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Buying a House in Ohio [2020] | ✅ How to with Tips & Steps for OH

Considering moving to the Buckeye State? Ohio is one of the most affordable states in the U.S. outside of the South, but it has more to offer than a low cost of living. With two of the country’s best theme parks, rivers, waterfalls, lakes, and more, you’ll never run out of ways to spend your time.

If it’s your first time buying a home or you’re wondering about any differences in the real estate process between Ohio and your current home state, this guide will cover everything you need to know about buying a house in Ohio. We’ll cover the process step-by-step and even explore the best first time home buyer programs in Ohio to make it even more affordable.

How to Buy a House in Ohio – Steps

Buying a home in Ohio isn’t as difficult as it may seem, especially if you work with a real estate agent who can walk you through the details. Here’s how to buy a home in Ohio with a step-by-step guide to get you started.

1. Set a Budget: How Much Does it Cost to Buy a House in Ohio?

Before you get started with house hunting in Ohio, it’s a good idea to start with a budget in mind. To determine how much you can afford, look beyond the purchase price of the home to consider:

  • Homeowner’s insurance
  • Property taxes
  • Private mortgage insurance if your down payment is below 20% (with most mortgage programs)
  • Hidden homeownership costs like lawn care and home maintenance. According to a study by Thumbtack and Zillow, the average Cincinnati homeowner faces $8,750 in hidden homeownership costs every year. In Cleveland, these costs are $9,225 on average while Columbus is literally and economically in between at $9,050 per year.

You should make it a goal to spend no more than 28% of your gross or pre-tax income on housing costs.

The next question is how much does it cost to buy a home in Ohio? It depends on whether you’re moving to a metro area or a more rural community. Here are the median home prices in Ohio’s top metropolitan areas:

  • $159,400 median home price in Columbus
  • $147,800 median home price in Cincinnati
  • $71,100 median home price in Cleveland
  • $80,100 median home price in Akron
  • $66,500 median home price in Dayton

There’s a good chance this is lower than the median home price where you are living now!

If Cincinnati and Cleveland are both near the top of your list, check out our guide to Cincinnati vs. Cleveland with more information about the cost of living and benefits of each city.

2. Qualifying for a Mortgage: What Is Needed to Buy a House in Ohio?

Once you know what you can afford to pay for a home, the next step is getting pre-approved for a home loan. You should take this step before house hunting in Ohio to make sure you can qualify for a loan.

Once you choose a lender, you will submit documentation for the pre-approval process, much like the actual mortgage application. When complete, you will get a pre-approval letter with a pre-approved amount that makes a purchase offer more serious.

As a general rule, a lender will require the following documents to pre-approve you for buying a house in Ohio:

  • Income verification. This includes 1099s, W-2s, and documentation for rental income
  • Asset verification. You will need statements for bank, brokerage, and retirement accounts.
  • Debt verification. Be prepared to submit statements showing the monthly payments and debt amounts for credit cards, car loans, student loans, personal loans, and other types of debt.
  • Proof of paid rent. Be able to show proof you have paid rent for the last 12 months on time if you are a renter.
  • Gift letter. This only applies if you are using a gifted down payment with a qualifying mortgage program.

During the pre-approval and later the mortgage process, the lender will check your credit score. While some government-backed loans allow credit scores as low as 580, most lenders require a FICO score of at least 620. You will need a score of at least 760 to qualify for the best rates.

3. Choosing an Attorney & Real Estate Agent in Ohio

Ohio does not require that you work with a real estate lawyer or a real estate agent when you buy a home. However, both can be helpful during the process.

A real estate attorney is only recommended in transactions that encounter legal issues. You may want an attorney’s help if you’re buying a For Sale By Owner (FSBO) or you encounter problems like illegal units with existing tenants or you want a lease to buy arrangement.

A real estate agent in Ohio can be helpful as a buyer to show you available homes, make an offer, and negotiate. A buyer’s agent works as a go-between during the sale and makes it easier to buy a house in Ohio by guiding you through every step of the process.

