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How does buying a house work?

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Okay, so you’ve read enough threads on Reddit, poured over comments on real estate FB groups, and talked to your friends and therapist about it. You’re ready to get serious about buying a home. So how exactly does one go about buying a house? Let’s dig in:

Buying a house isn’t as simple as online shopping. While there are a bunch of sites that make it easy for you to look through listings—hello, Zillow and Trulia! Once you narrow in on what you want, you usually need to go through a real estate agent or broker.

A real estate agent can help you find that dream home—or at least one that checks off most of your criteria—acts as an go-between with you and the owner, and walks you through the paperwork and overall homebuying process. They can put in an initial offer, and also handle any negotiating that takes place.

Yes, you heard correctly, initial offer. That’s because there is an opportunity to negotiate for a different price after you’ve formally inspected the house. For instance, let’s say the house is in a different state than what’s listed (if you thought fudging height on Tinder was bad, just wait). In that case, you can put on your bargaining hat and put in a different offer.

Buying a house usually means taking out a mortgage. Unless you have, say, $200,000 in cold, hard cash sitting in your bank account, you’ll need to get a mortgage. This involves going through a qualification process. To apply for a mortgage, you’ll need to offer information such as your income, debt, and other assets. Most likely, you’ll need to have on hand bank statements and tax returns.

Plus, the lender will need to do a hard pull on your credit. A hard pull means that the inquiry shows up on your credit report and could mean your score takes a small hit.

As you can see, buying a home can be a tricky, complex process, no doubt. As the old-school PSAs would say, “the more you know,” the better off you’ll be. It’s best not to go into it blindly, and do your homework ahead of time.

Still have questions?

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