Buying a house anywhere in the USA is not an easy task, especially with the state of the economy at the moment. When you first start looking, it might make you feel like you took on a part-time job, considering how much work it can be to find the ideal place. But with the right preparation, it’s much easier.
If the state you chose to buy a house in is Minnesota, you should look into what applies to this state specifically. Even if you’ve already gone through a home-buying process in a different state. And especially if you’re a first-time buyer.
Reasons to buy a house in Minnesota
The situation in the housing market is finally normalizing after the pandemic. So no matter if you are already a Minnesota resident or planning to move there, this is a good time to buy and it’s significantly more convenient than renting. Provided that you have a good credit score and you plan to call Minnesota your home for a long time.
Two things are currently advantageous for the buyer:
- there are more homes available for sale in Minnesota now than in previous years
- the median sale price in the state, even though it’s increased, it’s still more affordable than the national median one
In addition to these facts, Minnesota is quite a diverse state. That means every type of future homeowner can find a location fitting their needs. For example, there’s the urban hustle and bustle of Minneapolis – a city once voted the best place to live. But there are also remote and calm places if you prefer nature, peace, and quiet. All you need to do is decide what you want. The cost of life might also vary significantly so don’t forget to consider that when choosing the location.
So, what are the things to consider when buying a house in Minnesota?
Here are some things to make sure you do to buy the house of your dreams in Minnesota.
Think about your needs and possibilities
Try to be as realistic as possible when it comes to what you wish for, what you need, and the money you have at your disposal. It’s not a bad idea to have a wish list and treat this house as your dream home. It’s fine to want a big front yard, porch, giant kitchen, etc.
But you should also be prepared to compromise. If a house doesn’t have everything you wanted, try to prioritize based on your family’s needs. Because, sure a jacuzzi is great, but maybe a big kitchen or a yard will benefit you more if you can’t have both.
On top of that, make sure you understand what you can afford. Experts advise to try and save for a down payment first if possible. In Minnesota, the down payment is usually around 20%. You can also find a way to get this amount through government-backed loans.
When you are done with the down payment, it’s time to focus on the rest of the money – your mortgage. To avoid disappointments, and make this process less stressful, you should pre-qualify for a mortgage through a lender. That way you’ll know the amount of money at your disposal. Not to mention some sellers might require you to have it before even showing you the house.
Hire professional help
The essential professional to help you buy a new house is, of course, a real estate agent. When looking for one in Minnesota, make sure they are experienced. Read reviews of previous customers and find out how many houses they sold in the previous year.
Additionally, you should ensure that the houses they can offer are in your price range. If the prices are not right for you, no matter how good they are, they won’t be good enough for you. Lastly, trust your guts: are they telling you you’re in a good realtor’s hands?
Another professional you can benefit a lot from is a real-estate attorney. You’re not obliged to hire one, but it’s highly advisable to do so. Think of all the confusing language you’ll see in contracts. You could benefit a lot from an attorney’s help in deciphering it. And they will be helpful with local laws in general.
Evaluate the house’s condition
The current owner is expected to offer a house in the best possible condition. If that’s not the case, In Minnesota, the sellers will complete a property disclosure form. There, they should state the defects that the house currently has.
Even though the law states this should be done in good faith, it’s still advisable for the buyer to hire an inspector to examine the house’s condition. When you think about it, there might be problems the current owner simply didn’t know about. A licensed professional should check the foundation, the electrical and HVAC system as well as the roof and plumbing. Should the inspector find flaws, you might want to reconsider your offer.
If you do end up buying a house despite the flaws, make sure you immediately plan the budget for the necessary fixing. The best course of action would be to look for local experts, like great plumbing services in Minnesota, or a respectable roofing contractor like Summit Construction Group, depending of course on what part of the house has issues. The experts you find can estimate quickly how much the repair will cost and you can make sure your budget is on track.
Also, after you found the house of your dreams and made an offer, you should have it appraised to make sure it’s worth the money you’re about to spend. If you’re taking a mortgage, the lender will take care of this part.
If it turns out you’ll need to do some fixing, you obviously must count on some additional expenses for this. But that’s not all.
There’s a price you and the seller agreed to buy. On top of that, there are some additional costs. These are called closing costs. According to ClosingCorp, they were about 1.09 percent of the home’s price in Minnesota in 2021. These expenses include:
- Loan origination fees
- Credit report fee
- Real estate transfer tax
- Private mortgage insurance
- Attorney, appraisal, and inspection fees
- Title search and Title Insurance
To buy a house in Minnesota, one should consider their needs and wishes. They should also be realistic about what they can afford and what the mortgage is going to be. Additionally, professional help is more than welcome. After closing a deal, they should not forget to calculate the additional costs.