No matter how many house-buying checklists and step-by-step articles you read, they won\u2019t be able to prepare you for every possible scenario in the homebuying process. And many of them don\u2019t touch upon what it feels like to buy a house. Because no matter how hard you try, emotions will likely come into play.<\/p>\n
We researched and talked to expert real estate sources as well as listened to stories and advice from people who bought their first home in 2018 or 2019 to put together this resource about one of life\u2019s biggest decisions: Buying your first home.<\/p>\n Buying a house can be one of life\u2019s most stressful events.<\/p>\n Shal Shahani<\/a>, a top-selling Boston real estate agent and single-family home expert who has worked with 80% more single-family home transactions than the average agent in the area, helps a wide variety of people find and purchase homes. Shahani says that the mortgage<\/a> preapproval process and finding a real estate agent can happen simultaneously.<\/p>\n \u201cSince agents have a good understanding of what banks and mortgage companies are looking for, they\u2019re able to offer sound advice on potential markets and lenders,\u201d she explains.<\/p>\n \u201cIf the buyer has a bank they normally bank at, we would go and talk to the mortgage person first,\u201d Shahani says. Otherwise, buyers should talk to their agent to get an idea of what they need to do and where they want to be.<\/p>\n Title searches are a necessary step in the homebuying process<\/a>. A title search makes sure that all documents and transactions concerning the property in question were filed and executed properly, and it also searches for any liens on the home.<\/p>\n Most lenders require title insurance, which protects their interests<\/a> (loan amount) in the property, but not the homeowner\u2019s interests (or equity). Equity is the dollar value you\u2019re left with after you subtract the amount of your mortgage from the sales price or market value of your house. Many buyers choose to take out an additional owner\u2019s title insurance policy<\/a> to protect that equity.<\/p>\n Shahani told us of a recent title search that uncovered a missing signature from 70 years ago on a document. The property was owned by a couple; one of them died, so when it was sold, the document was missing the signature of the deceased. This meant that whoever inherited the property could conceivably make a claim that the sale from the remaining parent to the buyer wasn\u2019t legitimate.<\/p>\n \u201cLuckily,\u201d Shahani explains, \u201cthe sellers had title insurance on the house, so the title company came in and went to the courts.\u201d Something like this could (and in this case, did) delay a closing for a few weeks.<\/p>\n Title insurance policy costs vary depending on the amount of the loan, the state the property is located, and the buyer\u2019s credit score. Also, different banks and lenders may offer different rates. Lower credit scores and higher loan amounts are considered riskier and could result in higher premiums.<\/p>\n The average cost of lender\u2019s title insurance<\/a>, based on a $200,000 home in California with a buyer credit score of 740, is $544. The average homeowner\u2019s cost for title insurance of the same home is $830.<\/p>\n Other examples of problems that could delay a closing include not submitting all your mortgage documents in time for review or the lender failing to send the Closing Disclosure<\/a> out in time. Shahani also had a closing delayed for two months because of a failed septic system on the property in question.<\/p>\n Getting everything in place for a closing can be challenging at times, and it\u2019s virtually impossible to plan for every scenario. Here are some recent new homeowners who told us how (and why) they bought their first home.<\/p>\n Jamie Birdwell-Branson, freelance editor and writer In order to avoid private mortgage insurance, Jamie Birdwell-Branson and her husband applied for a government loan (FHA, VA, or USDA) and put down 5% of the sales price of their new home. Some of these programs have their own form of mortgage insurance, but it is generally less expensive than the private mortgage insurance offered with a conventional loan.<\/p>\n \u201cWe saved up money,\u201d she says, \u201cby just putting weekly installments in our savings account as well as taking on extra gigs or side hustles to complement what we make regularly.\u201d<\/p>\n Birdwell-Branson searched for about two months for a home. \u201cI was starting to get discouraged because I had my sights set on one particular neighborhood and nothing was really grabbing us,\u201d she explains. \u201cThe neighborhood is very old, and so many of the homes were fixer-uppers <\/a>or just really outdated aesthetically.\u201d<\/p>\n Just as they were ready to give up on the neighborhood, Birdwell-Branson\u2019s real estate agent told her about a house she was about to list for one of her other clients, a house she was sure Birdwell-Branson and her husband would love. As it turned out, they did.<\/p>\n The couple switched real estate agents at this time to ensure a fair transaction for all involved (so that the same agent wasn\u2019t representing both the buyer and seller<\/a>). While the closing was quick and easy, they experienced some disappointment when they discovered that, in Toledo, sellers are allowed to negotiate that they remain<\/a> in the house for up to 30 days after closing.