Buying a house for the first time is very challenging. In fact, most Americans that buy homes, it’s one of the biggest transactions they’ll ever make. So if you’re thinking about buying a house and want to learn the basic steps or the process on how to buy a house, you came to the right channel. In this video, I’m going to talk about up to five steps on what you need to do and think about before you start looking for a house. So let’s get right into the five steps. What are there? Well, first of all, I wanted to congratulate you for watching this video, not because it’s my video, but because you are thinking about buying a house. And the number one thing to do to buy a house is commit yourself and make a decision to buy. So you’re probably watching this video because you are thinking about buying a house. So the first step to buying a house or to get your dream home is to start planning and having a budget and depends on your area. I’m in Orange County, California. So the homes are almost a million dollars. A medium home price is a million dollars. In some other states, it could be $300,000. Some states could be $400,000. The average medium price home in the United States is around $430,000. So you need to find out in your local neighborhood or the type of house you want, whether you want a townhouse or you want a mobile home, or you want a single-family home with a view, et cetera, is what is your budget? So start by planning what your budget is. And the way to find out your budget is look at all your expenses, look at your income. How much rent are you paying? Are you paying $3,000 a month rent? And can you afford a mortgage payment of $3,000 or maybe $3,500 a month for the next 30 years? So that’s the first step. And then in your strategy for your budgeting and planning, you may also want to call a lender. If you need a referral, direct message me. I’ll provide you with a lender and just talk to them.

Even if you’re not ready to buy, maybe you want to buy a year from now or two years from now, talk to a lender. They will look at your expenses and your income and other loans that you might have. And based on that, they will tell you, hey, based on your income and your expenses, whether it’s you or a spouse or a couple of people together, buying this is approximately how much you can afford and as far as the price goes and how much your monthly payments are. So that’s your first step is planning and budgeting and getting ready. By the way, my name is Mike Patel with First Team Real Estate in Orange County, California. And if you hear for the first time, or if you have not subscribed, please subscribe to my channel and make comments below on what you think you need help with most and we can share and answer your questions.

Assuming now that you know, hey, I can buy a house for X amount. Let’s say you can buy a house for $500,000. The second step is finding out where and what kind of neighborhood do you want. If you’re living in an area and you’re not very happy with it because there’s crime or too much congestion or there’s a lot of traffic to go to your work, find an area where you can go and buy a house or a townhouse and it may be 10-15 minutes drive from your work to home and home to work versus right now. You may be staying somewhere with lower rents and you’re driving an hour. Or you may want a neighborhood with low crime, or you may want a neighborhood there’s great schools or a hospital nearby or shopping center nearby, or there’s a neighborhood where there’s a bus system because you don’t like to drive. So look at those areas in your neighborhood and of course, you want to look at those neighborhoods based on your projection of how much house you can buy. So if you’re looking for a house with a big yard and a big view and you want fruit trees in the house, and if the homes are costing you $500,000 for that kind of home and your budget is $400,000, then you may not want to look in that neighborhood. You may want to settle for something less. And of course, first-time home buying is first of all, the first step is buy the house and then you can always buy your dream home, your second or third home.

I bought my first house way back for $121,000. It was a condo. I could barely afford it. It was not what I wanted. It had only two bedrooms and one and a half bath. I wanted two bathrooms and it had a very small patio. So I settled for it. But after six years I sold it and bought a big house. And 20 years later I’m still in my big house. So to get started but make sure you going to the right neighborhood and with your right budget. Don’t overbuy because a lot of people overbuy and then they stretch to make the payments. You want to buy something in your price range in a reasonable neighborhood where you feel safe and comfortable and have pride in staying there but don’t stretch for 30 years on your payments. So buy within your means.

And our third step, which is very important, is that now you have to find a Realtor that’s going to help you. So even if you’re going to buy three months down the road or a year down the road, connect with a Realtor in your neighborhood. And the reason you want to use a Realtor. First of all, in many states, at least in California, working with a buyer’s agent does not cost you anything. I’m sure you know some agents in your local neighborhood, or you might get referred by a friend or family or somebody who’s been coming at your house and knocking on your door. So call them, work with them. Let them know, hey, this is my budget. This is what I want. And they will use their expertise. They know the local trends in the market are the prices going up or down in your neighborhood? How’s the schools? How’s the neighborhood? What can you get for that kind of house? What are the best areas in the city that you’re looking for?

