DEFINE BUDGET

The first thing you need to determine is how much you can afford to spend. Generally, your mortgage payment should not exceed 35% of your monthly gross income. Once you've defined your budget, it's time to look at your cash reserves.

PRE-QUALIFY

Get a lender to review your financial status by verifying your income and debt status. They will be able to tell you with confidence just how much house you can afford to buy based on the loan amount for which you qualify. Later, you can get pre-approved 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.

WISH LIST

It's the rare lucky person who finds the perfect home within their budget. Create a list of nice-to-haves and must-haves. This will help you remain focused on your goals and save you time. There's a big difference between needs and wants. One is a deal breaker, the other is not. If you find a house that meets all of your needs and some of your wants, you've probably found your new home. When creating your list of needs, focus on the things you cannot change.

FIND AN AGENT

Buying a home is probably one of the most significant investments you’ll ever make, and it’s important that you hire a knowledgeable agent to guide you through the process. You will be spending a fair amount of time with the agent, so it’s important that you pick someone with whom you feel comfortable and trust. 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.

EXPLORE ONLINE

You may be anxious to see houses in the flesh, but starting your hunt online can help narrow down your search and ultimately save you time and energy. A lot of listings have virtual tours, video content, and other features to help you screen properties. The goal here is to reduce the number of homes you have to visit.

GO SHOPPING

Drive around neighborhoods or subdivisions you like and get a feel for what it would be like to own a property in the area. Don't just focus on the home. Pay attention to the neighborhood as well. Does the house back up to a busy street? Can you hear the noise inside the home? Do the neighbors take care of the their lawns? Is there any major construction planned in the area? Remember, neighborhoods affect your property values.

ATTEND OPEN HOUSES

Look out for any potential red flags. Chat with a neighbor to get a sense of the community and its residents. It might be helpful to take notes on all the homes you visit. You will see a lot of houses. It can be hard to remember everything about them

PRESENT OFFER

You want the best possible deal, but it’s not always easy determining how much to offer, especially in the face of constantly changing market conditions. You don't want to low-ball your offer, and risk losing the home to another buyer or insult the seller — but you also don't want to pay more than is necessary.

NEGOTIATE

There's no foolproof system for negotiating a fair price. Sometimes the seller’s agent will submit a counter offer, at which point you have the option to adjust your offer.

ESCROW

You also need to make a good-faith deposit — usually 1% to 10% of the purchase price — that should be deposited into an escrow account. The seller will receive this money after the deal has closed. If the deal falls through, you will get the money back only if you or the home failed any of the contingency clauses.

SOLIDIFY FINANCING

Call your mortgage broker or lender and move quickly to agree on terms. This is when you decide whether to go with the fixed rate or adjustable rate mortgage and whether to pay points.

INSPECT

This is usually a buyer’s cost. Within a few days of your offer being accepted, an inspector will evaluate the property for structural, electrical and plumbing issues. You are able to renegotiate your offer or withdraw it without penalty if the inspection reveals significant damage.

WALK THROUGH

Verify the house you are moving into is in the same condition as when you agreed to buy it, less normal wear and tear. Another inspection costs money, but identifying issues before you reach the closing table can pay off in the long run.

CLOSE

Once your offer has been accepted and your inspections completed, you will need to begin the processing of your loan. As you can imagine, there is a lot of paperwork involved in buying a house. When this is all completed, you’ll attend the closing, or settlement. The closing is the legal transfer of ownership from the seller to you. 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. As long as you have clear expectations and follow directions, closing should be fairly painless.

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