The four big steps to buying a house
By Anita Newhouse
Any baker worth their weight in bread flour will tell you: Read the recipe before you begin.
Gathering the ingredients and necessary tools isn’t enough. How bummed would you be if the cake you were baking had to be glazed while hot and you didn’t have the icing ready? Or what if you woke up at the crack of dawn to make these Cinnabon-style cinnamon rolls only to learn too late in the game that the dough has to rest for at least an hour and then the rolls themselves have to rest another 30 minutes? By the time they’re ready to eat you’ll have hangrily gobbled half a bag of tortilla chips and three sticks of string cheese, leaving you too full to enjoy your efforts. THE HORROR!
Is this loosey-goosey baking vs. homebuying metaphor just an excuse to share with you my favorite cinnamon roll and cake recipes? Kind of! They are legit delicious! But I also want what’s best for you, and when it comes to tackling a big, unfamiliar project, it’s very common to dive in and quickly lose sight of the bigger picture.
Cinnamon rolls have instructions. Homebuying has instructions, too. So let’s slow things down. Let’s read the whole homebuying recipe before we start cracking eggs and burning cakes and buying houses we can’t afford, shall we?
Let’s, as New Kids on the Block sang, wisely, in 1990, take it step-by-step.
The steps to buying a home can be broken down into four stages: Budgeting, searching, making an offer, and closing. Each stage comes with its own unique set of challenges and knowing what some of those challenges may be will lessen surprises down the road.
Step 1: Setting your budget
You don’t have to do this part alone! While many folks believe they need to have all their finances in order before meeting with an advisor, in truth, it’s never too early to look for guidance. That’s what the professionals are there for, to help you figure out the best path for your specific needs! Worried you can’t afford a home? Wondering how your credit score could impact a loan? Start with a Financial Checkup. Then, a Flyhomes expert can give you feedback with just a 15-minute phone call.
If you’re planning on taking out a loan for your down payment, there are two important things to know. First, your down payment doesn’t necessarily have to be the traditional 20 percent. Second, Flyhomes strongly recommends getting pre-underwritten. Pre-underwriting is the only way to know, with certainty, how much money you’ll have to work with. (You’ll be thanking yourself by the time you get to Step 4, trust me.)
Step 2: Finding your home
This is the fun part! This is when you can get lost in home listings and imagine all the bells, whistles, and covered porches you want your new place to have. But it, too, comes with some necessary homework. Prepare for this step by making and trimming a wishlist, learning the lingo of real estate listings, and visiting open houses. And have you considered neighborhoods that may be out of your comfort zone? Do that, too!
Step 3: Making an offer
Whether you’re working with Flyhomes or a traditional agent, making an offer is all about striking a balance. It should be affordable for you and enticing to the seller and, what you may not yet realize, it goes beyond the dollar signs.
Can you pay in cash? Can you remove contingencies in the contract to make for a quicker close? If the seller needs more time in the home, are you willing to rent the home to them after you take the title? What actually happens on offer day, anyway? There’s a lot to think about, and your agent will help you.
Step 4: Closing
Closing isn’t just about signing paperwork, grabbing the keys, and popping the champagne. This final step is also when you deposit your earnest money, satisfy any contract contingencies, choose a lender and complete the home inspection. What does all that mean? I’m so glad you asked because I didn’t know either. If you, too, think earnest money is like Ernest money, you’d be wise to read this run-down of the closing process.
This is also where Today’s You will thank Yesterday’s You for doing some of that heavy lifting in Steps 1 and 2, like getting pre-underwritten and searching in previously unfamiliar and up-and-coming neighborhoods that might give you a little more cottage for your cash.
Homebuying doesn’t have to be a confusing, shape-shifting monster full of mystery and suspense. Do your homework today so you aren’t surprised tomorrow. Read the recipe. Which reminds me, I’m gonna go add “outdoor pizza oven” to my wishlist. A baker/homebuyer can dream, right?
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