How to Buy a Townhouse

A townhouse can be an attractive, convenient option for a homebuyer.

Home ownership is the quintessence of the American dream, the largest investment most people ever make. If you are a first-time home buyer, there are a few things you will want to know before you start looking at homes. And for many people, including first-time buyers, smaller size and lack of lawn-care responsibilities make a townhouse a good choice.

Things You'll Need

• Pre-qualification for a mortgage
• Real estate agent
• Inspector

Instructions

Pre-qualification

1. 

   Verification of income is part of the pre-qualifying process.

   First, you will need to get pre-qualified by a mortgage company. This means the mortgage company will look at your situation based on a number of factors to decide if you qualify for a home loan, and for what amount. Information that most mortgage companies will require is Social Security number, bank statements, W2s for the past several years, verification of income and your driver's license. In addition, they will run a credit check and get your FICO score (a gauge of credit risk). All of these factors will determine whether you can be pre-qualified.

2. 

   Get a referral on a real estate agent from a friend or family member if you can.

   Once you are pre-qualified, you will need to find a licensed real estate agent. You can ask friends or family if they can recommend one; referral is one of the biggest way agents get new clients. If you can't get a referred agent, you can type your city into a search engine with the words "real estate agent." Once you have found an agent, he or she most likely will want a letter from your mortgage company stating approval of pre-qualification for a home loan, and for how much.

3. Next, you will actually start your search for a home and view some possibilities. Your agent may start this process in several ways. One is to search the Multiple Listing Service. He or she may ask what you are looking for and email you a number of possibilities in your price range or take you into the office to look at information on some listed properties. Then you will be ready to look at the houses.

4. 

   It may take a couple of offers and counter-offers to agree on a price.

   Once you have found a house you like, you and the agent will write up a price offer on it. If your offer is accepted, you and the seller will agree on a closing date.

5. Before the closing, you will have a period in which to get an inspection done. Your agent should have you purchase an option period. It gives you a way out of the contract, with no penalty, in the event that the inspection provides a bad report and the costs to repair the problems are too high.

6. 

   Townhomes may be ideal for first-time buyers.

   At the closing, you will sign all necessary documents for the purchase of the home. Chances are, the sellers will close at a different time on the same day. In many cases, you will not receive the keys to your new home at the closing. It is not until funding has gone though from your mortgage company that you will receive your keys. Once you have a copy of all documents and your keys, you will be a homeowner.

References

• Move.com/guide
• Portal.hud.gov