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Buying a house is a exciting, yet complex, process. If you're not sure where to begin, read on! This page will outline what you need to know about how to buy a house, step by step.
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Managed Since: 08/31/2009
Views: 203
Money Earned: M$7.68
Page revenue is subject to change as we obtain data from our partners
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Home Buying Tips
CNN's personal finance editor and author Gerri Willis discusses what you need to think about before buying a house. She advises that the your housing costs hold be less than 30% of your income, and that you should put down 20% as a down payment, if possible. Willis also recommends you begin your search online to get an idea of what prices are in your area. -
Introduction
Investing time upfront, before you begin searching for a house, can help make sure you're happy with the home you buy. Think about what you need in a house, how much you can afford, and anything else that will constrain your purchase. You'll then need to find a house, and hire professionals to help advise you through the process. -
Step 1: Determine Your Needs
Everyone's needs are different. Take some time to objectively lay out what you're looking for before you begin touring houses. Although you may modify your list as your search proceeds, keeping an objective list of needs in black and white will help keep you focused.
What Do You Need in a House?
You'll want to consider size, location, and amenities. Some people may want a small house within walking distance to schools and shops, while others will want enough land to keep a horse. Think carefully about your current and future needs.
How Much Can You Afford?
This is probably the toughest consideration. When you go to the bank for a mortgage pre-approval, they'll give you a figure which may or may not be realistic for you. Look carefully at your budget, and determine what you can comfortably pay for a house. Consider any anticipated changes. For example, if you are a two income family who is anticipating that one parent will eventually stay home with a new baby, you may want to base how much you can afford on one income.
Any Other Requirements?
There are other things you may need to think about when looking for a house, including:
- Do you work at home? If you see clients at home you may need to ensure that the zoning will accommodate this.
- If you anticipate caring for elderly parents at home, you may need a house in a community that permits in-law apartments.
- Are you concerned about the availability of alternative energy sources?
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Step 2: Bring in the Professionals
Most people use a real estate agent to buy a house. Agents are usually well acquainted with all the professionals you'll need to buy a house. If you are purchasing it without an agent, you'll want to make sure that you have retained a real estate lawyer, a mortgage broker, and a home inspector. -
Step 4: The Process of Buying a House
After you find a property to buy, you'll go through a fairly standard process to purchase it.
- The first step is to make an offer, which is usually accompanied by a small deposit as a show of good faith.
- The offer can be accepted, or rejected. If it's rejected, you may go through a counteroffer process with the seller.
- After the offer has been accepted, you'll enter into a purchase and sale agreement with the seller. In some states the Purchase and Sale is contingent on the inspection; in others the inspection happens prior to the purchase and sale. The purchase and sale will generally require a deposit equally to 5-10% of the purchase price.
- The inspection may highlight additional issues that need to be addressed, and the purchase and sale may need to be amended.
- Occasionally serious problems with the house are uncovered during the inspection that may cancel the sale.
- The closing process usually happens 30 days after the purchase and sale.
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Step 3: Find a House
You can find a house in a number of ways.
- Real estate agents are the traditional choice. Many have online websites with videos and photos of homes that allow you to pre-screen houses from the comfort of your home.
- People who are selling homes without a broker advertise in newspapers, on Craigslist, and through their own websites.
- Friends, family, and business associates may know of people who are planning to move, but haven't yet placed their home on the market.
- Banks have inventories of foreclosed properties they are looking to sell.
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