I realize not everyone is in a situation where they can buy a new home, but if you are and if you are looking or if you are planning on buying in the future, this post is for you. And building new homes represents a growing economy and new jobs for people so I like this!
After my husband and I were married, I moved into his condo. We’re pretty traditional and were not living together before we got married so everything was different, new and exciting. Because we moved into my husband’s place, I never completely felt like it was our place. I just moved in. Me and all my stuff. But, at the time, it just made sense for us. He already owned his place and I was still renting. And all we had to do was kick out his younger brother, have the place cleaned from top to bottom, figure out what furniture stayed and what got tossed, and how we were going to decorate. Easy enough, eh?
My husband is pretty handy. He fixes things. He loves going to Lowe’s and Home Depot. He likes wearing his tool belt. So, occasionally when something would need to be fixed, he’d bring that sucker out and get to work. There were a few times we had to call a real plumber or someone to look at the dishwasher. Our condo has a great view and I think this was why my husband purchased it. But it was a pretty old building and he did a lot of work on the place. Remember, he’s totally DIY. In fact, one of our favorite shows after we got married was a home renovation TV show and I swear, HGTV was on all the time at our place. The condo was fine for us as newlyweds and just for us. . . But then we became 3.
After we had our first daughter, like most people, we accumulated all the baby stuff that pretty much starts to take over your house. And then she became mobile. She was cruising around all over the place, and so we quickly realized we needed more space. We were living in Los Angeles and, if you live there, you know you have to pay big money to live close to the city. So, off we went. To the Valley. Where it’s freaking hot weather-wise, but you can get a bigger house with a backyard and maybe even buy a brand NEW house.
And that’s what we did.
We were actually just driving around so our daughter could sleep more in the car. Parents out there, I know you can relate. And we happened to come across a brand new housing development. We had only been semi-looking at used houses and I didn’t think we could afford a new house. While we were walking through the model home, I was inwardly admiring the open floor plan and the decor and the newness of it all. I totally imagined myself living there. Dreaming. As we left, I thought “Oh, I wish we could get a house like this . . well, one day.” We went back home, discussed everything, looked at our finances, made a spreadsheet because that’s what we do and my dream came true earlier than expected. We got a great deal on the house and so we went for it. We were home owners!
If you read my blog, you know we also recently relocated to the great state of Washington in 2012. Again, we had to go through the budgeting and house hunting process but this time, we did it the right way. We found a fantastic real estate agent. One who knew WA and all the neighborhoods really well; because we didn’t. We had over a month to find a house and took two house hunting trips as a family and the rest was handled by my husband. For us, since we have children, we purposely looked for houses in the school districts we wanted to be in. And originally, we were only looking to rent. I mean, we were brand new to WA and what if we picked the wrong neighborhood or found an area we liked better later? Well, long story short, we ended up buying – again- a brand new house, in a brand new housing development. This meant being a little farther out from the city, but that was fine by me. Fortunately, I actually had friends who lived here who gave us some great advice and we got the school district and schools we wanted to be in. We are in a great neighborhood and I really love where we are. And I love our new house. I got my dream kitchen (more on this in another post), the kids got their playroom, and my husband got his big garage and study. Everyone is happy.
And although I love a good re-model or a fixer-upper, what’s great about buying a new house is that your house is move-in ready, which means there’s nothing to fix. And for my husband, meant hardly any trips to Home Depot, which saved us time and money. This worked out well for us because we were both starting new jobs and I, was mainly concerned about getting the kids acclimated to their new home, city and neighborhood. If we had to spend time on the house or if a lot of things needed to be fixed, on top of everything else, we would have been way too overwhelmed. And the new house just allowed more time to breathe, unpack, settle in and explore our new city as a family. Everything is new and usually more energy efficient. And after looking at so many new houses, I feel like newly built homes are built for modern families, with open floor plans, more storage and more room to entertain. Which, for me, is a big plus.
Buying a new home might sound impossible or something you think might only happen in 5-10 years. And can you even afford it? Do you even know where to start? You can start here, at BHI’s Start Fresh, Buy New website where you can find information about buying new homes. There’s a cost savings calculator to help you, information about energy efficiency and they are currently hosting a $10,000 Grand Prize Giveaway! You’ve got to check this out.
Want more information? BHI has a New Home Resource Center with articles that outline:
- New Home 101, How to Get Started
- How to Shop New
- The Buying Process
- Designing Your New Home
- The Building Process
- Settling In
Here are more important steps can help you out. And of course, it doesn’t always happen in this order but hopefully all of the steps and points outlined here can help.
Steps to Buying a New House*
Step 1, Get Your Finances in Order
Your credit reports are an ongoing look at how you manage your finances. You must know exactly what your credit reports say about your financial historybefore you apply for a mortgage, because the reports play an important role in the mortgage approval process and in determining the interest rate and other loan terms that a lender offers you.
If you haven’t looked at your credit reports, you might be surprised at their contents, because errors are common.
Background Reading
- What’s on Your Credit Report and How Did it Get There?
- How To Check Your Credit Report
- Clean Up Your Credit Report
- Understanding Your Credit Scores
- How to Improve Your Credit Scores
Step 2, Get Familiar with the Mortgage Industry
Finding the right loan and lender is crucial to your home buying success. It’s up to you to determine which lender is best for your needs, and it’s always a good idea to have at least a bit of background about the loan process before you talk to a lender.
Background Reading
- What’s the Difference Between a Mortgage Broker and a Bank Loan Officer?
- Understanding Your Debt to Income Ratio
- Should You Choose an Adjustable Rate Mortgage?
- FHA Loan Basics
- VA Home Loan Facts
- Bi-Weekly Mortgage Payment Plans
- Should You Really Buy Discount Points?
