Main image courtesy of Iona Senior Services.

Thinking about owning your home is always exciting, and looking for one is even more fun, especially for first time home owners. However, the home buying process has a lot of moving parts, and you’ll need to make sure you have a healthy dose of patience in order to successfully complete it! But owning your own home is definitely something that’s within your reach, and will allow you to strengthen the ties with your community and create a stable, lasting legacy for your family.

But what should you have on your home buying checklist? Glad you asked because in this article we’re going to cover:

• The basics of the home buying process
• The checklist to follow to get your dream home

What are the basic steps in the home buying process?

Know what bases you have to cover in order to get closer to purchasing your first home

Purchasing a home is one of the best (and largest) transactions you may ever make. Homeowners enjoy stability and peace of mind that renting just cannot provide. When you purchase a home, you’re starting to build your wealth, as the equity that accrues with each mortgage payment increases your worth and can be a lasting legacy for your family. After you complete the process, you’ll be much more financially savvy, and able to help out and guide others through the ins and outs of the journey.

The basic steps you’ll need to complete when trying to buy a home can be put into four broad categories:

• Personal finance
• Lending companies and loan approval
• Home search
• Closing

While your home buying checklist will probably be a little longer (more on that below), all the steps to getting you from start to finish fall into one of these categories. Everyone’s path to home ownership may look a little different, and that’s okay! You’ll know when the time is right for you to start on your very own journey to home ownership.

Home buying checklist (condensed for first time home buyers!)

Check these items off your list as you get closer to buying your home

Let’s expand on those categories above and list out what the home buying process will entail.

1. Review your finances

This is an important first step, and should be done when you’re seriously considering the purchase of a home. This includes doing a financial checkup to see what your debt to income ratio is and confirm that your credit scores are in good order. Typically lenders like to see a history of good credit as well as a steady stream of income so they know you can afford a home.

Then determine your home affordability limit to see what you can afford based on your debts, your income, and the cost of living where you are. This will help you make a budget range for what prices are within your reach. 

This is also when you’ll want to decide what type of down payment you are able to bring to the table. A higher down payment is difficult for many home buyers, who instead put less down up front and are required to pay mortgage insurance. If you can secure a larger down payment, that’s great, but if not put down what you can afford!

2. Shop around for lenders

Then you’ll want to reach out to lenders and banks to determine what type of loan you’ll qualify for. They will also confirm what home prices are in your budget. Speak with potential lending candidates about getting preapproved for a certain amount as well. This signifies to sellers that you’ve already done the legwork to get approval, and are serious about your offer. 

3. Reach out to professionals

It’s always a good idea to turn to professionals since they know the ins and outs of your particular real estate market. Find a real estate agent, Realtor, or a real estate attorney (if necessary) to ensure you’ll find the home of your dreams. Agents also ensure that the prices sellers are asking are in line with the home’s value.

Pro tip: Choosing to get a real estate is an even better decision since you won’t need to pay their commission. The seller typically pays for both the seller’s and buyer’s agents.

4. Search for your dream home

This is the fun part, search for your dream home! Go with your agent and see homes in your budget that meet your requirements (square feet, number of bedrooms, large back yard, etc.) Your agent should know what you’re looking for and the neighborhoods where you want to see homes. Be patient with this process, and remember you don’t need to settle for something you don’t love.

5. Make an offer

When you find the home of your dreams, it’s time to make an offer. If they accept, great! You’ll then need to make sure you write a check for earnest money, which will go into an escrow account and shows that you’re serious about the purchase. If not, you can always make a counter offer through your real estate agent or walk away.

6. Get approved 

Even if you’ve been preapproved, you’ll still need to go through the thorough approval process of your lender and fill out the appropriate paperwork. They’ll need to examine:

• W2s
• Pay stubs
• Tax returns
• Bank statements
• Debt information
• Social Security Number and ID

This process may take a little while, so have patience, as the lender will need to complete an underwriting process and a title search.

7. Home inspection and negotiation

As a buyer, you will pay for a home inspection to ensure the property is in the state that the sellers say that it is. They’ll look for and point out any deficiencies or concerns that need to be addressed. You can negotiate with the sellers to pay for any repairs that the inspector found, but this will depend on the type of market you’re in, and what the repair is.

8. Close on your home

You’ve made it to closing! After doing a final walk through with your agent, you’ll go to closing with a check for the closing costs as well as your down payment. There'll be plenty of paperwork to sign as well, but once you’re through, you’ll have the keys!

The home buying process can take some time, especially if you’re having trouble finding your dream home. Not to worry, you will and you can make it through this journey and come out a new home owner!