Homebuyer’s Timeline: 6 Steps to Your New Home

Homebuyer’s Timeline: 6 Steps to Your New Home

Sure, buying a house—especially your first house—is going to be a stressful process but it doesn’t have to be as overwhelming as many buyers make it out to be. Unnecessary anxiety can be avoided by taking some time beforehand to establish a plan and approximate timeline. This kind of planning will save you time in the long run, it’ll help you paint a clear picture of what you want—and need—in a house, and it’ll corral all the resources you’ll need to make everything come together by the end of closing.

If you’re anxious to get started, here’s a quick checklist to summarize the timeline below:

  1. Calculate how much house you can afford get pre-qualified for a loan
  2. Debate the advantages and disadvantages to buying versus building
  3. Enlist help from a trustworthy real estate agent and an experienced broker
  4. Visit open houses and prioritize your new home checklist
  5. Finalize an offer you’re comfortable with under conditions that are important to you
  6. Inspect, appraise, and survey the house before closing

1. Calculate what you can afford

Hopefully, you’ve already built up your credit score and started saving money for a down payment. A credit score of 620 is often required by lenders to buy a house, although, there are some options out there if yours is below that benchmark. You’ll hear 20% when you ask how much of a down payment is needed but this is difficult to do. The bottom line is that you’ll want to put as much cash down upfront as possible.

You’ll also have to be pre-qualified for a certain amount of money ideally before you start house-hunting and definitely before you can put in an offer. This pre-qualification process should also help you narrow your choice of mortgage lenders.

piggy bank

Calculate what you can afford

After you’ve crunched the numbers, you can start asking yourself what you want, but more importantly, need in a house. Consider the basics, like the amount of space you’ll need. If you live independently, you’ll likely only need a one-bedroom house but having a guest room would making your living space more flexible. If you and your spouse will be expecting children in the near future, you’ll need a house that you can grow into rather than out of.

Also think about the amenities. If you have a dog, you might prioritize a house with a fenced-in backyard. If this is your first house, you’ll probably want to look at homes with appliances—such as a refrigerator and washer and dryer—included.

Remember that you’re not limited to existing houses on the market. Many buyers overlook the possibility of building a house. Depending on your circumstances, this might be the best option for you. Take advantage of all of your options available and allow yourself to keep the full scope of possibilities in mind. It might not be a bad idea to weigh the pros and cons of both new construction and resale home options.

 

Buy or build

Plans for a new house

 

3. Build a team

Next, you’ll want to find the right team people to help you in your search and purchase. You’ll need a real estate agent and a lender. There are a lot of qualified realtors out there to help you, and they all have a different approach to how they can help you buy a home. Your agent is going to be your professional partner, so you want to make sure their values align with your own.

For example, make sure that your real estate agent is well-versed in the local area, builder’s contracts and the building process if you’re buying new construction. Or find an objective agent who won’t put their two cents in every time you tour a house unless you ask for their opinion. They should persuade you in your decision-making process but they should answer all of your questions honestly. It might be worthwhile to ask your realtor to walk you through the paperwork of an offer so you know what to expect when you’re ready to purchase.

Your lender should also be trustworthy, and you should feel comfortable asking them questions about your mortgage options and rates. A broker should be experienced and knowledgeable. It’s wise to set time aside to read customer reviews, ask friends and family for referrals, plus interview a few agents and lenders is sometimes necessary and a worthwhile investment of your time and money.

4. Start your search

Congrats! You’re ready to finance your purchase and start your search. At this point in your timeline, you’ve already figured out how much you can afford, where you want to be located, how much space you need, and the amenities you want in it so your options should be fairly narrow at this point. Your team of experts has been selected and is ready to navigate you through the market.

It’s important to ask as many questions as you can about each house you visit. In some cases, you’ll know if a house isn’t for you as soon as you walk in. In other cases, it’ll be a close runner-up to another house you like. A tie could be easily broken with answers to questions like how much HOA dues cost or what kind of upkeep the materials will require. For example, masonite siding, which used to be popular in the 70’s, must be checked for nail pops every few months otherwise it could rot from water damage.

5. Submit an offer

Once you’ve found the house, it’s time to make an offer. Some negotiation may be required at this time. You’ll want to write in conditions to your offer, like including appliances in the home sale as well as a home warranty if either are important to you. Fortunately, many sellers will agree to both but buyers must ask at the time of their offer. It’s often more difficult to move appliances, like a refrigerator, from one house to another. And most listing agents will encourage sellers to include a one-year home protection plan with the sale, which could cover the cost of major home repairs. This coverage often eases anxious buyers’ minds. If it’s a new build, a builder’s warranty can also be quite useful.

6. Under contract

Once the terms have been agreed upon and earnest money has been paid, it’s the buyer’s responsibility to do their due diligence by ensuring the home is in working order before they close. You’ll definitely want a home inspection and appraisal, but a survey is also highly encouraged. Note: these services and fees will come out of the buyer’s pocket, but they’re well worth the money.

A thorough inspection will show damage that you can request then ask the sellers to resolve. The appraisal will confirm how much the home is worth, which your lender will need. And the survey will ensure that the house is on its own property (sometimes fencing is actually on a neighbor’s property). In addition to these services, you can hire whoever you want to inspect the property, like asking an arborist about the health of a tree that’s leaning a little too closely to the house.

The last step to the process is about a half-hour worth of paperwork. This step can be overwhelming for first-time homeowners, as it can feel like you’re signing your life away. It’s important that your attorney explains every document to the best of their ability as you sign. Don’t feel intimidated or hesitant to ask questions at this final stage. It is your money and signature that you’re providing, so you should very much feel entitled and empowered to ask any question you want.

As you sign the very last contract, your realtor will hand you the keys to your new home and it’ll be time to pop the bubbly. As you open the door to your new home, the process will suddenly feel worthwhile. Buying a home can be easier and more enjoyable when you plan ahead.

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