The process of buying a home will probably seem very complicated for first time home buyers. Unfortunately it’s not as simple as finding something you like and putting it on your credit card. Here are 7 steps for buying a home, according to Zillow.
Seven Steps to Buying a Home for a First time Home Buyer
The first step is making an offer. This means you must sign a legally binding contract and believe it or not, there is a lot that goes into this one small step. Your signature, first time home buyer, means you’re committing to moving ahead with the seller. However, you can add contingencies to the contract in case anything goes awry. For example, most homes are contingent on a property inspection. A contingency allows you to opt out of said contract if any issues or concerns arise.
Seems pretty straight forward, right? Well, there are some things to keep in the back of your mind while making an offer. According to another article from Zillow, don’t assume you can get the price down AFTER making an offer. It doesn’t work that way. Your best bet is to put down your best offer and hope for the best.
The second step for a first time home buyer is to be aware of disclosures. Most states legally require sellers to provide buyers with disclosure documents, copies of city reports, a preliminary title report and copies of any specific local documents. In some parts of the South, especially in Florida near the Gulf coast, buyers usually receive flood maps.
Sellers must also disclose any known issues that could affect the home’s value or habitability.
Usually, sellers must answer a series of “yes” or “no” questions about the property, the neighborhood and their experience there. If there have been leaky windows, violations from the city, work done without permits or plans for a major nearby development, according to the first article from Zillow.
Everything that could potentially be wrong with the property should be out in the open before the buyer officially owns the property.
The third step is the appraisal. An appraisal is the financial institution’s way of making sure you’re paying the right price for the home. The lender sends out a third-party appraiser (which the buyer pays for) to make sure the contract price is equal to the neighborhood’s comparable sales. The bank can deny the loan or change the terms if it is not comparable to other for sale homes in the neighborhood.
The fourth step is the property inspection. The most common type of property inspection is the general property inspection. This means the inspector will check the home’s foundation all the way up to the home’s roof, while also making sure all major systems and components are in check. If you’re a first time home buyer, it’s a good idea to ask the inspector questions or follow along with him so you can have a better feel for the property you’re about to spend the rest of your life in.
Sometimes the inspector will recommend additional inspections and it’s a very good idea to listen to them. Remember, if anything unexpected arises during a home inspection, you can still opt out of your contract.
The fifth step is loan approval. This step means that the bank must approve your credit, debt and income history. The bank must also make sure there are no liens against the property, which could affect its value. The bank can take up to 30 days to complete its review. Once the review is done, you will be guaranteed a loan.
The sixth step is the final walkthrough. During the final walkthrough, you should make sure everything is the way it was the last time you saw it. Make sure there is no garbage or debris lying around. Also, make sure no light fixtures or anything else was taken.
The seventh and final step is the closing. This is the last step. After this, you will have a home. How exciting! Before the official closing, your real estate agent should send over a closing statement, which will include the final closing costs and amount of money you need to bring.
The last and final step to buying a home is to celebrate! Congratulations if you’re a first-time home buyer and you just bought your new home.