Buying real estate can be a very daunting task. For many of us, it is one of the most significant achievements. For some, this may be your next investment property. After all, real estate is a property that gives us a home, a haven, an area that fosters creativity. Real estate properties are excellent for investors because they are one of the most secure ways to invest your money, especially in 2022. However, for first-time homeowners, the entire process has so many ins and outs. If you are unfamiliar with the process, you may lose a lot of money. Worse yet, you may be delayed in closing your first home. Here is the step by step on how to purchase a real estate property.

1. Search for your home or investment properties.

There are many ways to search for properties that you are looking for. You can use websites like Zillow or hire a personal realtor to help with your home searching endeavors. I recommend using a personal realtor as they can provide you with homes not currently listed on the websites. Sometimes these deals are much better than those in the market. A seasoned realtor will help you with everything along the way, including running home inspections and signing the contracts. Also, explore foreclosure homes as sometimes you can make a steal. Those are the homes that people decide not to purchase after modeling and renovations. On the other hand, websites like Zillow give you many options to choose from. You can pick homes that are brand new. Or you can pick homes with a range of prices without interacting with an actual person.  If you are interested in some of the things I look for when it comes to buying real estate, feel free to read some of my other articles on my blog.

2. Get mortgage pre-approval from your bank.

It would help if you had a specific price range that you could afford before you do house shopping. Don’t be the type of person who is house-rich but poor in real life. This is also important because you need to find out all of your financial situations before you commit. You will feel terrible if you find some real estate that you truly love, but later on, you will not be able to afford it because of your credit score. Make sure to connect with your bank to see how much money you qualify for. Depending on your needs, you can choose a shorter or longer-term mortgage. For your first chase, I recommend a 20% down payment on a 30-year-long mortgage. On the contrary, I recommend a 50% down payment in a 10 to 15 years mortgage for any investment property. This is to ensure that you are not tied down with a lot of debt that you may not be able to pay back.

3. Tour the home and make sure everything looks okay.

This is the fun part. Make sure to tour your home and spend a good deal of time in the neighborhood. You want to make sure there are no plumbing issues. The location is good. And the market price is fair. Set up a time with your agent so you can spend a fair amount of time touring this place. For the most part, you want everything to be included, such as a washer, dryer, oven, etc. These are not mandatory but trust me, they will make your life so much easier when you don’t have to shop for additional items after moving in. Make sure a water softener is installed, and maybe solar panels if possible. This will save a lot of money on plumbing and the electric bill. When you decide to buy this home, you can perform an actual inspection, often paid by the seller before the title transfer.

4. Negotiate and sign the contract.

Don’t forget to negotiate with the seller. It is never inconvenient to negotiate a better price when buying real estate. I recommend a 5 to 10% negotiation from the asking price. Do not give a low ball offer as you may not be able to win the bid at all. Most sellers are often okay with reducing by 10 to 20k of the asking price. Make sure to do your homework, and your real estate agent will give you a better idea of how to do this. If you are lucky, the seller will agree with your bid price. Then you will be working with an escrow company regarding your deal. It is a third-party company that ensures the exchange occurs fairly between the buyer and the seller. An inspection will happen before the payment and the processing of all the legal documents. Once all the documents are signed, the payments are received (either from your account or through a mortgage). Then you are done! Don’t forget to set up your bills, and pay for property taxes and HOA fees. Congratulations! Now you get to do it again!

Thank you so much for reading my blog. I hope this article has helped show you how to buy your first real estate. Please like, comment, and subscribe if you enjoy content like this. Have a great week!

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