You should consider buying a house in Columbus, Ohio, for several reasons. Along with being among the most affordable states in the U.S, the state has a low cost of living and endless attractions, including waterfalls, theme parks, lakes, and rivers. Due to these factors, Ohio has a hot real estate market as buyers take advantage of the booming jobs and affordable housing.
Like other states, buying a house in Ohio is an exciting yet overwhelming process, especially for first-time home buyers. Below is a guide on how to purchase your new home in Columbus, Ohio, seamlessly.
Have a Budget
Before you hunt for potential properties, you should have a clear budget. This means finding out how much it costs to buy a home in the state. Unfortunately, most buyers only focus on the purchase price of the house. Ideally, you should look beyond the property price. Important things to consider include:
- Property taxes
- Homeowner’s Insurance
- Private mortgage insurance for buyers with a down payment of less than 20%.
- Hidden costs, such as home maintenance and lawn care. Zillow estimates show that homeowners in Columbus spend up to $9,050 on hidden costs annually.
You shouldn’t spend more than 28% of your pre-tax or gross income on these costs. With that in mind, you should evaluate the average cost of properties in Ohio. Below is how median property prices in top metropolitan areas in Ohio compare:
- $159,400 in Columbus
- $147,800 in Cincinnati
- $80,100 in Akron
- $71,100 in Cleveland
- $66,500 in Dayton
Apply for a Mortgage or Financing
Once you’ve identified an area you can afford, you should then seek pre-approval for a mortgage or financing. Unless you can pay for the property in cash, you should find a reputable lender with the best rates possible. Start by comparing various lender terms and rates. You should also seek pre-approval for specific loan amounts. You shouldn’t search for homes that are above what you can afford.
You should submit the necessary documentation to your preferred lender for pre-approval. Most lenders require these documents for pre-approval:
- Income verification – Include W-2s, 1099, and proof of rental income
- Asset verification – Bank statements, brokerage, and retirement accounts
- Debt verification – Documents showing monthly payments of debts and their amounts. This includes payments for personal loans, car loans, credit cards, and student loans.
- Proof of rent paid – Renters’ proof that they’ve paid their rent for the preceding 12 months.
- Gift letter – Only applies to those with gifted down payments.
Lenders often check your credit score during the pre-approval and mortgage process. Most lenders preapprove financing for individuals with credit scores of 620 and above. A higher score qualifies you for better rates.
Choosing an Attorney
While working with a real estate attorney when buying a home in Ohio isn’t mandatory, having legal guidance is beneficial. A real estate lawyer should step in if transactions involve legal issues. For instance, you should consult an attorney when buying a house with existing tenants directly from the owner (FABO) or cash home buyers.
With the preapproval report ready, you can then proceed to look for a house. This is probably most buyers’ favorite activity. You should consider several factors before making an important buying decision. You can also search for listings from the Multiple Listing Service. Other options to find available properties include:
- Attending open houses – Purpose to attend multiple open houses, which are mostly held on weekends. They provide a unique opportunity to view different home designs and styles within your price range.
- Internet search – You can find several properties matching your price range online.
- Driving around – Spending your time driving around the neighborhood can also yield good results.
Ensure that you prioritize your needs when choosing a house.
Making an Offer and Negotiating
You shouldn’t hesitate to make an offer immediately after you find a property that meets your expectations. Homes in Ohio remain listed for approximately 75 days on the market. However, they can be snatched quickly during busier months. You should study the local market and give a reasonable offer price. Evaluate other property sales in the neighborhood, amenities, and other factors that can affect the price. You should include the following in the offer:
- Property price and earnest money deposit
- Attorney review
- Home inspection
- Duration of the offer
- Financing details
- Closing date
Upon receipt, the seller can either make a counter offer, accept or reject the offer. Depending on the seller’s response, you should prepare for negotiations. Once you reach an agreement, you will be termed to be under contract.
Inspection and Appraisals
Home inspection and appraisals allow potential buyers to evaluate the house’s condition better before closing. You can use this opportunity to renegotiate the terms of purchase with the seller if an unexpected reality pops up.
You should hire a licensed home inspector to check the roof, foundation, HVAC, electrical, and plumbing systems. Radon testing and pest inspection are Ohio-specific inspection requirements that should also be done. Appraisals are necessary to determine the true value of the house. This is important for those using mortgages, as lenders often order an appraisal to determine if the property is worth the loaned amount.
Closing the Sale
This is the last step before owning your new home. After your financing has been approved, funds availed, and contingencies met, everything is set to close the sale. However, you should prepare for the following before signing the purchase agreement:
- Deposit the earnest money
- Meet with the lender to confirm financing
- Take a home warranty and homeowner’s insurance
You should also be ready to meet the closing costs. Closing costs include a loan origination fee, survey, title insurance fee, and deposit for insurance and tax escrow.
Buying a home in Columbus, Ohio, is a great milestone for new and seasoned homeowners. The entire process can take several months, depending on the market conditions, local economy, and financial situation. You should understand Ohio’s home buying process and real estate market trends to navigate the complicated purchase process smoothly.