Steps For Buying A Home
01
CONSULT WITH A REALTOR
Don’t go through this process alone. A REALTOR can help you navigate the market, walk you through paperwork, and negotiate with sellers. They’ll be by your side through every step of the home buying process, so it’s important to find one you can trust.
Ask for recommendations from friends and family, interview as many as it takes, and always listen to your gut. It may sound silly, but if you’ve got that nagging feeling that a REALTOR isn’t right for you, pay attention.
02
GET PRE-APPROVAL
Often, your REALTOR will have excellent lenders that he or she works with. In terms of financing, there are three characteristics to look for in a mortgage lender or broker:
- Competitive Rates
- Availability
- Excellent Communication
Your lender will help you determine how much house you can afford. With a pre-approval letter, offers you put on homes will carry more weight and give you an advantage over other buyers.
03
VIEW PROPERTIES
With your pre-approval in hand, you can start the search. Make a list of what your family “must” have in a home vs. what they “want” to have. Make sure that your REALTOR understands your needs so you don’t waste time looking at homes that are out of your price range or missing crucial elements.
Any time you walk through a home, compare it to your list and try to imagine yourself living there.
04
MAKE AN OFFER
You’ve found the home of your dreams. Now it’s time to make an offer. Your REALTOR will help you determine what is a fair offer based on the home’s value, location, and time spent on the market. Your offer will include earnest money that will apply towards your down payment and an option period where you could do your due diligence.
05
NEGOTIATE THE OFFER
The Seller may not agree to your offer or the home may have multiple offers. Your Realtor will assist you with negotiating an offer that is in your best interest.
06
ACCEPT OFFER
You like the house, they like the offer… it’s a match! Your REALTOR will notify the sellers that you accept and get the ball rolling.
07
GET FINAL APPROVAL
Now it’s time to go back to your lender and finalize your loan. A closing date was set in the contract and you will need final approval by the agreed date in the Financing Addendum. It’s a good idea to ask your lender how much you will need at closing as you may have to pay the first year’s homeowner’s insurance as well as other pre-pays. Avoid making any large purchases before your loan closes as it may affect your mortgage qualification.
08
SCHEDULE AND ATTEND INSPECTIONS
Once the purchase contract has been executed by Buyers and Sellers, it’s time for you to conduct your due diligence during the option period that is agreed to in the contract. Hiring a home inspector allows you to identify any issues. Once the inspections are completed, you make requests for Sellers to address repairs. Sometimes Sellers will offer to fix the issues before the sale is complete, whereas others will offer closing costs so you can do repairs on your own. Either way, this must be addressed in an amendment that is signed by both parties.
09
APPRAISAL
A Third Party appraisal is ordered by the lender to determine the market value of a home before your purchase it. While this is important for your protection but not required if you are buying a home for cash, it is required if you are obtaining a mortgage. Your lender will want to know how much the house is worth before offering up the money to finance it. The Appraisal value needs to meet the requirements of the loan in order for the lender to approve the loan.
10
FINALIZE FINANCING
Before you can officially call yourself a homeowner, your lender must finalize your mortgage loan and provide financing. Your lender will be requesting a lot of documents from you during this process. It’s important to be timely in submitting everything they ask for or it could delay the loan approval process.
11
FINAL WALKTHROUGH
Prior to closing, you will want to schedule a final walkthrough of the home with your Realtor to make sure that all repairs have been completed and that the home is in the same condition as it was when the contract was executed.
12
ATTEND CLOSING AND SIGN CLOSING DOCUMENTS
At closing, you will sign loan documents prepared by the lender. The signing of the loan documents is usually done at a title company facilitated by Escrow officers. The deed will be transferred from the seller to you. Sign on the dotted line and take your keys. You just bought your first house!
Knowing the process that’s ahead of you will make buying a house much less scary. Surround yourself with the right REALTOR and lender, know what you want in your first home, do your due diligence to make sure that your home is up to par, and then enjoy the life you’ve created
