Purchasing a home is among life’s greatest milestones. But such a big buy requires careful preparation, especially in the current seller’s market.
The first step most prospective homebuyers take when searching for a new property is to contact a reputable real estate agent. These professionals have valuable insight into homes in your desired area and can tap into their networks to expand the options available to you.
Still, finding a real estate agent is just the beginning. And it doesn’t mean you can skimp on doing your own research. Browsing the market on websites like zillow.com can give you a better idea of home prices in your target neighborhood as well as the types of houses and features you’re likely to find. This preliminary research will help you prioritize your wants and needs, as well as streamline the search process with your realtor.
Keeping in mind your budget for the purchase, you’ll need to work with a lender to get prequalified for a mortgage – a key move that will allow you to act quickly when you do find a house you love. If you’re not sure how to start this process, begin by contacting your financial advisor. Not only can they provide you with a comprehensive overview of your financial landscape, they can also connect you with a mortgage lender to guide you through the homebuying process.
Once you’ve identified a lender, the next step is usually to get a prequalification letter stating the amount they are tentatively willing to lend to you. This will help distinguish you as a more serious buyer to sellers. Here are a few additional points to discuss with your lender:
As soon as you’ve ironed out these details, you’ll be ready to explore your mortgage options, including:
You prequalified for a mortgage and found a home that checks all your boxes. Now it’s time to make an offer. This is when all of your research can prove particularly handy.
There’s often a sense of urgency during the negotiation process. Your real estate agent might encourage you to make a competitive offer and to act fast so another buyer doesn’t beat you to it. But before committing to an offer, it’s crucial to thoughtfully consider the value of the house by taking into account details such as:
While weighing these factors, you might feel pressured to meet the seller in the middle, particularly if their asking price is overinflated. You might also hear pointed questions like, “Is losing this house really worth saving $2,000?” But consider how those points can apply to the seller as well.
Whether you feel pressure from your realtor, the seller or other buyers, resist the urge to act hastily. Instead, lean on what you learned from your initial research so you can confidently negotiate a fair price.
Once your offer for a home is accepted, you’ll need to schedule an inspection and an appraisal to ensure you’re getting the home and the value you’re seeking.
While some people have mixed feelings about appraisals, and some buyers are tempted to rush through this step, appraisals have become standard procedure to confirm a home’s value. This protects both your mortgage lender and you, the buyer.
Ultimately, appraisals, which are ordered by the lender on behalf of the borrower, can help you negotiate a fair price. And a thorough inspection can help you avoid costly surprises down the road.
You’ve finally reached the last stretch of the lengthy homebuying process. Here, you’ll work with your bank to finalize all of the necessary paperwork to close on your house.
Buying a home can be a time-consuming and emotional process. But being prepared without cutting corners is the best way to ensure you get the home you’ve always envisioned – one where you can put down roots for years to come.
Ready to take the first step? Reach out to your advisor. They can connect you with a mortgage lender who can help you explore your homebuying options.