Steps to Buying a Home
1.Determine that buying a home is the best course of action. There are many factors relevant to the timing and suitability of a home purchase. Some areas of consideration are: a) length of time intended to hold the property. b) types of financing currently available c) houses currently available for sale d) intended use of the property e) desire to see the transaction through to closing f) tax considerations
Length of time
This issue is very important primarily as it relates to financing, especially in the area of closing cost. Closing cost generally range from a minimum of 3% of the purchase price on up to 7 or 8% depending on what type of financing is used. For example a $100,000 purchase would have an average of $4,000 in closing costs. If you only plan to stay in the home for a period of less than one year and then sell, it would be possible that you might not be able to recoup your initial investment depending upon the acquisition cost verses the disposal proceeds. Many factors can effect this outcome, for example; purchase price verses appraised value, market swings, and availability of comparable homes at the time of intended sale. Get a personal analysis
Types of financing available
Depending on personal circumstances, the types of financing available varies greatly. Effective pre-planning could drastically alter the types of financing available for use. For instance, the way credit shows on your credit report. If currently little or no credit shows up it could be beneficial to establish some accounts that will report. Often this can be accomplished without spending anymore than the current budget, simply buying food or gas and repaying the debt during a credit cards grace period is one of many ways to accomplish this. The best course of action generally is to get pre-qualified to determine what type of financing would be available now and if needed an action plan to follow that could make financing more attractive in the future. Get pre-qualified
Houses currently for sale
Another very important step in the homebuying process is determining what needs the home will need to fulfill in order to effectively search the marketplace.
Working with a real estate professional who knows and understands the local housing market as well as the individual needs of the homebuyer can be very beneficial. This would enable access to more suitable properties avoiding time lost researching and viewing properties that ultimately would be unsuitable to the needs of the buyer. Another benefit of working with a local real estate professional is the ability to calculate the anticipated appreciation and resale potential. Submit needs list
Intended use of the property
Whether this is anywhere between your first home, last home or simply an investment property should have a great impact on how a property is acquired and financed. A property that is intended for resale within a short period of time most likely will be very different both physically and financially from a property that is being purchased to live in with little maintenance or initial upkeep desired.
