Whether it’s your first house or what you hope will be your last, buying a house is often a very stressful process. Until the moment you take possession of your home, there’s always a chance something could go wrong. Here are seven ways to simplify the process of buying a house.
1. Get your paperwork in order
Start getting your paperwork in order before you even start looking at properties online. If you’re applying for a loan, you’ll need your last two years’ worth of tax returns, current pay stubs, bank statements for the last three months, cancelled rent checks, or copies of your lease. You may also need your divorce decree and bankruptcy paperwork if either of those situations apply. Remember that getting money out of a 401k or a trust for your down payment or outright purchase can take longer than you anticipate, so find out how long it’s going to take and what’s involved if that’s a route you’re considering.
2. Find a real estate agent you can trust
Before you start the mortgage or loan application process, finding out what’s going on in the market is vital. Interview at least three real estate agents, and listen to what they say about what you’re likely to get for the house you’re selling. In addition, speak with them about what you’ll likely pay for your new one.
Once you’ve heard the same price ranges three times (assuming all the agents you meet with agree, which they should), choose the agent with the best track record of sales in your area, the best online or personal recommendations, and the one you like best. Staging, keeping a home show-ready, and listening to tactfully delivered feedback from people who’ve viewed your home means you’re going to be interacting with your agent a lot.
3. Start researching banks, credit unions, and loan officers
While it might seem simpler to use a bank or credit union that offers home buyers one-stop shopping, what the term really means is the bank has a vested interest in the sale through controlled business arrangements with realtors, attorneys, and possibly even home inspectors, and may receive a portion of the commissions. That’s no way to guarantee objectivity. To check a loan officer’s record, ask for their ID number and take a look at NMLS Consumer Access. If you’re using a mortgage broker, check their credentials with the Better Business Bureau.
4. Get your financing in order
Once you’ve chosen your loan officer, bank, credit union, or mortgage broker, get pre-approved for a loan or mortgage and get a pre-approval letter. This will not only help you figure out what you can afford before you start looking, it tells realtors and sellers you’re serious. Depending on how long your search takes, you may need to renew your pre-approval—they’re usually only valid for 60 to 90 days.
5. Find a home inspector you can trust
If you’re looking at older homes, a good home inspector will be able to warn you of areas where there are problems with termites, water seepage, or shoddy construction. Do your due diligence. One of the best ways to find a good home inspector is to talk to a tradesperson you’ve used in the past, one who takes pride in their work and wants everyone in the industry to do the same. Try to find a home inspector who’ll let you accompany them when they make their inspection so you can ask questions on the spot.
6. Consider investing in title insurance
While it may seem like an unnecessary expense, making sure there are no liens against the property you’re buying is important. The last thing anyone needs is to find out the home they just bought is owned by someone other than its previous occupant. It costs between $1,000 and $3,000 on average, or .05 percent of the purchase price. You can sometimes get a reissued title insurance policy if the seller went through this process. That can save you some money. Get your real estate agent to ask the seller’s realtor about this. Additionally, some banks may require you obtain title insurance if you’re getting a mortgage, so be sure to inquire with your lending officer.
7. Get your tradespeople lined up
If you’re already a homeowner and have been through renovations or repairs, you may have a plumber, an electrician, a roofer, a flooring person and a general carpenter you know and trust. If you’re moving to a new city or you’re a first-time homebuyer, you’re going to have to rely on in-person and online recommendations.
One of the best places to find good tradespeople is an independent home supplier. They know who’s sloppy and who’s not, and they’ll often have business cards for tradespeople behind the counter. Here’s hoping these seven ways to simplify the process of buying a house make the experience a little less stressful. Happy hunting!