house, you’ll know, and you’ll probably be eager to write up the purchase offer. Writing a purchase offer is exciting, but it’s also binding, so you must make sure you’re certain.
Your agent will help you write the offer and might suggest adding specific contingencies. For example, you might want to get a home inspection before closing on the house. If so, you can add a home inspection contingency.
You can add many others, too, and you should ask your agent to help you decide which to add.
6. Negotiate With the Seller
When the seller receives your offer, they can respond in one of three ways:
- Accept the offer exactly as it is
- Counter the offer
- Reject the offer
If they accept the offer, you won’t have to negotiate. If they reject your offer, you could submit a new offer if you really want the house. You would have to improve the offer substantially, though, in this case.
If the seller counters the offer, you can begin negotiating with them to try to reach a mutual deal. Negotiating might be quick and simple, or it might take some time and have some challenges.
7. Notify Your Lender
Your lender will need to know when you reach a deal with the seller. The lender must know what house you are buying, the price you agreed upon, and the other details of the arrangement.
When you notify your lender with this information, they’ll begin working on your loan.
8. Complete the Contingencies
During this time, you might have some steps to complete. For example, if you included some contingencies on the purchase offer, you might have to work on them.
You might need to hire a home inspector to complete the inspection. You might be responsible for hiring the appraiser and other inspectors. You’ll need to complete all these things before you can close on the purchase.
9. Wait for the Underwriters to Complete Your File
When you get everything done and your lender finishes working on your loan details, the lender will send the file to the underwriting department.
Underwriters are people who sift through every detail of a real estate transaction to ensure that there are no problems or mistakes. If the underwriters don’t find any issues, they’ll approve the loan.
10. Attend the Mortgage Closing
The final step of buying a house is attending the mortgage closing. At the closing, you will sign documents for the home purchase.
Some of the documents are for the loan you are taking to buy the house. The other documents are for the transfer of the home title and deed from the seller to you.
Closing on the loan is the last step of the process, and you’ll walk out of this appointment with the keys to your new home.
Follow These Steps to Buy a Home
If you hope to buy a home soon, you’ll know exactly what to do. Just follow these steps to buy a home, and before you know it, you’ll be moving into it.
Did you enjoy learning about the home-buying process? If so, you might like other articles on our site, so check it out today.