Do you have a checklist for buying a house available? Buying a house is one of the biggest purchases that a person does in their lifetime.
This kind of transaction requires expertise on complicated financial and legal matters, along with knowledge about issues like flood plains, property boundaries, and more such tedious matters.
There are plenty of experts available whose prior focus is to help you find your perfect dream house. Yet relying on them for such an immense investment can be difficult and time-consuming. This process is not at all mundane if you know the right question to be asked while buying a house.
All you need is a proper organization, a detailed checklist, and knowledge about the right questions to ask for buying a house. Preparing a checklist can also be a task because making peace with what we want and what we can let go of seems an impossible decision with buying a house.
Here are certain things you can consider while preparing your checklist for buying a house:
Check your finances and research mortgage options
First, you need to understand that if you need a mortgage, to buy a house. If the answer is yes, then you’ll have to find someone who will lend you money. This means the mortgage lender will go through your finances, check if there is an income stream to make monthly mortgage payments, and the history of your regular paycheck.
Credit scores and credit reports play a vital role for the banks as they help in determining the type of mortgage you qualify for. Homebuyers need at least over 760 to earn the best of rates and terms, while a credit score below 500 is too low for mortgage approval.
Your job in this situation is checking your finances along with researching the mortgage options available that suit your financial conditions. You also need to figure out how much cash you have to cover your down-payment along with the purchase price. This depends on the terms of the mortgage. Some mortgages require a 3-5% down payment and some need a 20% down payment.
Know your budget
Setting a budget for your house can be as tedious as it can be. Therefore you need to make an itemized list of your regular monthly expenses. This list will include items of your monthly recurring expenses along with new house-related monthly expenses like property taxes, mortgage and mortgage insurance (if taken any), and homeowners’ insurance.
After making the list, divide the total monthly expense with your total monthly income. The resulting percentage will help you decide if you can afford a house and how much should be your budget. This percentage is known as DTI or debt-to-income ratio. To have a comfortable living even after shifting to a new house, choose a DTI between 25%-30%. This DTI will make sure that your mortgage payment and related payments are smaller.
Research and find a good real estate agency
A good real estate agent is one that understands the needs of its client and delivers the same. Agencies such as Invermere real estate can help you with your requirements. You can always gather help from your friends and relatives for referrals or you can also look at online reviews for the agency that best suits your interest. Make sure that you’re comfortable with your agency because that will ensure complete transparency and will make sure you get exactly what you are looking for.
Time for house hunting
Your agent will start showing you options that will best suit your requirement list. During this process, discover the area and neighborhood you would want to be a part of. Look for local amenities and services such as hospitals, schools, retail shopping, grocery shopping, public transport, and gas stations. See if the neighborhood is safe and if you can start your family there. ‘
Once you have scanned the area, decide on the number of rooms and bathroom requirements you have. See if you like the overall look of the house. There are certain red flags that might incur a huge amount of repairing costs like the roof, windows, air conditioning, flooring, furnace, and paint.
Gather all the required documents
There are chances that your lender might ask you to submit your financial documentation. This documentation includes the last two years’ tax return, documentation of income for the last 2 years, bank statements along with brokerage and investment account statements for the last two years, proof of funds for a down payment, letter of recommendation from the previous landlord, and ID proof. These are the basic set of documentation that must be ready in chronological order.
Make an offer and negotiate
If finally, you found a house that checks in your checklist completely, then this is the time to make an offer. Make sure that your offer letter includes important details like exclusions, considerations, timings, and contingencies. Once the offer letter is ready, your realtor will send the letter to the seller’s real estate agent.
After this comes the negotiation phase. This is where the real estate agent will help you determine the real value of the house. He will help the buyer and seller to strike a deal. The seller will always come up with a counter deal. But you will have to find a middle ground with the help of your agent to complete the purchase.
Hire a real estate attorney
A real estate attorney will help you in finalizing the purchase after reviewing the offer and all the documentation related to it. They will make sure that you didn’t miss out on anything written under the fine prints of the contract and the purchase is safe enough to be taken forward.
House inspection and an appraisal
A home contract mostly comes with a clause saying the house must pass the inspection. And you should sign no contract without this clause. The inspection will make sure that there are no functional and structural issues that the seller tried to hide. This home inspection can bring to light minor issues like electrical and plumbing, which can easily be repaired.
The seller also sometimes gets an appraisal done to make sure that the house is worth the offer amount. And if not, an appraisal will be arranged at the expense of the buyer.
Final Thoughts on Using a Checklist For Buying A House
Finally, all your purchase arrangements are done, you have got done with your inspection, your finances are in place and all the documentation is in place and you have found a place that suits them best to your checklist for buying a house. This is the time to get your house furnished, receive the keys, and move into your new house.
This entire process and procedure may seem exhausting and daunting to people. But once you complete the process and find a house worth spending your life in. You realize that the stress and the hustle were all worth it.