home buying process

In 2017, 5.51 million existing homes and 612,000 newly constructed homes were sold. While not all of them were sold to first-time buyers, when it comes to real estate, the more you know, the better deal you can get. 

The home buying process is long and complicated. There’s a lot of paperwork involved and it’s easy to feel stressed and overwhelmed, even when you have a fantastic realtor helping you through the process.

That’s why it’s beneficial to do some homework before you begin the process. There are things to look for when buying a house that can help you avoid costly mistakes. 

To help you out, we’re sharing seven steps for buying a house every buyer needs to know. Keep reading to learn what they are. 

1. Carefully View Property Disclosures During the Home Buying Process

A home is a major purchase. There are many things to consider when buying a house. The problem is that buyers tend to get so overwhelmed, they don’t ask enough or the right questions.

This is one area where you should never be afraid to speak up and ask every single question you have. It’s a huge commitment and you want to make sure there are no unpleasant surprises after the sale is complete. 

In most states, a property disclosure statement is required by law. Make sure you take the time to sit down with your realtor to go over this document carefully. 

Voice Your Concerns

This document shares any flaws that the home sellers and their real estate agents are aware of that can possibly negatively affect the home’s value. If you don’t understand something or you have concerns, speak up. 

Sometimes, the seller may share that at one point they had a bug infestation but hired an exterminator who took care of it. In other cases, you may be able to renegotiate the sales price to compensate for any risks you’re taking on when purchasing the home.  

2. Ask for Cosmetic Updates or Leftover Furniture

It’s not uncommon for sellers to leave certain things in the home they’re trying to sell. They may leave furniture to make the home feel more appealing than an empty home would.

Sometimes there are minor cosmetic updates like painting a wall or replacing a pipe that is easy and simple enough for the owner to undertake. It can’t hurt to ask. 

Often, sellers are more than happy to leave their furniture as part of the deal because they don’t use or needs those items anymore. They also don’t want to have to pay to have the furniture or items removed.

And this is great for home buyers who are already putting a huge chunk of their money into buying a home. It’s a great way to save money buying new patio items, air filters, or other items they would normally need to purchase.  

Talk to your loan officer before including items of personal property in the purchase contract since this might not be allowed.  Appliances and window treatments are almost always allowed; furnishings, televisions, and lawn mowers are examples of personal property and might need to be negotiated for outside of the real estate contract.

3. Be Prepared to Walk Away When You See Red Flags

Falling in love sometimes means people put on blinders. They don’t see the red flags in front of them because they are too in love.

Whether it’s a person or a home, red flags should never be ignored. If you discover major defects in a home and the seller isn’t willing to negotiate a better deal, it’s smarter for you to walk away.

Otherwise, you end up spending a lot more money than you should have on a home that’s destined to fail you. 

Pre-Approval Doesn’t Always Mean Final Approval

And don’t think that a pre-approval letter means you’re qualified to purchase a certain home. The underwriter has the final say regarding your qualifications and you may get turned down if all the conditions of your approval can’t be met, including a satisfactory appraisal.

There are times you may not know that your loan wasn’t approved until a few days before you’re ready to close when the underwriter gives a final review. This is hugely stressful.  Make sure you are working with a very experienced and highly reviewed mortgage lender who can spot potential issues early in the process, such as high monthly HOA dues that could push your debt ratio out of line.

If you find that you can’t get the type of financing you were initially qualified to receive or that the new terms being offered aren’t acceptable to you, walk away. You don’t want your dream home to turn into a living nightmare. 

4. Talk to Your Realtor About What They Can Negotiate on Your Behalf

One of the steps in buying a house is finding a good real estate agent who can help you find a great house and negotiate a good deal. Except it’s important to realize that your real estate agent’s incentive is to have the deal go through. 

Negotiating the best deal possible may not happen unless you specifically ask your realtor to do that. Make sure you ask your realtor to handle everything you want them to directly.

Do not assume they will do something for you unless you ask. And the worst thing that happens if you ask is that the seller says no. 

Don’t miss out on great opportunities because you’re too afraid to bargain for what you want. That includes everything from having the house repainted, extending a move-in date, and even having the seller cover the closing costs. 

5. Get Involved in the Home Inspection

You’re never really going to truly understand what type of home you’re buying unless you get involved in the home inspection. Most of the time, it’s the buyer’s responsibility to hire a home inspector. 

Do a walk-through yourself before the home inspector arrives. Make a checklist of everything you have questions or concerns about. 

Make sure you hire a home inspector who is a member of the American Society of Home Inspectors. Ask if you can follow him or her around during the inspection.

Ask questions if you don’t understand something. If the home inspector balks at you being present, consider it a huge red flag and hire someone else. 

Two Types of Home Inspections

There are two types of home inspections. The first is a standard inspection which is used to catch both big and small problems that need fixing. 

The second type of inspection is more specific and designed to target household areas such as the roof or bathrooms. A seller may balk at having a closer inspection done, citing it as unnecessary. 

However, in cases where the seller balks at the closer inspection, if something is found, you now have the leverage to decide between walking away or having it fixed for good. 

No Home is Problem-Free

The home inspection provides the buyer with crucial information that can hugely affect the price of the home you’re thinking of buying. However, you should also be aware that no home is perfect. There will be a few issues cropping up. 

And don’t forget that while it’s fairly inexpensive to fix a cosmetic issue, replacing a roof isn’t as cheap. And while you may be able to get a discount on new kitchen cabinets, don’t forget that labor can often triple the cost of a renovation project. 

6. Get a Home Warranty

It’s quite common for a seller to pay the premium for a home warranty up front. The seller just has to pay the premium at closing and costs are usually between $450-$600. 

Most sellers are willing to pay the premium for at least the first year, which includes any repairs related to the home inspection report. 

You, as the buyer, are then responsible for the deductibles that come with any claims made. 

A homeowner’s warranty covers repairs for big-ticket items such as heating and air systems, appliances, and plumbing.

Don’t Ignore Seemingly Small Problems

Always insist on negotiating anything that is safety related. Even small problems can turn into large issues if they’re ignored. 

A slow drain that an inspector thinks is due to just a clog may turn out to be caused by tree roots in the drain. If caught early, you as the buyer can negotiate a lower price which you can then put towards getting the work done. 

If not caught until it’s too late, a small problem that can be fixed for under $1,000 can turn into a huge, costly liability. 

7. Read Any HOA Rules Before Buying

Most buyers want to know what to look for when buying a house but they often don’t bother to look through the Homeowners Association rules before they purchase their home. 

While some HOA rules are basic, others are very strict and in many cases, if someone chooses to ignore the rules, they’re fined. 

Once your bid to purchase a home has been accepted, you are legally entitled to receive a copy of the community’s covenants, conditions, and restrictions. You typically have between three and 10 days to review this information.

You Can Ask for Changes or Back Out

It’s best if you review the Covenants, Conditions, and Restrictions with your real estate agent who can help you understand all the rules and regulations. During that period of time, if you notice any overly restrictive rules that you feel you can’t abide by, this is the time to bring up your concerns with the HOA or condo board.

You can also back out of your contract fully and receive your full deposit back. While this may seem extreme, keep in mind that it’s much nicer to belong to a neighborhood where you share the same values with your neighbors rather than living in fear that one of them may squeal on you for hanging your wet laundry outside to dry. 

Talk to Your Mortgage Broker

Many buyers need to obtain a mortgage as part of their home buying process. Make sure you work with a broker who is willing and able to answer any and all of your questions.

The more you understand your financial situation, the easier it is to find the perfect home within your price range. We can help.

Click here to contact us or start your application process.  

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