Buying a house should be a time for anticipation and celebration of all the hard work and planning that have brought you this far. To keep things simple, we've compiled the only house buying checklist you're likely to need, as you prepare, shop for, and purchase the house you've waited for. Refer back to this house buying checklist whenever you feel a little lost, or just to track your progress. Remember that every house purchase is different, and some of these checklist steps may fall in a slightly different order for you than they do for your neighbor.
1. Prepare financially
- Make sure your credit score is high enough, usually above 620 at least. According to Bankrate, this is the minimum your score needed to avoid unreasonable rates and fees.
- Save up enough for a down payment (3%-20%), closing costs (2%-5%), and an emergency cash cushion (4-5 months of mortgage payments).
2. Shop for a mortgage
- Check with local credit unions for some of the best rates around.
- Try to lock in a pre-approval with the lender before shopping for houses.
"Sellers like pre-approved buyers because there’s less risk the deal won’t go through."
3. Find a real estate agent
- You can find local realtors on websites and at open houses, but Realtor says that often the best place to start is by asking friends and family to recommend someone they trust. You can also ask your lender which realtors they like to work with.
- Interview several real estate agents before you choose the best one for you. Realtor advises, "These interviews represent a good opportunity to consider such issues as training, experience, representation and professional certifications."
4. Shop for houses
- Know your ten-year plan. How many children will you have? Dogs? Home office? Are you fine with the kids sharing rooms? Look for both efficiency and accommodation for your present and future lifestyle.
- Trust your intuition. Pat Trainor, a seasoned realtor, says it's helpful to ask yourself, "“Is this a happy house? Or does it depress me? Notice how you respond—and trust your reactions."
- Visit the neighborhood morning, noon, evening and night, to see how traffic and noise change over the course of the day. Do you feel safe?
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5. Make an offer
- Write a formal offer to buy the home you like from the seller, with help and advice from your real estate agent or broker.
- Negotiate an agreeable price.
- Sign a real estate contract, promising to keep moving forward with the seller if all conditions are met. Zillow Real Estate clarifies, "Keep in mind you can add contingencies to many real estate contracts. For example, most real estate buying offers will be contingent on property inspection, as well as disclosure review, loan approval, appraisal and other matters."
6. Hire an inspector
- Look for an inspector with a solid reputation and an eye for detail.
- Show up to the inspection and keep track of all the inspector has to say.
"Your main concern is the possibility of structural damage, which can come from water, shifting ground or poor construction."
- Decide if the problems or necessary repairs are something you feel comfortable with, or if you would rather walk away. Fox Business advises that if the repairs will cost more than 2%-3% of the purchase price, it's probably not a good deal.
7. Get an appraisal and loan approval
- The bank will conduct its own appraisal, to make sure the house is worth the contract price.
- If the bank approves, the loan becomes officially available, should you decide to go through with the purchase. Zillow says this appraisal/approval process can take up to thirty days.
8. Buy homeowners insurance
- Don't go with the first company your bank recommends. Do your own comparison shopping, or get help from an independent insurance agent who can shop around for you.
- Talk to an independent insurance agent in your neighborhood, to recommend the right company, policy, and price for insurance for your new home and your budget.
9. Close the deal.
- Hire a lawyer, if necessary. Some states require a lawyer for this part of the process, and others don't.
"Lawyers aren’t always necessary for residential purchases, but if your situation is complicated or if you’re buying a foreclosure, it’s a good idea to hire one."
- Ask for an itemized list of closing costs, and ask your agent or lawyer to help you spot unnecessary fees.
- Sign the paperwork and write a lot of checks. Schoen says, "You’ll usually have to write separate checks for each of the closing costs."
10. Move in and enjoy your new home!
- Throw parties.
- Make memories.
- Build equity.
- Call an independent insurance agent if you ever need help with a claim.