Just because you decided, well, I’m going to move to Anaheim, doesn’t mean it may be the best area. There are some areas in Anaheim in my local town that are spotty. I would not recommend some of my buyers to go in that neighborhood. And there are some neighborhoods that are very good. It may cost a little bit more, but it may be worth buying a house in that neighborhood. So working with the Realtors is very important. It’s very key. That’s what they do all day long. There’s a lot of disclosures, they a lot of negotiating. There’s timing, there’s termites, there’s appraisers, there’s loan. Coordinating all that is not easy. So highly recommend that as your third step. Now that you know where you’re going to move, you know your budget, work with a Realtor, they’ll show you homes and get you the best home that you need in your budget in the time frame that you’re looking for. Right now, it’s June 2023. Prices are a little bit high, interest rates are high. But if you are ready, willing, and able to buy, this is still a great time to buy. Because if you’re not sure as a first-time buyer, even though you may be paying a high price right now, in the long term, ten years, 20 years, 30 years, you will see an appreciation of your home of almost 4% per year. So in 20 to 30 years, your house is going to double or triple. That means the house that you buy today for, let’s say, $400,000, will definitely triple in 20 to 30 years. 

So it’s very important you buy the right house. And using a Realtor is the key. They do not cost you anything. By the way, if you need a Realtor, I belong to the nation’s top 1% referral network. So if you want a local Realtor and a local lender, direct message me or email me and I will refer you to an agent or a lender that will help you out with no obligation on your part to pay them. By the way, please watch till the end, because at the end of this video, I have a link to another video that I just did, and it’s called Down Payment. How much down payment do you need? This is very important for you because that will make a difference on your approval. So make sure you watch that video. I’ve had a very good response on that video. Coming to our fourth step, you’ve come a long way, assuming you are ready to buy and you started looking for homes or thinking about looking for house six months ago or a year ago, and now you are ready to buy and you have an agent to work with, you have a lender to work with. You know your budget, you know your city or neighborhood. Start looking at homes and start looking at properties with your Realtor and look for things that you need.

Do you want a house that’s ready to move in? So that if you move in on Sunday, you can go to work on Monday, or you are okay with a house that needs paint, or that needs changing of carpet, or that may need some landscaping, or do you want a house with a view? You want a house with a certain floor plan. You may have parents staying with you or an elderly grandma staying with you. So you may want a bedroom downstairs. So look for amenities like that that are specifically needed for your house and for the people that you live in. And start making offers on your budget. So that’s the crucial step, is finding the house that you need. And you have to be reasonable. Of course, like I mentioned earlier, it’s June 2023. There is not a lot of inventory, so you may want a big yard, but all the homes don’t have a big yard. And the homes that have big yards, there’s multiple offers. So you have to be reasonable and get what you can. Like I always say, if you get eight out of ten, you’re doing fine because there’s no ten out of ten. Even if you find a brand new home, there may be something not good about it. So there is no ten out of ten homes. So if you can find something that’s 80% of what you need, you’re doing fine. And good luck on making those offers.

The fifth step is assuming you found a house and you like it and it fits your criteria, and you want to move into that house and that neighborhood is to make an offer and the Realtor is going to start negotiating for you. Let them know your criteria. I’m sure they already know what you’re looking for. So it’s time for the little nitty gritties. You may want an escrow that’s 45 days instead of 30 days. You may have to negotiate with them because the seller wants to stay in the house after close of escrow, but you have to move out because you’ve given a notice to your landlord. So little things like that, your Realtor will help you out. There’s other things to negotiate as well. Let’s say you did a home inspection in the house and you found some significant repair works to be done. The dishwasher is not working, or there’s a leak in the bathroom or something’s not working. Then you may want to negotiate with the seller to fix it or give you credit. You may be getting a home with an FHA loan where you only need 3.5% down and you have barely enough money for the down payment. So you can ask your Realtor to ask the seller to give you closing cost. Maybe you need $10,000 in closing costs and up the price a little bit and then ask for the $10,000 in credit for closing costs. So little things like that, let your Realtor handle it but make sure that all those little things that you want, your moving date, you’re fixing the appraisal, the termite, on and on and on. All the disclosures, by the way, sellers have to, by law, at least in California, give you all the disclosures. Was there a person who died in your home within the last three years? Are there noisy dogs next door? Or is there nuisance and noise in the neighborhood? Maybe you didn’t know, but there’s a train running by. It until 01:00 at night, and it’s very noisy. Little things like that. You need to find out in your 17 days where in California, we have 17 days to do all the inspections and research approval. So within that time, do everything with the help of your realtor, and you’ll be ready to close and enjoy that house. Please make comments. If you have any questions, direct message me and please watch this video. It’ll be very helpful. On how much down payment do you need? Do you need 20%? Or can you get by with three and a half percent?