Home buying checklist: Steps to follow before making a purchase

There are a few defining moments in any person’s life. Graduating high school, graduating college, getting a new job — these are just a few of the milestones that you might face in your early life. For many people, the next few might include starting a family, buying a car, or perhaps buying a home.

Buying a new home might seem like a daunting task when compared to many other major milestones in life. As soon as you start the process, it can be easy to become quickly overwhelmed with all the different questions you may have, criteria to consider, and decisions to make. To help you out, here is a list of actions that you should consider during the home buying process.

Determine your budget

Assess your financial situation, including your income, monthly expenses, savings, and credit score. Take into account additional costs that may come along with a home purchase like down payments, closing costs, and moving expenses. By setting a realistic budget, you may have a better understanding of how much you can afford.

Obtain mortgage preapproval

If you are planning to finance the purchase of a new home using a mortgage, you may want to consider getting preapproval before you start your search. Getting preapproved for a mortgage may help you understand how much you may be able to borrow, and it might streamline the buying process. Contact a mortgage lender and provide them with your financial information for them to evaluate and issue a preapproval letter that indicates the loan amount you may qualify for.

Research neighborhoods

Everything starts with a little bit of research, so that is the very first thing that you should think about doing if you are looking to buy a house. Start first with searching for information about the area where you want to move.

When you are doing this, look into things like local schools, average house prices in the area, and proximity to important amenities (like stores, mechanics, doctors, etc.). Even consider how walkable the area is, or if you’ll need a car to get around.

You can also use an internet search engine to find local news about the area, and get an idea about what living in the neighborhood is like.

Research homes

Once you find some houses that you like, the research should not stop there. Now, you’ll want to determine certain information about the property before making an offer..

Here are some of the main things that you should check:

• Research the market — when would be good time to buy?
• When you find a specific house, look at similar properties in the area and compare prices.
• Review the square footage and cost averages based on that size.
• Find out why the current owner is selling — this could give you clues as to how flexible they might be on the price.
• Try to find out how much the seller paid, especially if they purchased the home recently.
• Look at trends for list price to sales price ratios.
• Ask for the home’s history and days on market (DOM).

Do a walkthrough

Typically, you should not make an offer without first having a walkthrough. But even one walkthrough might not be enough. Many people might fall in love with the first property they look at, and then forget to examine it more closely before buying.

Before you make your offer, see if you can do another walkthrough, and make sure that you look for anything you may have missed the first time. Check behind doors and under any staged furniture for any potential flaws or problems.

Check utilities

Your mortgage is not the only monthly bill that you will have to take care of, so make sure that you budget for more than just your regular mortgage payments.

It’s a good idea to have the sellers give you a utility estimate that you can review before making an offer.

Talk to the neighbors

Just as important as the home itself may be the people you’ll be sharing the street with. Try to talk to the neighbors and get a sense for the local neighborhood community. You might want to check for neighbors who seem noisy, or perhaps have a lot of pets, but keep in mind that you also might meet a few new friends!

Conduct a thorough home inspection

Once you start the process of making an offer, you should be able to get the house inspected by a professional. This is important, as you need to know of any repairs that you will have to take care of, as well as estimates for those or any potential remodeling costs. You may also want to get the house tested for dangerous things like asbestos or lead-based paint.  Many people believe that the inspector is hired by the real estate agent or lender, but it’s important to know that you can hire any inspector you want.

Give yourself options

No matter how much you love a house, sometimes it just doesn’t work out. As a result, it’s important not to get too attached to one property. Make sure that you have second and third options in mind for possible houses. It’s also best not to take the first house you see unless you take the time to examine it closely for any potential problems.

Review the purchase agreement and get legal advice

It may be worth talking to an expert in real estate transactions before signing a purchase agreement. First, a lawyer can help make sure that your offer is reasonable (not too high or low). Then, they can help you to sort out a good contract.

Arrange financing and secure homeowner’s insurance

Work closely with your mortgage lender to finalize your loan application and secure financing for your home purchase. Additionally, obtain homeowner’s insurance to safeguard your property against unexpected events, such as fires or natural disasters.

Close the deal

The closing process may involve things like: signing all the necessary documents, paying the closing costs, and transferring ownership. It may help to hire a reputable title company to handle the closing procedure and ensure a smooth transition of ownership.

Move in and celebrate!

Congratulations! After completing all the steps involved in purchasing a home, it’s time to move in. Plan your move, arrange for utilities to be set up, update your address, and take time to celebrate this significant accomplishment.

Closing thoughts: Steps in buying a home