It’s a good idea to interview a handful of agents to find someone who offers constructive advice, shows they actually listen to what you want and need, and shows a commitment to protecting your interests. As a buyer, there really is no downside to working with a real estate agent because they are paid through the same commission paid to the seller’s agent. Hiring an agent will not increase the cost to buy a home in Ohio.

4. House Hunting: Finding the Best Place to Buy a House in Ohio

With the pre-approval out of the way and an agent chosen, you can move on to the best part about buying a home in Ohio: house hunting. You’ll need to make plenty of important decisions about the best place to buy a home in Ohio, including which metro area is right for you and whether you want to live in the city or the suburbs.

The Ohio Department of Commerce has a comprehensive guide for home buyers that goes into plenty of detail about what you should look for when buying a home, including an overview of property disclosures.

Your real estate agent can be invaluable during this stage of the process. Discuss what you’re looking for in a neighborhood and the features that are most important to you in a home so they can recommend the best suburbs and neighborhoods that will be a good fit.

Planning to buy a home in the Cincinnati area? Make sure you check our guide to the best suburbs of Cincinnati.

5. Making Your Offer & Negotiating

After you find the home that’s calling to you, you’re ready to make a purchase offer. Your real estate agent will help you decide on a good offer price by looking at comparable sales in the area. Your agent can also help you decide which contingencies should be in your offer such as a contingency that the home receives a satisfactory home inspection or that your current home sells first.

The seller will be able to make a counteroffer, accept your offer, or reject your offer. They may negotiate by asking for less seller assistance with closing costs, a higher price, or fewer contingencies. When both parties agree, you will be under contract. At this point, you can expect an escrow process of around 2 months before you are ready to close on your home.

6. Closing on Your New Home

After all contingencies are met, the mortgage is approved, and funds are transferred, you are ready to close on your new home. You will meet at the escrow office to sign the papers and have the title put in your name. You’ll finally get the keys to your new home!

First Time Home Buyer Programs in Ohio

If it’s your first time buying a home in Ohio or elsewhere in the U.S., you can qualify for down payment assistance in the form of grants and affordable loans. In most cases, you can qualify for first time home buyer grants in Ohio as long as you have not owned a home within the last 3 years. Here are the top programs for a first time home buyer in Ohio.

Ohio Mortgage Tax Credit

This program offers a tax credit of up to 40% of the mortgage interest you pay up to $2,000 every year. You can even pair it with 2.5% down payment assistance through the Ohio Housing Finance Agency. You can apply through an OHFA-approved lender or get more information by calling OHFA at 1-888-362-6432.

Ohio Housing Finance Agency, 57 E. Main St, Columbus, OH 43215 (614) 466-7970

YourChoice! Down Payment Assistance

The YourChoice! Down payment assistance program through OHFA can provide 2.5% or 5% of your purchase price toward your down payment or closing costs if you meet income and credit score guidelines. You don’t need to pay back the grant as long as you don’t sell or refinance within 7 years.

Ohio Housing Finance Agency, 57 E. Main St, Columbus, OH 43215 (614) 466-7970

Ohio Grants for Grads

This OHFA program offers an affordable 30-year fixed mortgage with a discounted rate and 2.5% or 5% down payment assistance for recent graduates. To qualify, you must have graduated with a degree from an accredited school within the last 48 months.

Ohio Housing Finance Agency, 57 E. Main St, Columbus, OH 43215 (614) 466-7970

First Time Home Buyer Loans

OHFA also offers first-time home buyer loans with 30-year fixed conventional, VA, USDA, and FHA loans that can be combined with a mortgage tax credit and/or down payment assistance. You must apply through an approved lender.

Ohio Housing Finance Agency, 57 E. Main St, Columbus, OH 43215 (614) 466-7970

Want to explore other options to make buying a home in Ohio more affordable as a first-time buyer? Check our full guide to first time homebuyer programs in Ohio including national loan programs and programs specifically for first time buyers in Cincinnati.

Are you ready to find the home of your dreams and buy a house in Ohio? Once you’ve settled on a neighborhood and you have an accepted offer, contact Bell Moving & Storage for help with the next big step: moving day!