- Facts About Private Mortgage Insurance
- Will You Have a Mortgage or a Deed of Trust? Why Does it Matter?
- Watch Out for Loan Fraud
Step 3, Get Pre-Approved for a Mortgage
Do you know how much house you can afford? Probably not, unless you’ve talked with a lender.
Pre-approval helps you in other ways. Consider this scenario. A home seller gets two similar offers. One is accompanied by a letter from the buyer’s bank that states she is pre-approved for a mortgage in the amount of the offer. The other has no supporting documents. Which offer do you think the seller will consider first?
Background Reading
- Pre-Qualification vs. Pre-Approval, Which Do You Need?
- Using Online Mortgage Calculators to Analyze Your Loan Possibilities
Step 4, Determine Your Wants and Needs
Buying a home isn’t as difficult as you might think, even if you’re short on funds, but the process will go a lot smoother if you get familiar with your real estate market and narrow down your wants and needs before you start looking at houses.
Background Reading
- Sort Out Your Wants and You Needs
- Considering Resale Potential
- When You Need Help with Downpayment Funds
Step 5, Learn to Work with Real Estate Agents
Real estate agents represent buyers, sellers, or both–and in some states they can work as neutral facilitators for either party. It’s essential to understand agent duties and loyalties before you make that first phone call.
Background Reading
- Does Your Agent Work for You?
- How To Work with a Seller’s Agent
- What You Should Expect from a Buyer’s Agent
- How To Hire a Buyer’s Agent
- How a Buyer’s Agent Becomes a Dual Agent
- Common Myths About Working with Real Estate Agents
- Your Duties to Your Agent
- Dealing with Incompetent and Unethical People
Step 6, Start Searching for a Home
Your agent will give you multiple listing sheets to study. I’m sure you’ll also pick up House For Sale magazines and read classified ads in your local newspapers. You’ll probably spend time surfing the Internet for homes. You might even plan afternoon drives to preview neighborhoods. Those are all excellent ways to see what’s available. Here are some tools to help you narrow your home buying search.
Home Buying Search Tools
- Consider the Houses that Others Overlook
- It’s Time to Find Out What’s Out There
- Search Public Versions of Multiple Listing Service Web Sites
- Find Real Estate Agent Web Sites
- Browse Real Estate Search Engines and Networks
- Find For Sale By Owner Properties
- Look at Print Magazines
- Find Foreclosed Homes
Step 7, Handle Pre-Offer Tasks
Deciding whether or not you want to buy a house involves a look at its structure and its features, but there are many other topics that are every bit as important to your purchase. Here are a few topics you should explore before you make an offer.
Background Reading
- How’s the Resale Potential?
- Contract Contingency Basics
- What Kind of House Is It? Site Built, Modular, Manufactured
- Do Others Have a Right to Use the Property?
- Can You Live with the Deed Restrictions?
- Is the Reported Square Footage Accurate?
- Is the Heating System Efficient?
Step 8, Make an Offer
There’s no one set of instructions that can cover all the differences in real estate laws and customs that exist throughout the United States, so the mechanics of making an offer and its specific contingencies depend greatly on your location. However, there are some home buying tips that can help you fine-tune your offer, no matter where you live.
Background Reading
- What Comes With the House? Contract Considerations
- What Should the Seller Disclose?
- Determine if Lead Paint Disclosures Are Required
- Decide How Much to Offer
- Asking for Possession Before Closing
- Special Considerations for For Sale By Owner Purchases
Step 9, Home Inspections and Other Tests
In some states, home inspections are accomplished before the final purchase contract is signed. In other states, inspections take place after an offer is finalized. No matter when you do them, it’s critical to decide which inspections and tests you want to perform.
Talk with your real estate agent or other advisor to find out when inspections should be handled and if additional types of testing are important for your specific area.
Background Reading
- Order a Full Home Inpsection
- Testing for Radon Gas
- Looking for Molds and Mildew
- Lead Paint Disclosures & Inspections for Pre-1978 Homes
- Is There a Private Well on the Property?
- Understanding and Checking the Septic System
- Tenting to Eradicate Wood Destroying Insects
- Should You Buy a Home Warranty?
Step 10, Avoiding and Correcting Last Minute Problems
As your closing date nears, everyone involved in your real estate transaction should check its progress on a daily basis, because staying on top of things means you’ll know immediately if there’s a problem that must be dealt with. Here’s a bit of information that focuses on a few common problems that home buyers must deal with before they close on a house.
Background Reading
- 10 Things You Shouldn’t Do When You’re Buying a Home
- Get the Facts About Residential Appraisal Methods
- How to Deal with a Low Appraisal
Step 11, You’re on the Way to Closing
Most of your home buying problems are behind you now and you’re on your way to closing, also called settlement, the event that transfers ownership of the property to you. Just a few more things to learn, a few more things to do, and you’re there!
Background Reading
- Coping with Buyer Remorse
- Get the Facts About Title Insurance
- Learn to Read the HUD-1 Settlement Statement
- Take Your Final Walk-Through
Closing Thoughts
“The steps outlined in this article are a general home buying guide. You will encounter issues specific to your location and your transaction, issues that can best be explained and handled by your local real estate agent, your lender, your attorney, your closing agent, or others who are helping you complete the home buying transaction.
Never hesitate to ask questions. Ask as many questions as necessary to help you understand the entire home buying process. You are making a long term commitment and spending a major amount of money–you’ll feel much better about the transaction if you stay informed and understand what’s happening every step along the way.”
*”Steps to Buying A New House” was from About.com
Wherever you and your family end up or live, just make it your home. And fill it with lasting memories.
I was selected for this opportunity as a member of Clever Girls Collective, and the content and opinions expressed here are all my own.
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