3 Parts Of The Home-Buying Process You Might Not Understand As A First-Time Homebuyer

Posted on: 20 November 2019

The home-buying process is an event that can take time and money and can be confusing, especially to first-time homebuyers. If you are buying your first home and feel confused about the process, you are not alone. There are a lot of steps in this event that may cause some confusion, and here are three parts of the process that first-time homebuyers often have questions about.

The contingencies

If you are buying your first home, you will probably hear the word "contingencies" come up during the process, and this is a term you might not be familiar with. It is an important term to understand, though, as the buyer of a house. A contingency is basically a request you will make to the seller of the house you are trying to buy, and it asks the seller to agree to something. You can add one to ask the seller to pay money towards your closing costs, or you could add one to ask the seller to update the bathroom in the home. Adding contingencies is one of the best forms of negotiations when buying a house and adding them also protects you.

The costs

A second thing you might not understand about buying a house is all the costs involved with it. You probably realize that buying a house is expensive, and you can see that simply by looking at price tags on homes, but you might not expect to have to pay all the extra expenses that come along with the purchase of a house. To avoid surprises financially when buying a house, make sure you thoroughly research all the extra costs you may have in the process.

The difference between preapproval and approval for the loan

One other thing that might come as a surprise to you is the difference between getting preapproved for a loan and getting approved for it. To shop for a house, you will need to get preapproved, which means that you appear to qualify for a loan. Preapproval does not mean that you are approved for a house, though. You will need to first select a house to buy and then allow your lender to evaluate your entire financial situation and the house you are buying before you can find out if you can actually get approved for the loan you need to close on the deal.

Knowing and understanding these three parts of the home-buying process can help you feel more confident during the process. To learn more about these aspects and others, talk to a real estate agent today.