Real Estate Investment 101: Getting Started

Ready To Buy A Single-Family Home? 4 Important Steps In The Process

If you are ready to purchase a single-family home, you will have to take some essential steps before you become a homeowner. Understanding those steps will help you tackle the home buying process with ease.

Step #1: Establish Your Financial Goals

First, before you start the home search, you will want to establish your financial goals. Buying a home is a big financial commitment, but it is by far the only financial commitment or priority that you may have. You need to figure out how much money you want to put into savings and invest over the next five years. You need to think about how you want to tackle your debt and what type of financial situation you see yourself in five or ten years down the road. Then, you will want to examine how owning a home will fit in with those other financial goals.

Step #2: Set a Budget

Second, once you have established your financial goals, you should have a better idea of what your budget is for buying a home. Your budget is how much you want to spend each month on your home, not the amount of money you are approved to take out in the form of a loan. It is essential to know how much money you want to spend on home each month so that you can live the life you want and reach all of your financial goals.

For example, you may qualify for a $450,000 home loan, but a home around $300,000 may better fit with your budget and financial goals.

Step #3: Pick the Type of Home You Want

Third, you need to pick the type of single-family home that you are interested in purchasing. You may want to go with a typical detached single-family home. Or you may want to go with a non-traditional single-family home, such as purchasing a condo, apartment, or townhome.

When it comes to a detached single-family home, there are lots of different home structures to choose from. You can go for a small, single-story bungalow. Or you can go for a larger ranch-style single-story home. Or perhaps a two-story ranch home is more your style. Think about the style of home that you want to live in, as this will help you greatly narrow down the choices on the market to the type of housing you really like.

Step #4: Research Neighborhoods

Fourth, you are going to want to research neighborhoods. When buying a home, you want to go beyond dividing the area you live in into big neighborhood areas; you will want to break things down into micro-neighborhoods. You are going to want to consider the school district and crime rates for different neighborhoods. You will want to consider the proximity of the neighborhood to things that you need access to, such as grocery stores, restaurants, and doctors' offices. Think about what your daily driving and experience would really be like.

When it comes to purchasing a single-family home, you want to know your financial priorities so that you can set a budget. Then, you will want to know what type of home you want to purchase, and you will want to research micro-neighborhoods. Once you have done all of this, you are ready to start working with a real estate agent to find a home for you.