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How to Buy a House in the USA: A Complete Guide

Did you know that over 600,000 houses were sold in the USA in March 2020? Despite negative world events, people still see that investing in property is a good use of funds.

If you are a first-time buyer, purchasing a house is no doubt daunting for you. How can you be sure that you are going about it the right way?  What steps can you take to ensure that you will make a wise choice?

image - How to Buy a House in the USA: A Complete Guide
How to Buy a House in the USA: A Complete Guide

Why not take a few minutes to consider how to buy a house in the USA. Following these steps will help you to avoid making common mistakes.

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1. Get Researching

If you are a first-time buyer, the first thing that you need is information. Dive into real estate listings, newspapers, real estate website, anything that can help you to understand the local housing market.

As you research, take note of want you want from a house. Equally, note things that are unacceptable for you.

Compare the prices of areas that you would consider living in. This will give you a comparative understanding of the housing market.

2. What is Your Budget?

Now that you have a realistic idea of how much houses cost, you can calculate how much you can afford to pay.

Financial institutions will often recommend that you do not borrow more than 3-5 times your annual income. This is a reasonable guideline.

Talking with a professional mortgage broker can help you to calculate a reasonable loan amount.

3. Get Pre-Approved Finance

Getting a pre-approved finance package before approaching real estate agents or sellers gives you a great advantage. You will need to provide the lending institution with some basic information such as your income, savings, and any investments you have.

Speaking to real-estate agents with pre-approved finance in place will expedite the search and sales process. You are able to show that you are very serious about buying and have the financial support to be able to do so.

Pre-approved finance will also help you to understand your financial limitations. You know the highest price you will be able to afford and will not be tempted to go above this.

4. Find the Right Real Estate Agent

Real estate agents can be invaluable partners when searching for a house. They can give you information regarding neighborhoods that you may not find elsewhere. Further, their experience in home-buying and negotiating can be very valuable.

Remember that you do not pay the real estate fees. They take their payment from the commission paid by the seller of the house.

Shop around until you find a real estate agent that you feel comfortable with. Finding a real estate agent that understands your needs and wants can save you much time in finding a house.

5. Inspecting Houses

Once you have paired up with a real estate agent, you will start house visits. During this process, you will learn a lot about the housing market and the condition of houses in your price range. It is good to take notes, either on paper or electronically of each house you visit.

When visiting houses it is important not to shy away from performing thorough inspections. It may seem intimidating to enter someone’s house and begin opening taps and testing light switches. However, it is important to learn as much as possible at this point.

Your inspection should include the following:

  • Plumbing should be tested by opening taps and running the water. How long does it take for hot water to reach each tap?
  • Turn all electrical switches on and off to test the electrical systems.
  • Check window mechanisms by opening and closing all windows.

Remember that when you visit a house, you are also visiting the neighborhood. Try to take note of the following:

  • Are other homes in the area well maintained?
  • How is the traffic in the area?
  • Is there easy parking?
  • What conveniences, entertainment, schools, and other necessary services are nearby?

6. Arrange for a Professional Evaluation

All parties will expect that an expert will perform an evaluation of the building and its structure. Your real estate agent can help you to make arrangements for this.

You can actually place an offer for the property, but place a condition that it must pass an evaluation for the deal to be completed.

If the evaluation reveals problems in the house, this does not mean that the deal is off. Depending on the severity of the problem, it may be possible for the owner to repair the problem. The deal can be concluded after this work is completed and approved.

7. Work with a Mortgage Banker

Every buyer has their own priorities when arranging a mortgage. Some want low monthly repayments over a longer period of time.

Others want fixed payments that are shielded from increases. Others purchase a house in the knowledge that they will resell in the future.

Because of this mortgage bankers will offer you a range of options. Your preference will indicate which is best for you.

8. Get an Independent Estimate

The financial institution that is lending you money will want to arrange for an independent estimate of the house you will purchase.

The appraiser will work separately from all parties involved. they will calculate a house price and this will show whether the price that you are agreeing to is far or not.

9. Coordinate the Paperwork

Accuracy and organization of paperwork are crucial to the smooth handling of the purchase. the lender will arrange for a separate company, known as the Title Company, to ensure that the paperwork is correct. They will also confirm that the seller has the right to sell the property you are buying.

10. Close the Sale

After this, you will close the sale. All parties will sign the necessary paperwork. Within a couple of days of signing loan documents, the finance will be transferred to the seller. After this step, you will be ready to move into the house.

How to Buy a House in the USA

If you are wondering how to buy a house in the USA, you will now see that it is not as scary a prospect as you thought.

By researching carefully and taking the right legal precautions along the way you will be able to purchase a house that will care for your family for years to come.

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