Looking for the most simple homebuyers checklist?
We understand how buying a home can be an overwhelming task. That is why we put together this homebuyer checklist.
Purchasing a home is exciting, fun, and stressful, all combined in one wrapped up
Like an everything bagel, you sometimes don’t know what to expect with each bite as far as purchasing a new home goes! That is why we put together the best checklist for potential homebuyers!
The Easy-to-Follow 7-Step Homebuyers Checklist!
Buying a new home is always stressful, whether you are a first-time homebuyer or an experienced homeowner purchasing another home.
Below, we share our realtor-approved checklist to help you simplify the process. So before you start packing, here’s what you need to do!
The quick list:
- Make sure you are mentally prepared for the home buying process
- Get your finances in order & get a pre approval letter from mortgage lender
- Find and pick a real estate agent
- Write down the characteristics of the ideal house, location, etc.
- Go house hunt & find a few
- Offer and place an earnest money deposit
- Close on your new home!
1. Get yourself ready!
Buying a house is a big deal!
That statement isn’t meant to scare you, but instead prepare you! Coming up with a down payment, finding a mortgage lender, securing a top real estate agent, and finding the right home is all going to take patience and perseverance.
The entire home buying process can be an emotional roller coaster so you really want to prepare yourself for the journey. Your answers to the following questions will help you determine if you’re really ready to buy a new home:
- Do you have a family or plan on starting one?
- Is your work stable or what you see yourself doing for the next 4-5 years?
- Are you sure you have considered all the factors like maintenance, taxes, and so on?
- What are the pros and cons of buying? Make a list.
Lastly, what type of monthly mortgage payments are you willing to take on? The last thing you want to do is buy a home and be house poor!
➡️Related: How Long Does it Take to Sell A House!
2. Make sure your finances are in order!
A mortgage pre approval is something that can take time and there can be numerous loops to jump through. To make the process as simple as possible, but also to really set yourself up for purchasing a new home – you need to get your finances in order.
Start with a budget.
You need a clear picture of your family’s finances before considering calling a realtor or applying for a mortgage, let alone buying a home. A 15 or 30 year mortgage is a long period of time and most people are going to spend 40-50% of their income on their housing.
Knowing this, create a budget that lists:
- Fixed: All your monthly fixed expenses, such as car payments, current rent or mortgage, utilities, school tuition, and loan payments.
- Variables: Add categories for other expenses, such as food and entertainment.
- Savings: What do you have in savings and how much are you currently saving?
Next, list your debts.
If you have existing credit card debts, student loans, or other debts that require regular monthly payments, get them down in black and white so you know exactly how much you owe.
- Debt: What payments go to debt and are currently impacting your debt to income ratio?
You will need to figure out your debt to income ratio because this is essential for a mortgage loan. There are plenty of online calculators that will do this for you.
You need to know two ratios:
- Your housing debt expenses (including taxes and insurance) as a percentage of your gross monthly income should be 25-28%.
- Your installment debt ratio (credit cards and other consumer debt) should be around 10-15%. Your total debt-to-income ratio should not be more than 40%.
Once you know your debt to income ratio in in good standing (less than 36% is ideal), it is time to look for mortgage lenders.
Vett and search for mortgage lenders.
Finding a loan officer shouldn’t be hard. Chances are you have someone in your network who can refer you to a reputable loan officer who can help you navigate the lending process.
Go ahead and consult with multiple lenders in your area and while locking in an interest rate is important, make sure the lender you decide to work with is transparent when it comes to:
- Lending fees
- Down payments
- Loan programs for your needs
- What to do if your debt to income is less than ideal (you might have to pay off debt or fix your credit score for example)
Once you have called a few lenders and decided which one is the best mortgage lender for you, now it is time to get your pre approval letter and submit the necessary paperwork.
Get pre-approved by a mortgage lender.
You want to get pre-approved for a loan before you start shopping for a house.
A pre approval letter tells you how much house you can afford and allows you to place a solid offer in for a potential home. This will also safeguard to keep you from falling in love with something you can’t afford or can’t get a mortgage for.
