Buying & Owning a Home
Providing Everything You Need
Buying a house is usually the largest purchase any of us will make. It rarely can be accomplished quickly and easily. And yet, as a country, we are always on the move. Approximately 6.27 million homes were purchased in 2018, but according to the National Association of Realtors, the typical American home turns over every nine years.
Choosing a Real Estate Agent or Broker
Armed with the knowledge of your financial limits, you are ready to contact a real estate agent or broker to discuss your plans. Brokers are the legally responsible parties in real
estate transactions, while agents act more as salespeople. A real estate agent may have a broker’s license or may work for a broker. Nearly every buyer in the traditional market buys
a home through an agent or broker.
It is important to choose your real estate agent with care. A good agent:
Helpful Hints
• Has excellent references from family members, friends or (your) co-workers.
• Knows the property values and neighborhoods where you are planning to look.
• Works as an agent full time and has a record of successful sales.
• Understands the buying and selling process and is an expert in the types of properties you are considering.
• Has a personality and style that gives you confidence you will find the right home at the right price.
Do your homework
Shopping for a Mortgage
Secure Your Financing First
Once you know what kind of home you’re looking for and where you want to live, the next step is to line up your financing before house hunting. Start by shopping around for a loan. Search online, visit your local bank or credit union, and talk to a mortgage broker.
A good lender should:
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Be straightforward and honest.
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Understand the local housing market.
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Know the mortgage business and help you find the best loan for your situation.
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Offer competitive loan terms.
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Stick to deadlines and agreements.
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Never pressure you into borrowing more than you can afford.
Instead of going directly to a lender, you could also work with a mortgage broker. Brokers act as intermediaries, shopping around for lenders on your behalf. They usually charge a fee ranging from 0.5% to 2% of the loan amount.
Take time to explore the many types of mortgages available—fixed or adjustable rate, 15-year or 30-year terms, government-backed loans (like FHA or VA), and more.
Your lender can help you get pre-approved, a process based on documented and verifiable financial information such as:
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Employment and income
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Existing debts
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Cash reserves
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Tax returns
Pre-approval shows sellers you’re a serious buyer and gives you a competitive edge over others who haven’t proven their creditworthiness.
Avoid Trouble
In past years, many homeowners defaulted on their mortgages because they misrepresented their finances or worked with unethical lenders who overlooked red flags just to close more deals. Always be honest about your financial situation and choose a lender with a solid reputation.
Find the House, Seal the Deal
Once you’ve been pre-approved, you’re ready to start narrowing down your home choices and negotiating with sellers.
The average homebuyer searches for about 12 weeks and tours around 12 homes. Your real estate agent will help you understand the value of homes in your target area by using a Comparative Market Analysis (CMA)—a report showing sales of similar properties in the neighborhood over the past six months.
When you find a home you’re seriously considering, you may want to get an independent appraisal, which your lender will require anyway.
Knowing a home’s true market value helps you make a smart offer and negotiate with confidence.
Buyers and sellers can waste a lot of time if their expectations about price are far apart. Be patient, realistic, and flexible when making an offer—and don’t hesitate to walk away if you can’t reach an agreement that works for you.
Once your offer is accepted (even conditionally), order a home inspection. This step can reveal hidden issues that may require repair, renegotiation, or even cause you to walk away from the deal. Make sure your purchase contract includes contingencies that allow you to cancel if the inspection reveals serious problems or if you can’t finalize your mortgage.
Final Steps Before Closing
After agreeing on a purchase price, your lender will request:
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Proof of homeowner’s insurance
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A home appraisal
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A property survey
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Various inspection reports
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A final version of the sales agreement
Once all documents are in place and your loan is approved, you’ll be ready to set a closing date and officially seal the deal.
Preparing for Closing Day
Closing is the final step in the homebuying process, when ownership of the property officially transfers to you. A day or two before closing, schedule a final walk-through of the home to make sure everything is in the condition agreed upon in your contract.
Request a copy of the closing statement from the title company ahead of time, and take the time to review it carefully. Make sure you understand every charge. If anything seems unexpected or unclear, don’t hesitate to ask questions. These are legal documents you’ll live with for as long as you own the home, so consider reviewing them with a lawyer or adviser if you feel unsure.
