Buying a new home is an exciting time in your life. It’s also a lot of work.
Make sure you know what you’re getting yourself into before you jump into the home buying process in Kansas. Get everything in order before you find yourself overbudget and in trouble.
Step 1: Evaluate Your Current Financial Situation
It’s important to really understand your financial situation before you decide when to buy a house in Kansas. Some of the things you’ll need to take into consideration are your credit score, savings, and financing options.
Know what your credit report says and make sure there are no mistakes. The higher your FICO score is, the more likely it is that you’ll have multiple options for financing.
Figure out how much you can afford to put up for your down payment and closing costs. Some loans can require as much as 20% down, but others require much less. There are also government programs that can help lower the down payment or help you cover up-front costs.
Your mortgage isn’t the only thing you’ll need to budget for if you become a homeowner. Be prepared to pay the additional costs that come with homeownership. Costs like homeowners insurance, property taxes, and general upkeep can add up. If you’re used to renting, consider whether you’re ready to handle all of the things you would currently call a landlord to fix.
More than just a monetary decision, buying a home is also a lifestyle choice. Even in a seller’s market, you generally need to stay in your house for at least a couple of years before you recoup your buying costs. As a general rule, you should be relatively sure you want to live in your home for a while before making an offer.
Step 2: Find a Great Kansas Real Estate Agent
Every home buyer should work with a knowledgable real estate agents who is an expert on the area. An experienced buyer’s agent can walk you through each step of the process and help you save money on the way.
The commission for the buyer’s agent is typically paid by the seller, meaning buyers get this service free of charge.
Still, having the right agent provides many benefits to potential home buyers. Clever Partner Agents provide a full-service experience, with on-demand showings so you can look at homes on whatever schedule works best for you.
You can also save money with a Home Buyer Rebate, also known as a commission rebate, and get back a portion of the commission you paid. You can then use this money for their down payment, closing costs, or mortgage payment, or even opt to receive cash at closing.
Learn More: What Does a Real Estate Agent Do for a Buyer?
Step 3: Read Up on Local Real Estate Market Trends
The time of year you buy a house has an impact on how much money you’ll spend and how much selection you’ll have. For the lowest prices, look in late fall and winter. For the biggest selection, look in spring.
Even within a market, there are often regional, city-level, and even micro-level trends. The complexities of seasonal fluctuations are another reason to work with an experienced realtor. Your real estate agent will help you time your purchase to get the best possible price in the market.
The Kansas market is both affordable and hot. The median home value in Kansas is $140,700, $86,000 lower than the national median, according to data from Zillow. That said, Kansas home values are on the rise. Home values in Kansas went up 6.8% last year and are expected to increase another 3.2% this year.
Learn More: Will it Be a Buyer’s or Seller’s Market in 2019?
Step 4: Get Pre-Approved for a Mortgage
When applying for a mortgage, you’ll need to go through both pre-qualification and pre-approval.
Pre-qualification is when a lender gives you an estimate of what you can afford to spend on a home, based on your unique financial and personal circumstances.
Pre-approval is a more thorough process, where the lender runs your credit and determines what amount and interest rate they can approve you for. Your pre-approval will last for a set amount of time.
Once you have your pre-approval and know how much you can afford for your down payment and closing costs, it’s time to start house hunting. By this point, you should know exactly how much you can spend; this will help you narrow down houses and neighborhoods in your price range.
Step 5: Start House Hunting
You should sit down with your real estate agent before you start looking at homes. Your agent will help you figure out your needs, assess your priorities, and stick to your budget.
Your agent will be able to guide you towards options that you can afford. There’s no point in looking at properties that are out of your price range or don’t suit your needs.
Your agent will likely come to you with a number of listings and walk you through them. From there, you can decide which homes you want to see in person.
Learn More: Free House Hunting Checklist
Step 6: Make an Offer
Once you’ve found the right home, you’ll want to make an offer.
When you have a figure in mind but before you make your offer, talk to your real estate agent. Your agent will tell you whether your number is reasonable. They’ll also help you figure out an expected closing date. Local realtors know extensive details about their markets and can help you craft an offer that’s likely to be accepted.
Your offer may contain some contingencies. Some common contingencies included with offers require appraisals and home inspections before the sale is finalized.
The offer should specify how long the seller has to make a decision. They may decide to accept, reject, or make a counter offer.
When you get to this point in the buying process, you’ll need proof that you’re able to pay for the home (i.e., your pre-approval letter). You should also be able to demonstrate how you’ll cover closing costs and the down payment if your offer is accepted.
Your real estate agent should walk you through each of these steps and the paperwork that goes with them.
Learn More: How to Make an Offer on a House
Step 7: Inspections and Negotiations
Home inspections are an important part of the buying process. Virtually all mortgage lenders require home inspections. And even if you’re paying cash, a home inspection can find hidden flaws that you can’t see with the naked eye. Home inspections can uncover serious problems, like issues with the foundation, mold, or pests.
Depending on the type and size of the property, home inspections typically cost somewhere between $300 and $500. This cost is usually paid by the buyer, but you may be able to negotiate with the seller.
When you make an offer, it should include a limit on the amount of money you’re willing to pay for repairs. Then, if a home inspection uncovers major problems, you’ll have several options. At that point, you can try to negotiate a new price for the property, decide to pay the total or partial cost of the repairs, or walk away from the deal.
Real estate agents are expert negotiators who can help you with home inspections and the related negotiations. Realtors also know when you should push back in negotiations, particularly given current market conditions and the level of competition for the type of home you’re looking to buy.
Step 8: It’s Closing Time!
After the negotiation, inspections, and paperwork are all finalized, it’s closing time.
Closing time is when you’ll pay the closing costs. In addition to the down payment, buyers should generally expect to pay about 3% of the home sale price in closing costs. For a median Kansas home worth $140,700, the closing costs would likely be somewhere around $4,221.
Some of the costs you may have to pay at closing are:
- Loan fees and private mortgage insurance (PMI)
- Appraisal fees
- Escrow for homeowners insurance and property tax
- Deed recording fees
- Prepaid costs to your lender
- Title insurance and survey fees
- Prorated utility costs the seller has already paid
Closing costs vary from market to market and situation to situation so it can be hard to pin down an accurate estimate. An experienced real estate agent can help you set realistic expectations with regard to what costs and fees you can expect come closing time.