Be sure you understand the mortgage pre-approval process and recognize that getting pre-qualified means giving a lender your overall financial picture.
Lenders will want the following so the more you have preapred the better;
- Your debt totals
- Income
- Assets
- Credit report and credit scores
- Pay stubs
- W2s
- Business profit and lose statements (if necessary)
- Previous tax returns
- Bank statements
- Investment account statements
- Round about home’s purchase price
Once given all the financial information they need, a lender evaluates this information and gives you a ballpark figure of the mortgage amount for which you could qualify.
Pre-qualification can be done online and you can knock it out pretty quickly once you submit financial documentation. Being pre-approved aka “final approval” means that a lender evaluates your debt ratios, your credit report, and overall ability to repay a loan and says,
“Yes, I would loan this buyer X number of dollars to buy a home.”
The best mortgage lenders will help you determine which loan also fits your needs. Loan options include:
- Conventional loans
- FHA loans
- VA loan
- Renovation loans
- Personal loan (not often used to purchase a home)
3. Select a real estate agent!
Once you have a pre approved loan in hand from a financial institution or lender, now it is time to select a real estate professional.
For your real estate transaction you wan’t to find a buyer’s agent who can help you with the entire process. To do this, start by using the following steps below!
Make a list of realtors in your area!
Before you begin working with a realtor, you will want to have a few options to choose from. The best way to do this is to search for an agent through your existing network and compile a list of realtors in your area (or the area you want to buy in).
You will want a market expert wherever you begin house hunting!
➡️Related: How to find a real estate agent near you!
Be sure to ask your agent the right questions!
When talking to prospective realtors, don’t be afraid to ask probing questions. And expect to get frank, straightforward answers. Here are a few questions to ask your realtor to get you started:
- How long have you been in real estate?
- Do you represent both buyers and sellers?
- How many buyers are you currently working with? How many sellers?
- How many homes did you sell last year?
- How familiar are you with the neighborhoods we are considering?
Buying a home could wellbe the most critical decision you will ever make, both financially and emotionally so make sure you do your homework and select the best agent for you!
Pick your real estate agent!
Once you’ve done your research, it’s time to start looking.
You want to find a Realtor who represents you and puts your interests first. The best way to find a realtor is to ask friends and family for recommendations. However, if you are new to the area and don’t know anyone, you may need to visit several firms and interview several realtors.
Chemistry is important, but so is transparceny.
You need to look for someone who is committed to meeting your needs and who knows the area and price range you’re looking in. Once all the stars align, choose your agent to represent you!
The buyer’s agent gets paid from the seller, so you don’t have to worry about paying the agent you hire!
4. Create your new home wishlist.
Now, it is finally time to start the fun stuff… selecting a home!
To start, you need to make a two-column list of needs vs. wants.
Be sure you know the difference between a need and a want.
- You need four bedrooms.
- You want a swimming pool.
- You need two garages.
- You want to have a wooded backyard.
- You need at least 3,000 square feet.
- You want to have a huge master closet.
You get the point. A need is something that is required to purchase, a want is something that would be nice but isn’t a deal breaker.
Just be very upfront with your realtor about what constitutes a deal-breaker in your purchasing process and what you can afford. Don’t entertain something you don’t like or can’t afford.
Select your desired home’s location.
Most people start with the location of where they want to live first.
Because of low inventory, finding a home is more challenging now than ever since the COVID-19 pandemic. This means you might have to cast a wider net in terms of location, price range, and size to get a home.
In the spring of 2022, it was one of the most competitive markets on record. However, interest rates slowed down the selling and purchasing craze, but inventory has remained low making desirable hot spots like Charlotte, NC, Austin, TX, and the Atlanta suburbs harder to find homes in.
Start by analyzing areas you want to live and can afford to live in. Be sure to consider things like:
- Commutes to work
- Schools
- Safety
- Neighborhood & community
- Future growth
Lastly, make sure you agree with your significant other!