Typical Closing Costs Include:
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Title search and title insurance
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Home inspection and other related fees
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Private mortgage insurance (if your down payment is under 20%)
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State or local fees such as transfer taxes, deed recording, or documentary stamps
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Additional administrative and paperwork fees
When you attend the closing, bring proper identification and a certified check or money order to cover your down payment and any remaining costs listed in the closing statement.
Once the papers are signed and the funds are transferred, the journey is complete—you’re officially a homeowner!
Now begins a new chapter full of responsibilities, joys, and learning experiences. And if you're like many Americans, it might not be your last move—chances are, in a decade or so, you'll be ready to start this process all over again.
Buying Homeowners Insurance
Before your lender will agree to let you borrow money to buy your home, you must agree to insure the home. And you must have this insurance lined up before you can close the deal. Having homeowner’s insurance (also known as hazard insurance) is a requirement before a lending institution will allow you to obtain a mortgage or complete a home sale. This insurance is also designed to protect the homeowner from being forced to go into debt when an emergency occurs. The coverage puts a homeowner in the financial position to repair or rebuild the house.
Types of Home Insurance
🏠 Understanding Homeowner’s Insurance:
What You Need to Know Protecting your home starts with the right insurance coverage. Whether you're buying your first home or reviewing your current policy, understanding your options can save you time, money, and stress down the road.
🔍There are two primary types of coverage
1. Cash-Value Coverage
This policy pays for the depreciated value of your home and belongings. While it tends to have lower premiums, it likely won’t cover the full cost to rebuild your home after a major loss.
2. Replacement-Cost Coverage
Recommended by most experts, this coverage pays the actual cost to rebuild your home using similar materials, regardless of your home's current market value. That means you're covered even if construction costs have gone up.
Tip: Use your home appraisal and your insurance agent’s cost worksheet to estimate an accurate replacement value.
💼 What Affects Your Insurance Needs?
Your homeowner’s insurance should reflect your personal situation. You may need additional coverage based on:
Location: Coastal or high-risk weather areas may require special policies.
Natural Disasters: Flood and earthquake insurance are typically sold separately.
High-Value Items: Jewelry, art, or collectibles may need additional riders.
Special Circumstances: Historic homes or home-based businesses may require custom coverage.
💸 Understanding Deductibles and Premiums
Your deductible is the amount you pay out of pocket when filing a claim. A higher deductible means lower monthly premiums, but more out-of-pocket when disaster strikes. A lower deductible means higher monthly premiums, but less to pay in a claim. Choose a deductible that balances your monthly budget with your risk tolerance.
✅ How to Choose the Right Policy
Not all policies (or insurers) are created equal.
Here’s how to choose wisely:
Compare quotes from multiple insurers
Check the company’s financial strength (A.M. Best, Moody’s, etc.)
Look for customer reviews and BBB ratings
Understand what’s excluded from the policy
Ask about bundling options (home + auto = discounts)
🔒 Tips to Lower Your Premium
You can often reduce your insurance costs by reducing risk:
Install a security system or monitored alarm
Add deadbolt locks and smoke detectors
Maintain a strong credit score
Choose a higher deductible (if affordable)Avoid filing frequent small claims
📝 Final Thoughts
Your homeowner’s insurance should grow with you. Review your policy yearly, especially after major purchases, renovations, or changes in property value. Don’t be afraid to ask your agent questions — a little knowledge goes a long way toward peace of mind.
What Factors Raise Homeowners Insurance Prices
Many of the factors that cause home insurance rates to go up every year can’t be avoided, but there are just as many common sense ways to reduce your risks and make your home safer. The most obvious reasons your insurance gets more expensive include:
• Risky structural designs like wood-burning stoves or fireplaces, balconies or spiral staircases that increase the likelihood of a fall, dangerous electrical wiring, and roofing or plumbing that needs to be updated or replaced.
• Claims made on previous policies, especially when renting.
• You were canceled by a previous insurer because of non-payment.
• You live in a flood zone or areas that regularly are hit by fires, tornadoes, hurricanes, severe snow or ice storms.
• Dangerous elements in or around your house like a swimming pool or dogs, whose bites account for a large amount of claims.
• If crime has increased in your neighborhood, your premiums may reflect the increased risk the insurer feels he or she is taking on.
Other costly features that add risk to the insurer include trampolines, tree houses or backyard zip lines.