We have followed the steps to prepare and are pre-approved. Now comes the fun part, shopping! If you haven't done so, you’ll want to decide how many bedrooms and bathrooms you prefer as well as the overall size of your ideal home. You don’t need to worry about every nook and part of the home, but understand that an average two-bedroom home in the U.S. is between 1,600-1,800 square feet. A “small” house is less than 1,000 square feet. While a “large” house comes in at 3,000 or more square feet.
As you start shopping, you’ll want to make a buying a house checklist, like this sample from First AM Home Warranty. This will help compare as you continue your search.
Watch out for these red-flag items, which come with varying, but sometimes significant costs to repair or replace if you make an offer on the house:
Roof – look for shingles that are curling or peeling.
Windows – are they clear, or do they show evidence of moisture or fog between the panes? Are they single- or double-pane?
Furnace – is there a sticker indicating it’s been serviced regularly? Is it more than 15 years old, and is it working?
Air conditioning – is it more than 15 years old, and is it working?
Water Heater – is it more than ten years old? Is there any rust or calcium build-up around the base?
Flooring – look at the floor’s condition and determine if it can be cleaned up or if you’ll need to replace it before moving in.
Paint – how has the paint held up, both interior and exterior? Is it dirty but solvable with good cleaning, or will you need to repaint?
Attend open houses and home tours
Watch the ads for open houses and start visiting those homes that fit your criteria. If they are in your chosen location, that’s ideal but not essential. Open houses outside of your desired location can be considered test houses, which will at least give you an idea of what’s on the market in your price range. You can also attend virtual home tours if you don’t have the time to make it out to a house you want to look at. These tours can help you identify the type of home you like, the layout you want, and the features you want or don’t want in your home. Sometime we don't know what we want until we see it!
Make An Offer
You’re pre-approved(we did that earlier in the process) and you have found your home. Now, it's time to make an offer. Your real estate agent will help you complete the offer to make sure you’ve included all the important details in your offer – timing, exclusions, contingencies, etc. Your offer goes to the seller’s real estate agent, and the sellers decide if they agree with your offer price and terms.
Negotiate the Offer
Your real estate agent can help you determine what to include in the offer. They can also help guide how you should respond to a counter-offer when the seller didn’t agree to your first offer, but they didn’t reject it outright. At times, sellers may counter some or all of the requests in your offer. You can determine whether you can go along with the counter-offer items and if you’ll counter back. Once you’ve come to terms and the seller accepts your offer …. congratulations, you’ve purchased a house!
Schedule a Home Inspection
You should select your home inspector to walk through the home to ensure there are no major repair or system issues. They will check that the plumbing, electrical, and fixtures (like windows) are all up to code and make sure there are no maintenance issues. Your lender may require all of this to close the loan, and your realtor can help you set it up. Remember, you select your inspector. Interview and ask questions on their processes and what is included.
Get the Home Appraised
Your lender will order an appraisal, at your cost, to determine if the value of the home is equal to or less than what you offered to pay. There may be several factors at play here, but typically the offer and appraised value should be close for your lender to finalize your home loan. Every lender differs on their specific criteria. If the home does not appraise for the purchase price, you will have to renegotiate the sales price as your lender will not issue the loan if the home does not meet the value. Closing Day
Your lender has approved funding your loan and now, you can close on your home. Exercise your hands because you are going to sign a lot of papers! At closing, the money will be exchanged, and the deed will now transfer from the seller to you. You now officially own the home. There are many moving parts to consider when you’re looking to buy a house. You are now educated about the process and in a good position to assess your credit, apply for a loan, and successfully navigate the actual house purchase. The trip to home ownership may seem overwhelming, but with your house checklist in hand, you’ll be in control and be a homeowner in no time.