<\/p>\n \u201cIt was really frustrating to have to pay our mortgage and not be able to move in,\u201d Birdwell-Branson notes.<\/p>\n A couple of months after moving in, the couple discovered that, while the seller had disclosed that the basement had flooded in the past, they hadn\u2019t indicated that it was actually a persistent pattern<\/a>.<\/p>\n \u201cWe had to pay for waterproofing, which, at $12,000, was very expensive. But I love the house so much that honestly, at the end of the day, it’s not that big of a deal. Basically, you just have to be prepared to pay up when your home needs major repairs,\u201d Birdwell-Branson says.<\/p>\n Her favorite thing about homeownership? Finally having roots someplace. \u201cMy husband and I have lived in five different states, and it’s nice to finally have somewhere we can call our own.\u201d<\/p>\n Caroline, content marketing editor Caroline and her then-boyfriend, now-fiance, started saving up for their down payment about two years before they were ready to buy. \u201cWe didn\u2019t have any financial support from family or friends,\u201d Caroline explains, so they saved by \u201cjust tucking away money from each of our paychecks month-to-month.\u201d Renting a townhouse in an affordable city and working from home helped maximize those savings deposits.<\/p>\n When they were ready to start looking for a house, their timeline coincided with the spring buying season and they looked at about a dozen homes between March and April without seeing anything that seemed like a perfect fit. But their agent was keeping an eye out for homes and told them about one that was about to hit the market in an older, established neighborhood; Caroline and her fiance toured it, \u201cAnd the moment we walked into the house, we fell in love with it. That night, we made an offer for $500 over asking, to encourage the sellers to go with us rather than try to drive up a bidding war with other buyers.\u201d<\/p>\n They got the house \u2014 but there were some unforeseen expenses that emerged after closing. Fixing the garage door lift and repairing the washing machine cost several hundred dollars apiece, but the big ones involved a tree in the yard and older plumbing (the house was built in 1973). \u201cAbout a year after we moved in, we found out the large ash tree in the front yard was infected and would require removal \u2014 around $3,000.\u201d And the copper pipes in the home were corroding, which caused plumbing leaks that had to be addressed.<\/p>\n \u201cWe are planning a bathroom remodel to expand the master shower and repair some of that plumbing all at once, an investment of around $20,000.\u201d<\/p><\/blockquote>\n In retrospect, Caroline says she wished she would have dipped a little further into savings or asked family for help to scrape together the remaining 5% down to avoid private mortgage insurance<\/a>. And she advises buyers to consider moving slowly, even in a hot market. \u201cThat feeling of wanting a house and knowing you can lose it to other buyers can be overwhelming,\u201d she notes.<\/p>\n \u201cHowever, it\u2019s really important to slow down, do all of your inspections, and negotiate where you can before the deal closes, even in a seller\u2019s market.\u201d<\/p>\n Despite the expenses, though, they\u2019re happy in their home. \u201cBuying a home so far has been 100% worth it,\u201d she says. \u201cWe\u2019re building equity, enjoying so much more space and privacy than we had in a townhome, and we have a wonderful fenced backyard for our golden retriever.\u201d<\/p>\n Kate When Kate and her partner put an offer in on their home, they\u2019d only really been casually looking. Shopping for a house can be \u201cquite fun if you\u2019re not under pressure or in a bind,\u201d she notes.<\/p>\n Kate and her partner began their search with a real estate agent who was a friend, which eased any fears they might have had about being \u201cled down a path they wouldn\u2019t be comfortable with.\u201d<\/p>\n The two shoppers conducted a lot of research before even starting to look: About where they wanted to live, what they could realistically afford<\/a>, how long they wanted to spend there, what it would be like to own property, what renovations they might want to do, and how much those would cost<\/a>.<\/p>\n![\"Two](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/04\/how-does-buying-a-house-work-4-666x381.png\")
<\/a>Understanding the homebuying process<\/h2>\n
Titles and closings<\/h2>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/04\/how-does-buying-a-house-work-11-666x381.png\")
<\/a>Example 1: Putting down roots<\/h2>\n
\nBought: Toledo, Ohio, June 2018
\nPurchase price: $169,900
\nDown payment: 5% or $5,097<\/p>\n![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/04\/how-does-buying-a-house-work-3-666x381.png\")
<\/a>Example 2: Offering over asking<\/h2>\n
\nBought: West Des Moines, Iowa, June 2018
\nPurchase price: $270,500
\nDown payment: 15% or $40,575<\/p>\n![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2020\/04\/how-does-buying-a-house-work-2-666x381.png\")
<\/a>Example 3: Research and commitment<\/h2>\n
\nBought: New York, New York, 2019
\nPurchase price: $600,000
\nDown payment: 20% or $120,000<\/p>\n