Homebuyer's Checklist: Your Comprehensive Guide to a Smooth Purchase
For most people, a home is the biggest purchase they will make in their lifetime. Beginning the homebuying journey is incredibly exciting and likely feels like the start of a brand-new chapter, but it is also one that can probably feel overwhelming at times, particularly for first-time homebuyers, when you consider how many factors are involved in making the purchase. However, with a little research—and an experienced real estate advisor at your side—you can adequately prepare yourself ahead of time. Read on for a step-by-step guide to take you through the process so that you can successfully navigate the intricacies of purchasing a property.
1. Financial Considerations
The first practical step you should take is determining your budget. If you’re planning on buying a home, you likely already have a fairly clear idea of where your finances are at, but taking a deep dive into your household’s income, expenses (including the new expenses that will accompany homeownership), and any future financial goals is important.
Find out what your credit score is as this will affect your ability to secure a loan and your mortgage interest rate. If you have time, consider the ways you can raise your credit score to make you the best candidate possible. Once you feel like your financial affairs are in order, you should seek out a mortgage pre-approval. A pre-approval will inform you of what kind of loan and how much of a loan you qualify for after a lender has examined your financial situation, including your credit score and income. Undergoing this process signals to buyers that you’re not only interested but that you have also taken serious steps to begin the process, helping you stand out, particularly in competitive markets.
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2. Home Search and Selection
Once you have figured out most of the preliminary financial components of the home-buying process, you can dig into the fun part: looking for a home. Firstly, you should have a clear idea of not only your needs in a property but also your wants and how items in both categories are prioritized. For some buyers, a newer home with high-tech features is essential, so looking for a house with features like integrated tech systems or EV chargers will be at the top of their list. For other buyers, homes with older, classic architectural features, like crown molding or original hardwood floors, will be on their radar. Consider if this is a home that you’d like to stay in for the long run and what features or upgrades would be necessary for you to comfortably age in the home.
The location of a home is almost as important as the home itself if you consider livability and resale value. Are you content with the neighborhood you’re currently in? If so, looking for a property nearby will make the transition even easier as you’ll already have a clear idea of how long your work commute takes, what the schools are like if you have children, your favorite coffee shops, restaurants, etc. But if you’re looking for a change of scenery, take the time to not only research online the vibe of neighborhoods but also explore it in person—if you are able to—to truly get a sense of the area.
Working with a knowledgeable real estate agent will be an enormous help when deciding what type of neighborhood you’re interested in as they should be able to provide you with market area data and expert insights. The importance of having a dedicated broker at your side throughout the entire process cannot be overstated. They’ll guide you through the complexities, go to bat for you in negotiations, and ensure that you’re receiving the best value for your budget and needs.
3. Home Inspections and Due Diligence
You’ve found the perfect home in the perfect neighborhood—now what? Now you want to schedule a home inspection to ensure that there are no issues with the home, or that if there are, you are completely aware of them and have factored them into your decision. Although a home’s condition may seem apparent on the surface and as you do your own walk-through, aspects like plumbing, electrical, and HVAC systems should be thoroughly inspected by a professional for not only your safety but also so that you’re aware of any problems that could detract from the home’s value. If a home fails an inspection, you have several options: you can decide to walk away and continue your search, request that the seller fix the issues, or you can use it to your advantage when negotiating a price decrease. Whatever you decide to do, the important part is that you’re aware of the issues.
Property disclosures are also very important as they serve as documents that provide details about the home’s condition and any issues with the home that the seller is aware of. Disclosures give buyers an opportunity to cancel the purchase if defects are revealed that the buyer deems unacceptable. This document is fairly straightforward, with sellers answering a series of questions about the home’s condition and history.
4. Negotiations and Closing
You’ve put in the work and reached the finish line—almost. You still have to make an offer and should consider your budget, contingencies, if the seller has other seriously interested parties, and the benefit of earnest money (a deposit, of sorts, to show sellers you’re serious about purchasing). Your real estate advisor will be able to guide you through negotiations and give you the best idea of how much you can try to get the price down with everything you’ve discovered about the home during inspections and through the property disclosure.
You should also consider closing costs, which can include several fees including appraisal, title search, and attorney fees. The buyer will pay the bulk of these costs, so it’s important to account for this additional expense by considering factors like your loan amount and where you’re buying when examining your financial capacity.
Before you close, you’ll have the opportunity to do one final walk-through of the property. Although you’re probably ready to be finished with the home-buying process at this point, be sure to take your time and come prepared with a checklist. Make sure the home is in the same condition as it was the last time you saw it and that any repairs requested have been made. This is essentially your last chance to make sure everything is up to your standards, or at least the standards set during purchase, and we recommend you take your time. Here’s a good starting point when creating your own checklist, courtesy of Forbes.
From the preliminary preparation of your finances to touring homes to the final walk-through, buying a home has many moving parts that can seem daunting, whether it’s your first time buying a home or your tenth. The best approach is to go in with a clear idea of what’s expected of you, the buyer, and what you can reasonably expect from the seller. Even by just reading this article you’ve done yourself a service in preparing for your home-buying journey.
