10 Steps to Buying a House
10 July 2015, by Design A House Sign
1) What can I afford?
Before you even contemplate looking for houses or finding an area you want to live in, it is important that you work out how much you can actually afford to spend and borrow. There is no point finding your dream home or ideal location and then coming to the realisation that you actually can’t afford it. You should also make sure that you check your credit report, as this might determine the amount a lender is willing to give you. As long as you don’t have large outstanding debts or you’ve failed to repay them in the past then you should be ok. There are some helpful tools online that might be of use for both of these problems.
How much can you afford on a mortgage?
- Work out how much you can afford based on your annual income
- Factor in other things like loans and expenses
- Work out how much will have spare each month
How to check your credit report
- Find out how you can check your credit report
- Helps you get clarity on your financial state
- Work out how likely you are to get a mortgage
2) Research and find the right mortgage lender
It is important that you shop around when you are looking for a mortgage lender and the company you bank with may not offer the best deal for you. It is important that you get an idea of the different loans that people are offering so you can work out the right deal for your needs. This can be a long process so it is always good to have an idea about how loans work before you talk to a lender.
3) Get pre-approved
This is an important part of the process and you should make sure that you discuss this when talking it through with a lender. It is important for two main reasons. Firstly, it will give you a full understanding of the actual mortgage you will be able to afford. You may have done the calculations already, but talking with a lender and getting this pre-approved will confirm it. This will also put you in a better position when you come to buy. If a house seller has two similar offers, but one is pre-approved and the other isn’t, they are much more likely to accept the offer that is.
4) Determine your wants vs needs
When you have finalised your plans and financial situation, you should make sure that you know the difference between what you want from a new home and what you actually need. It is often easy to list some of the ideal features you’re looking for in a new home, but it is hard to find exactly what you’re looking for, especially when you’re keeping to a budget. Work out what you need, including the number of bedrooms and anything else like garage space, and this should help you keep perspective when looking for your new home.
5) Find the best estate agents for you
It is important to first consider whether you want to hire an estate agent, or whether you want to take on the house hunt yourself. If you do decide to work with an agent, you should remember that most are paid on commission. If the agent doesn’t close a transaction they don’t get paid. Therefore, you should always make sure to keep appointments and be on time if possible. If you’re going to be late then let your agent know. You should also make your thoughts and feelings clear to the agent so that you get the best results and they know you are not wasting their time. It is important to be honest and have a good relationship with your agent as this should make the search easier.
6) Start looking for your home
It’s now time to finally start your search! If you’re working with an agent then they will, of course, assist you in this. Along with the suggestions your agent provides, you are also likely to do your own searching online and through newspapers to get an idea of what’s available. You may also want to visit the local area if you are planning to move somewhere new. This can be a great idea as it is always good to check out the town and the local amenities before you move to a new area.
7) Consider pre-offer tasks
Buying a house involves a lot of careful thought and consideration, so there are some things you should think about before you decide to make an offer. One of these things is to consider the resale potential of any home that you buy. Unless you are looking to buy a long-term family home, most people will move home an average of three times, so you should consider whether or not you will be able to make money on the resale of your house. You should also be sure to check things like the heating system and electrics are all in order, so you aren’t left with any costly bills when you move in.
8) Make an offer
So now that you’ve found your ideal home, you will want to make an offer to secure it. There are a variety of factors when it comes to making an offer and you will want to be sure that you are getting the best deal. First-time buyers and those with pre-approved mortgages are in a better position. You should make sure the agent and sellers are aware that you are ready to move and not reliant on the sale of another house. It is worth checking how long the house has been on the market and if the sellers are in a hurry to move. All of these factors can put you in a great position for negotiation.
9) Home inspection
Before everything is finalised, it is important that you get a home inspection carried out to make sure there are no hidden dangers that might be costly to repair. If you are not experienced and you don’t know what you are looking for, then it can be difficult to spot some of the problems such as damp or subsidence. These issues can become extremely costly so it is important to have your own survey carried out to make sure you won’t be left to foot the bill.
10) Avoid last minute problems
Make sure that you are always in the communication loop when buying a home. You should always make sure to check on the status of your sale to make sure everything is going through smoothly This way you can act quickly to secure a deal if something changes. One situation that can often cause a problem is known as gazumping. This is when the seller accepts a higher offer from another purchaser and is completely legal. You should always make sure that the deal is closed and that the property is off the market before you are sure you've secured the property.