Hey there, first time home buyer folk and realty romantics! Welcome back to CheersLB.com, where we talk real estate with chaser of advice. Today, let's dive into the steps involved when buying your first house or condo – a journey that's less 'walk in the park' and more 'rollercoaster ride with a blindfold.'
1. Figuring Out Your Finances: Show Me the Money! Before you start fantasizing about walk-in closets and jacuzzi tubs, let's talk turkey. Figuring out your finances is like a first date – awkward but necessary. How much can you really afford to spend without crying into your wallet? This isn't just about how much the bank thinks you're good for; it's about what won't sleeping on a drawing of a bed you made on your moving boxes. It may seem intimidating or embarrassing but you need to meet with a banker to find out what a real budget is. IMPORTANT TIP- It's important to be upfront and honest about your finances, don't pretend to be one of those a rich douchebag Winklevoss twins just to impress other or you the only real estate you will end up with will be under a bridge. A good banker will help you understand your house hunting range, get you pre-approved and let you know roughly how much you will have to show up with at closing and what your monthly expenses will look like. If you are a cash buyer, welllllll good for you, no seriously good for you, keep reading though as there is more helpful info.
2. The Hunt: Going Solo or Saying 'I Do' to a Realtor Next up, the hunt! You can go solo, swiping right on homes on your own but being innocent in the ways of the property seduction, it's best to do it with a pro. They will have insights into the market, help you through the paperwork, negotiations and the entire process, not to mention in most areas at least for now, the seller of the property you buy will be responsible for paying them. It doesn't cost anything to talk to a realtor, they will help you shop free of charge in hopes of getting you as a first time home buyer client. Just like your upcoming Tinder date, make sure you trust and hopefully like them as a person before committing. IMPORTANT TIPS - Once you sign paperwork with one as your exclusive realtor, they are entitled to a cut regardless of if you find the property, even if you buy it from a relative or anyone else unless. You can and should lay out exclusions with them before signing anything such as; any property you find or finds your, they are not involved/entitled unless you want them to be. Also have them make your term with them as your agent isn't more then 30 or 60 days because let's face it, you'll know by then if they get to meet mom at that point or if it's time to keep looking. QUASI TIP - If you find a property you like without having a realtor of your own, you can have the seller's agent represent you as well which often helps encourage getting a deal done. Just remember, they were the sellers agent first so usually even if they are meeting your out for drinks, they are most likely having dessert with the seller.
3. Making an Offer: Let's Get Down to Business Found the one? Heart racing? Palms sweaty? Time to make an offer. This is where things get steamy. Making an offer is like proposing – you want a 'yes,' but you've got to play it cool. Be bold but not reckless, charming but not desperate. Lay your heart on the table and hope for the best but remember in today's market there will most likely be other suitors so don't drop the bye Felicia on your neighbor quite yet.
IMPORTANT - There are many things to keep in mind before making it final. Do you have the down payment ready or do you need some time to get it all together? Pre-approved (see talk to a banker)? How soon can you get out of your lease, mom's basement or cousin's attic? And most importantly, are you keeping your budget in mind. If the offer does get accepted you will need to pony up the earnest money usually within a few days of acceptance so try not to celebrate too hard after getting the 'YES'. With your money always in mind, it's important you don't order the champagne on a beer budget or you will wake up with more than a hangover!
4. Appraisals, Inspections, Title: The Reality Check Now let’s talk appraisals, inspections, and title searches – the holy trinity of "getting serious." Think of this step as meeting the parents. The appraisal is like ensuring you're not paying for a Mercedes when it's actually a beat-up Volkswagen. Inspections are like checking your future partner’s baggage – you need to know what you're getting into. And the title search? It’s like confirming they're not secretly married to someone else.
IMPORTANT - Your banker and realtor should have explained this but just in case they didn't, you will paying for the inspection and often the appraisal even if the deal falls through. When you get the appraisal and inspection back, you will get a chance to address them with the homeowner and your banker. Assuming you didn't pretend you were Chip and Joanna Gaines, waiving all the inspection/appraisal contingencies and right to request repair (see find a good Realtor), this is when you can get potential issues addressed before you move in. If things aren't looking so hot and the seller isn't budging/assuming your realtor did the paperwork correctly, you can walk away from the deal at this point and get your earnest money back.
5. Closing: Seal the Deal with a Kiss (or a Signature) Finally, closing time – the 'I do' moment. This is where you sign your life away (just kidding, sort of). It’s the final hurdle, with paperwork galore and some hefty checks to write. But once you're through, pop that White claw, baby – you've just bought yourself a house!
Conclusion: So, there you have it – house buying, CheersLB style. Remember, it’s a wild ride, but with a bit of humor and a lot of patience, planning, budgeting, learning and excitement, you'll be turning that key in no time. Now go forth and conquer that real estate market!
Bonus FAQs to know before taking the leap:
Is eating ramen every night a legitimate budgeting strategy?
How do I know if a realtor is 'the one'?
Can I back out of a house proposal if I get cold feet?
What if the house has more baggage than my ex?
Do I really have to read all that closing paperwork?
Surprise homeowner expenses, but didn't I just spend all of my savings?
DISCLAIMER- This is strictly opinions from one dude on the internet, wearing rainbow colored crocs, not to be taken as legal advisor or professional in your area. Do your own due diligence and make sure to speak with licensed professionals in your area. Though I have gone through many a real estate transaction, each one in each area has been different. This will be one of biggest investment/commitments your will make in your life so do it with as much knowledge as you can.
And remember, for more advice and real estate shenanigans, stay tuned to CheersLB.com. Happy house hunting! 🏡🎉