How To Buy A House (A Step By Step Guide)

This is my step by step guide on how to buy a house in 2020 and beyond. I hope you enjoy it and find some value!

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Step 1: Evaluate your readiness to purchase a house
Not just emotionally, but also financially! Make sure you understand things that lenders will evaluate before giving you a loan. Things such as credit score, debt to income ratio, assets vs liabilities, etc will all be considered.

Step 2: What can you afford?
You will need to figure out what purchase price makes the most sense for your budget. Get a solid understanding of how much you will need to fork up as a down payment, about how much to expect in closing costs and lastly, how much you can afford on a monthly basis in the form of a mortgage.

Step 3: Get pre-approved
You will need to get in contact with a lender or a loan officer to discuss what loan amount you will generally qualify for. They will then provide you with a preapproval letter, which you can provide to the seller to show that you are serious and have already qualified for the loan to purchase their house.

Step 4: Define the criteria for your future house
What are you 'must haves' and your 'nice to haves'? This will narrow down your search dramatically.

Step 5: Work with a local, experienced real estate agent who knows the market and will represent YOU! Don't worry about paying the agent commission fees, because the seller pays for both agents fees in their side of closing costs.

Step 6: Make an offer on a house
When it comes time to make an offer on a house you'd like to buy, your agent will provide the documentation for you to sign off on. The seller has a few options: Reject the offer, accept it, or more than likely - negotiate a counter offer. You will likely go back and forth a few times. Here you can negotiate the purchase price of the house, if you want them to leave the furniture as part of the deal, ask for them to contribute to your closing costs, etc.

Step 7: Go under contract!
Once an offer is accepted and agreed upon, you are now under contract. The contract period typically lasts for 30-45 days, upon which you close on the house. Many things happen during this period of time: Inspection, appraisal, homeowner's insurance, etc.

Step 8: Close on the house
Once the inspection is completed, appraisal is done and the underwriter is finished reviewing all the necessary documentation, you will be cleared to close! You will then receive the closing disclosure (CD) in which you will review all the final numbers of the transaction. Upon the day of closing you will need to stop by the bank and wire the exact amount due to the title company. Once the money has been wired, you will meet with the title company representative and sign all the paperwork required. After signing and the transaction has cleared, congratulations, you are the new owner of the house!