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Buying a home is one of the biggest investments and life milestones for many. It can be exciting, intimidating, and overwhelming — all at the same time. You’ll have a lot of questions and things to consider, along with all the work you need to do. Luckily, having a reliable home buying checklist can make things a lot easier. Here’s everything you need to know to get started on this journey.
2022 Home Buying Checklist: 10 Things You Must Do
1. Determine How Much You Can Afford
The first step of the home buying checklist is ensuring that you can afford the purchase price of your dream home.
Set a realistic budget by calculating your monthly bills, expenses, and gross income. Consider the costs of HOA fees, insurance, maintenance, renovations, taxes, and utilities. Also, factor in how much you can realistically spend on your monthly mortgage.
A mortgage affordability calculator can be helpful in identifying a budget. This considers your income, debts, location and down payment amount. It also shows your possible monthly mortgage payments and finances as a homeowner.
It’s also best to check your credit score. If you have a higher credit score, you have better chances qualifying for a mortgage and earning a lower mortgage interest rate.
2. Plan for Additional Costs
The next step of the home buying checklist is to determine some costs you need to pay upfront.
The down payment is a one-time payment towards your home which is largely determined by the type of mortgage you get. Generally, conventional loans require a 3% to 5% down payment, 3.5% for FHA loans, and 0% for VA or USDA loans if you are eligible. If you want to avoid private mortgage insurance, a 20% down payment is needed.
Also, be ready to pay for closing costs when you process and secure your loan. A loan estimate from your lender can help you learn how much to prepare for.
Bonus tip: Set aside a little extra budget for repairs that may come up after your home inspection.
3. Find a Lender and Get a Mortgage Pre-Approval
Before you start shopping for homes, you should first find a lender who can help you secure a pre-approved mortgage. This gives you an idea of how much you can get and the specific closing costs.
Essentially, a lender will investigate your assets, credit rating, income, and other finances. They will also help you decide on a pre-approval amount and choose a loan that suits you best.
Having a letter of pre-approval helps guarantee that you’re able to obtain a loan. It also gives sellers the confidence that you can afford their property, potentially giving you a leg up over other interested buyers.
Bonus tip: Consult with different lenders before closing on one to find the loan that’s most financially advantageous.
4. Work with a Local Real Estate Agent
A real estate agent can provide insights about the location, community, and industry. They represent you during the home buying process by asking crucial questions and ensuring you find the right home for you.
The role of real estate agents include:
- Booking and attending inspections.
- Explaining the end-to-end transactions.
- Negotiating effectively.
- Providing knowledge about the local market.
- Understanding property values.
- Writing an offer letter.
When finding an agent, consult with your family and friends. You can also check online reviews and testimonials.
5. Go House Hunting
Shopping for your potential home is an exciting part of the home buying checklist.
Keep in mind that you have to consider the following:
- Access to public transportation
- Community amenities
- Condition, details, and features of the home
- Neighborhood security
- Property value trends
- Real estate taxes in the area
It’s helpful to take photos and videos during your inspections so you can go back to them when deliberating.
6. Make an Offer and Start Negotiating
When you’ve found the property you like, you can finally make an offer. Your real estate agent can guide you through the process in this step of the home buying checklist.
Your agent will do a comparative market analysis. This is done by assessing recent home sales in your area or information from selling agents.
Your offer includes your personal details, the price you want to pay, and a deadline for the seller to respond. Some buyers also add a 1% to 3% earnest money deposit.
If the seller declines, you have the option to make a counter-offer or negotiate the terms. If you get cold feet and rescind your offer, the earnest money may be forfeited to the seller.
Once both parties agree on the terms, conditions, and costs, the seller can accept the offer and you can proceed with the next steps.
7. Finalize Your Mortgage
When the seller has approved your offer, the next step is to secure a final approval on your mortgage. Keep in mind that even if you have a pre-approval letter, you may be asked to submit some documents to finalize your mortgage.
This step of the home buying checklist helps ensure lenders that you can afford and repay your loan as agreed. It also proves that you have been evaluated lawfully.
Some of the required documents include:
- Assets
- Credit and liabilities
- Employment and income verification
- Homeowners insurance
- Personal information
- Property details
- Recent bank statements
8. Prepare for Closing
Closing is a crucial, home-stretch part of the home buying checklist. This includes scheduling a home inspection, getting a home appraisal, and securing insurance.
A home inspection is a thorough examination done by professionals to ensure that the property is up to code. They check for the soundness of the foundation, roofing, plumbing, electricity, and other home systems. They also look into signs of mold, radon, and other dangerous elements.
On the other hand, a home appraisal helps check the home value against the market value and the loan amount. It also considers public trends and evaluates the home’s general condition.
It’s helpful to secure an insurance policy to get coverage in case of an accident in the property. This should be effective on your closing date.
9. Negotiate Repairs and Do a Final Walkthrough
Negotiations are an important part of a home buying checklist. If you or the home inspector notice any necessary repair, you can communicate this with the seller.
You can arrange for the seller to address the changes before you move in. Alternatively, you can handle the repairs yourself and the seller can rebate the amount for the specific improvements. This can save you costs and ensure that work will be done to your standards.
Don’t forget to conduct a walkthrough to ensure that all negotiations are implemented. This can include all appliances, renovations, and repairs that have been agreed upon. Ensure that HVAC, plumbing, and other home systems are working well.
10. Close the Deal on Your New Home
The last step of the home buying checklist entails closing on your new home.
About three days before closing, your lender will provide you with a closing disclosure. This outlines the terms, final cost, and remaining balance on your loan. Your task is to review and ensure that it is closely aligned with your loan estimate.
Other things you can expect during the closing date include:
- Signing of legal documents — certificate of occupancy, deed of trust, promissory note, and settlement statement.
- Turning over of checks or wire transfer to cover closing costs and other fees.
- Checking of proof of identification, homeowners insurance, and taxes.
Your real estate agent and lender can help you with the specific tasks during closing. Be sure a closing agent is present to act as a mediator who confirms all documents and ensures all funds are paid and disbursed.
After closing, the property title will be passed on to you, making you a new homeowner.
Buying a house is a complex and tedious process. This home buying checklist is your guide to ensure you tick off everything you need to find your next home and close the deal.
Are you looking to buy a new home in Las Vegas? The team at the Brendan King Group is here to help you make that happen. Contact us today and let’s discuss how we can work together.
