Congratulations on taking the plunge into home ownership! Buying a home is a huge investment, and there’s a lot to consider before you’re ready to sign on the dotted line.
Use this checklist to make sure you’re as prepared as possible.
1. Know your credit score and history.
Your credit score will give lenders an idea of how likely you are to repay a loan, and good credit history will make it easier to get approved for a mortgage.
If you don’t know your credit score, now is the time to find out. You can get a free copy of your credit report from each of the three major credit bureaus once per year at AnnualCreditReport.com.
2. Get pre-approved for a mortgage.
Getting pre-approved gives you an idea of how much house you can afford and strengthens your negotiating position when it’s time to make an offer on a home.
Mortgage pre-approval also speeds up the final steps of buying a home since you’ll already have most of the necessary documentation in order.
3. Save for a down payment.
You’ll typically need to put down 10-20% of the purchase price of the home in order to get a mortgage, so start saving now! In addition to your down payment, you’ll also need money for closing costs, which are typically 2-5% of the purchase price of the home.
4. Know what you can afford.
In addition to your down payment, you’ll need to factor in closing costs, monthly payments, insurance, and repairs when deciding how much house you can afford.
Once you’ve added all of these up, make sure your total monthly housing expenses are no more than 28% of your Gross Monthly Income (income before taxes are taken out).
5. Find a real estate agent you trust.
When buying a home, it’s important to have someone on your side who knows the ins and outs of the process and can help negotiate on your behalf. Interview several agents before making your decision—and be sure to ask about their experience with first-time buyers!
6. Get familiar with the market conditions in your area of interest BEFORE starting house hunting in earnest.
Pay attention not only to listing prices but also to trends in median sale prices, average days on market, and other measures. The better-informed buyer is often able to find not just any house but THE house.
7. Finally when submitting an offer request that any repairs identified during inspection be made by the seller prior to the close of escrow.
People often forget about this step since they’re so focused on getting their dream home but remember —you want to walk into a new home, NOT a project.
8. Track progress once an offer has been accepted all way through the close of escrow.
While the agent & escrow, the officer will be doing a lot of work to make sure to stay on top of everything & that deadlines are being met. Nothing worse than finding out at the last minute that something didn’t go according to plan & now may not actually close on time.;
9. Enjoy your new home! This should be one most rewarding experiences in life so savor every moment!
Check the image below for a printable version of the checklist.
Purchasing a home is a big milestone—but it’s not something you should rush into without doing your homework first. Use this checklist as a starting point to make sure you’re as prepared as possible when you start looking for your first home. And remember: the right real estate agent can be worth their weight in gold, so don’t hesitate to interview several before making your decision!