Home Buying 101

This post will be a basic checklist of buying a house. As a first time home buyer last year I'm still a novice when it comes to real estate but this is a good list to at least remind myself (and hopefully others) about future home purchases. This is probably the most complicated and stressful process out there. In my opinion it should be way easier than they make it but that discussion is for another time.

1. Know what you want before you start looking
Now you'd think this is a given but I thought I'd list it first. People always have things that they must have and that's a good thing because it narrows down the search. Garage, bathroom, bedrooms, sq ft, particular city, price range?
In my case I wanted a condo or town home in order to save on yardwork. I also wanted an attached garage, the most sq ft for my buck, something within 20 mins of work, something under $200k, and an entrance on the main floor (instead of walking up a flight of stairs immediately). This limited my search greatly and I was able to get a great deal on a townhome that fit the bill.

2. Do some searching before deciding what to do
These days it's really easy to search. You can go onto Zillow, Redfin, Trulia, or MLS and search areas for listings. You can narrow your searches down for exactly what you want. For the most part these sites are powerful and great tools to use when searching. Once you find some places you want to see then go to step 3.

3. Get a Realtor
Even if you're an experienced home buyer this is key. These people have access to data that no normal person does. They can also help answer any questions you may have and can talk to the selling agent. These people will or should be willing to accommodate their schedule to drive you around and show you all the places you found in your own searches. They can also get access to listings that may not be up on any websites. It's good to find an agent in the area that you're searching in because they usually know that market well and can help you get what you want.
In my case I had a TERRIBLE agent. I had to do just about all the work myself and only used her to guide me through the process and show me homes. The rest I did on my own.

4. Decide on a place, get pre-approved, and make an offer
Picking a place to make an offer on is tough. It's the biggest expense you'll ever have in your life so choosing a place can be difficult. Make sure you know the maximum price you're willing to go to and get pre-approved from a lender for that place. Getting pre-approved is easy. You just head to a lender, tell them the place you want to make an offer on and the maximum price you want to pay. They'll take down some general info, run a credit check, and write you a letter that says you're pre-approved.
Now you make an offer, and obviously you want to low ball it on your first one. In my case the place was listed for $185k. I offered $165k initially. They came back and said $180k. I said $177k best and final offer and they took it.

5. Pick a lender
This step could really go under part 4 as well. I went with my usual bank who I also got my pre-approval from. Working with them was a nightmare because they kept sending me from one loan officer to another but in the end we got it done and I never had to go in to talk to them in person. You can also shop around from bank to bank and put their rates and fees against each other and pick the best one. I went with the convenience of having my own bank do my loan since I could do an auto-withdrawal from my account there. One piece of advice that I hear a lot is DON'T USE AN ONLINE LENDER. There are small online companies who try to pull people in with attractive rates and fees. From what I've heard these are shady businesses with terrible customer service. I went with a real bank instead.

6. Get an appraisal
Your bank will require an appraisal of the house's worth before lending you the money. They will usually charge you around $200ish to do this. Basically a guy comes out and looks at the place and does some online research to determine its worth.

7. Get an inspection
A basic home inspection also runs around $200, depending on the size of the house and what they inspect. In my case my HOA owns the exterior so I only needed the interior inspected. The inspection is very basic and nearly worthless if you're handy around your home.

8. Find an escrow company
I had no idea where to search for this so I had to ask my Realtor who she usually dealt with. In reality you can choose anyone but I found someone who has worked with my Realtor and with my bank. It was a smooth process. They take advantage of you financially for your down payment and fees and such to get your escrow account started. You also get the world's thickest packet of paper and have to sign and initial a million times to approve your purchase. Once you get this over and done with you're basically a home owner awaiting your closing date.

I'm sure I missed some details along the way but this is how I remember buying a home. You have so many people involved and they all want a piece of your money. At the end of the day you have to struggle to meet deadlines for getting stuff done or signed. You also have to accept that you'll be writing checks to multiple people for months and signing many papers. After it's all done you're already too exhausted to move (or pay someone to move for you). Once you're in your home though it's a good feeling.