10 Simple Steps to Buying a House in Chicago
So you're thinking about buying a house in Chicago? The first step is to figure out if you are ready. There's plenty of information online about the step-by-step process, but this blog post will provide 10 steps that will help you from start to finish.
We'll cover everything from how much money for a down payment to finding the right realtor, getting home inspections and appraisals, and what to expect during the closing table!
Here are the Ten Steps to Buying A House in Chicago
- Are You Ready To Buy A house?
- How Much do you need for a down payment?
- Finding the right Real Estate Agent
- How much can you afford to buy?
- Determine your housing needs?
- Making your first offer
- Getting a home inspection
- Get a home appraisal
- Final walk-through
- Closing Table
Step #1- Are You Ready To Buy A House?
The first step to buying a house is to meet the necessary requirements, are you ready for the commitment a home will bring? Most real estate agents will tell you that buying a house is the best decision you can make, this can be true for some people, but not all.
Families would benefit most from buying a house, and for this reason, it's what our step-by-step process is based on.
If you're financially stable enough to afford the mortgage payments, don't have any outstanding debt that will affect your credit score (like maxed out credit cards), and are confident in knowing you'll live in the same location for 10 or more years. If you answer yes to all of these, buying a house is right for you.
If you're still not sure, there's a step-by-step process for this too on our website. You can learn more about the pros and cons of buying a house in this blog, or you can watch the video in this section.
Step #2- How Much do I Need For A Down Payment?
The next step to buying a house is determining how much money you need as a down payment. This amount will vary from person to person and it's not always an easy number to reach.
When you're buying a house, the most common amount for a down payment is 20%. This can be exhausting if not nearly impossible for some people, depending on how much they've saved and their current income. That's why there are other options available such as FHA loans which only require a three or five percent down payment.
To learn more about how much do I need for my down payment, please visit this blog post all about your down payment.
Step #3- Finding the Right Real Estate Agent
How do I find the right real estate agent?
Finding the right real estate agent can save a load of trouble and heartache. A realtor is a person who will help you find your home, and walk you through the entire process step-by-step. They are also responsible for things like negotiating on your behalf and making sure everything is handled correctly whether it's getting inspections or finalizing paperwork with lenders.
When finding a real estate agent, there are some important factors to take into consideration.
- Experience The more experience a real estate agent has, the better. Just like with doctors and personal trainers (at least when you're starting out), an experienced agent will know exactly what they are doing step by step to buy your house without any complications or confusion along the way.
- How much time do they spend on your case? It's important to find a real estate agent that will be dedicated 100% to you. You want someone who is going to treat this experience as if it was their own home, so make sure the person spends enough time with you in order for them to find you the right home.
You can learn more about how and where to find the right real estate agent here.
Step #4- How Much Can I Afford to Buy?
Determining how much you can afford for a house definitely requires some math. If you are anything like me, I prefer to insert a few numbers here and there and see what figures my calculator spits out.
But the truth is that calculating your maximum budget when buying a home goes deeper than just punching in numbers into the device hoping it'll spit back something affordable.
There are factors essential to take note of before making this decision.
Some of these factors are down payment, closing costs, and the number of your monthly mortgage payments. These together will give you an idea of how much house you can afford to buy at this point in time. You can learn more about how much house I can afford here on our website.
For step-by-step help, please visit this blog post or watch the video in this section.
Step #5- Determine Your Housing Needs
I know you don't want to settle for anything less than what makes your heart sing, but almost everyone searching has a needs vs wants conundrum. If you aren't clear about the difference between those two from the get-go, it could lead to frustration and wasted time/money.
The first step of determining what's right for you is to determine your housing needs.
What are the basic elements that make up a home?
- How many bedrooms do I need? Think about how large or small this space will be and if there might be future additionals in the mix (i.e., children, pets).
- How many bathrooms is a must?
- Square footage.
After determining your housing needs, you can then step into the wants category and look at things like amenities such as space for entertaining or even just wanting to be closer to work/loved ones. These are all details that will help narrow down the search process.
If you would like to learn more about how to determine your housing needs, you can find more information in this video or by visiting this blog post.
Step #6- Making Your First Offer
Ok, you found the right house and are ready to submit an offer, but how much should you offer?
There are a few factors to take into consideration so that your first offer is as strong as it can be. One of those things being the market value of the home, market condition, and competition. Making an offer on a home requires data-driven decisions, with the help of your real estate agent.
If you would like step-by-step help in making an offer, please visit this blog post or watch the video in this section.
Step #7- Getting A Home Inspection
The next step in the house buying process is to get a home inspection. Get ahold of family members, friends, and your real estate agents for suggestions.
Find a home inspector that you trust and has great reviews. If you are under contract hurry and set an appointment to meet with him at the home you are buying.
If you would rather not deal with finding an inspector, you can contact your real estate agent, who will recommend someone for you or be able to help with scheduling it via phone call/email.
Once scheduled and completed, expect feedback from the inspector as to the condition of the property you are purchasing. You can find step-by-step help on what to do during a home inspection by watching the video below.
Step #8 Get a Home Appraisal
The next step in buying a home is to get a home appraisal.
When you buy a home, your lender will require that the property be appraised. Don't worry; this step makes sure that you are getting what you paid for and is not an indication of how much more (or less) it may go for sale in the future.
If you are getting a loan to purchase your home, the lender will request and schedule an appointment for an appraiser to visit the property. They will be looking at specific things like how many bedrooms, bathrooms and square footage there is. This step ensures that you are not overpaying for your home or getting into something way more than what it's worth.
Step #9 Final Walkthrough
The next step in buying a house is to perform the final walkthrough. By this time, you should have already had home inspections done and likely an appraisal as well. All of these steps are important for your peace of mind while purchasing a new home, but also solidifies everything that has been done thus far before the closing day arrives on the property.
A final walk-through should be performed at least 24 hrs before heading to the closing table. This step ensures the home is how it should be and you are satisfied with the home's current condition.
Step #10 Closing Table
The last step in the home buying process is closing on your home and heading to the closing table. The closing is usually performed at a local title company, usually one nearest to the home being purchased.
By this time, you have likely received a 'Clear to Close' from your lender. This step indicates that all inspections have been approved and you are ready to close on the home with a signed contract from both parties.
Finally, after the amount of paper is signed, it's time to celebrate. Congratulations on buying your new home!!!
Buying a home is an exciting step, but it's also one of the most complicated and expensive decisions you'll ever make. Thankfully this blog post has given you 10 steps to buying a house in Chicago, including what to do when getting ready for closing day. The last step should be celebrated with friends and family because once all the paperwork is signed, your new place awaits!
If you are in the Chicagoland area and would like a helping hand in finding the right home for you and your family, please contact us. We would love to help.
Posted by Rafael Velasco on