If more than one person is involved in making the final decision, be sure that you are more or less in agreement about needs and wants. If one spouse wants a short commute and the other has visions of a country estate, you could have a problem. Resolve these issues ahead of time.
What kind of home are you looking for?
Once you find the area you want to live in, next target homes based on filters like bedrooms and bathrooms and work your way backward from there. For example, if you know you need to have at least four bedrooms because you have one kid and another on the way, use that as a filter.
Be sure to also consider things like attached vs unattached homes and the size of the yard! Include all these items on your list of needs and get to hunting!
Last tip: Are you purchasing new or previously owned?
While there are pros and cons to purchasing both new and previously owned homes, you will want to keep in mind the following for each:
New Homes:
- Longer timelines that can be delayed because of supply issues
- Higher costs and potentially drawn out closing process
- Customizable and energy efficent
Previously Owned Homes:
- Quicker move in and better pricing
- May need renovations, roof replacement, power washing, painting, etc.
- Location can be a pro (closer to city for example)
- The condition or health of the home (can be a pro or con)
5. Go house hunting!
House hunting for your dream home is a blast! Most of the time your real estate agent will help you create a list of 5-6 homes to visit after you have combed through online real estate portals to narrow your home search.
A reputable real estate agent will help you navigate the home search process and also has access to the MLS (Multiple Listing Services).
With your list in hand, you will either visit open houses or potentially tour the house with your agent. Once you visit a few homes, you will know which one is the best and be ready to place your offer!
6. Make an offer & down payment
The day has come to finally put in that offer for that home you have been looking for!
Once you find the house you want, you will need to put in an offer and patiently wait 24-48 hours to see if your offer is the one selected. Depending on the market of the location where you’re purchasing, there could be many offers or just yours.
Often, the most competitive offer has a higher down payment amount and no apprsial contignecy. In the hot market of 2022, many offers were even waving the home inspection.
These factors will really boil down to the market and your real estate agents ability to perform for you! Fingers crossed 🤞your offer gets accepted. Once it does, the last step is to close!
7. Close on your new home!
The home buying process is drawing near the end once you have a firm closing date. You will typically see a 30 day closing period from offer to settlement, give or take a few days.
Once you have made an offer on a home and it has been accepted, there are a few things you will need to take care of between the time of your ratified offer and the closing date.
First, you will want to handle a few of the following items:
- Determine which homeowners insurance company you will use
- Determine closing costs with your lender (some closing costs can be shopped around for, but not all)
- Conduct necessary home inspection(s) per the lender’s request
- Get loan estimates and closing disclosure information sorted out
- Find out the results of your home appraisal
Most of the leg work will be done through a series of emails, document signs, and phone calls, but you will want to make sure you’re responding quickly to all parties involved in the transaction.
Enjoy your new home!
Once your feet hit the floor inside of your new home it will all be worth it!
Sometimes the home purchasing process can be taxing and take well over 90 days. But if you followed this checklist for first time what you will find out is you made the right decision with whatever home you ended up acquiring!
If you find yourself still reeling with questions, don’t hesitate to reach out here and contact the team at Robin Hickman Realty of Charlotte, NC! We would love to assist you in anyway!
FAQ Home Buying:
Do I have to have a home inspector to buy a home?
Depending on what your lender requires, you may or may not have to have a home inspection. Many offers as of late waived the home inspector requirement to have their offer accepted. While this is generally seen as risky if you’re purchasing a used home, your mortgage lender and agent will help you decide what is required in most cases.
Can you buy a home without a mortgage preapproval?
You will need to have mortgage pre approval to purchase a home unless you plan on buying a house with cash.
What are the best mortgage companies?
Large mortgage companies like Bank of America, Wells Fargo, and Rocket Mortgage are the common names you will hear about in the industry. A home loan officer or mortgage broker is often your best bet to get the personal touch and feel!
What should be the number one factor for buying a house?
Your monthly payment!
The monthly payment is always the determining factor and where the rubber meets the road for most home buyers. You might find your dream home, but if you can’t afford it you will most likely be living a nightmare!
