How do you actually buy a house? (Part 1)
Thank you and welcome back to week three, I am happy to be here, and to be doing this for those of you reading! in past weeks we’ve talked about why its a great time to buy and sell in the Cleveland area. However, the process of actually buying a home might be daunting, and completely foreign to some - specially if its your first time! Do not worry one bit because the process, for you the buyer, is very straight forward specially with the right agents and lender by your side! Perhaps the two most time consuming parts for you the buyer are: finding the right lender and getting pre approved, and finding the right house - yay! Aside from that most of what you’ll be doing is waiting excitedly and signing A LOT of documents! But let’s go back a little though and break it down step by step.
1) Get pre-approved!
Probably one of the most stressful things when buying a house is getting pre approved. It can be a little nerve racking to have someone random go through finances and tell you if you how much you can spend on a house. This being said, most good lenders will be very good at making this process as painless as possible, and if they are REALLY good, they’ll even tell you how improve your finances if you can’t initially get pre approved. Generally in Ohio (assuming that you have a decent credit score and a balanced debt to income ratio) you can get pre approved for up to 3x your yearly salary. So lets say you’re making 50k a year, you’ll most likely get pre approved for a max of 150k. Still with me so far? It’s also important to note that you’ll most likely need to present your lender copies of your pay stubs, W-2s, and or bank statements.
2) Find your dream house!
Once you get step one squared away, it comes times for the fun part of looking at houses. While it can be a little stressful to spend your free time looking at houses, for most people (hopefully your realtor as well) looking for houses is a lot of fun! Regardless if you look at 2 or 20 houses, try to enjoy the process as it’s probably one of the biggest decisions of your life. Now you might be thinking “But Elliot, how will I know if I’ve found the right house?” Honestly? you’ll just know, there’s a statistic out there that says most people decide if they want to live in a house or not within 7 seconds of walking into it! 7 seconds, thats just crazy to me. But who am I to judge, my (now) wife and I did the same thing while buying our current home — it was honestly a beautiful glorious moment! Just remember to not get sucked into like a house that has a lot of problems if that’s not what you’re looking for.
3) Submit an offer and negotiate!
This step is relatively straight forward. The first thing to do is to talk to your agent about how much to offer, and any other relevant things that need to be included in the contract. These may include but are not limited to: seller concessions, time to close, earnest money, and inspections (we’ll talk about all of these in another post). Also get that singing hand ready! After you’ve talked all of these over with your realtor and have come up with a good offer price and submitted the offer, a few different things might happen. 1) The seller might negotiate the offer with you. This could be in terms of money, closing time, concessions etc. 2) They might simply reject your offer. While this might seem unreasonable, believe it or not it happens. 3) They might tell you they have multiple offers and request your “highest and best” offer by a certain time. (we’ll tell you a secret about how to beat this highest and best thing at some point during the blog). 4) They might simply accept your offer! Yay, of course this is best case scenario!
While there is more to buying a house, we will continue that on part two of this section since I am trying to keep these very short. Once again thank you for reading! Please like, comment and share as you see fit! See you next week!