The steps below are meant to give you a general idea of the home buying process and in no way are all-inclusive or contain all details for every scenario. When working with us, we will be sure that you are aware of what’s happening, what needs to happen, and what will happen.
- Determine if you’re ready to buy.
Owning a home has several advantages and benefits, but you also have to be prepared for the responsibility. You’ll need to know if you’re ready to live at the same location for a long period of time. For some, this may be 30+ years and for others, it may only be a year or two.
- Find a real estate agent that you want to work with.
Of course this step is optional, but why wouldn’t you seek professional help with such a huge & important financial decision? Real estate agents are licensed by the state they work in and have a fiduciary responsibility to their clients (you). As with any profession, not all agents are created equal. We suggest one that will pay attention to your needs and details of the transaction, that is knowledgeable, and able to solve any problems that arise. Check out the home buying articles on our site for reasons why you should use an agent.
- Find a mortgage lender that you want to work with.
Unless you are paying cash for the property, you must secure financing. This step should be done before you begin looking at homes as the lender will be able to tell how much you can be approved for as well as break down the costs for obtaining the loan and the monthly payments. Additionally, they will be able to provide you with a loan preapproval letter which will be necessary to submit with any offers you make to buy a home. Please check out some of the other articles on our site regarding the lending process and how to find the right lender.
- Look for homes that meet your needs, wants, and preferences.
After discussing with your lender and determining the price range that you’re comfortable with, make a list of all the features that are important to you in a home along with features that would be nice to have. There’s a large number of attributes you can choose from such as square footage, number of rooms, number of stories, etc. Location will also be a huge factor in the home search. We provide you with the ability to search the MLS for homes on our site but you will still want to work with an agent as we may know of other available properties that meet your needs that aren’t listed and we can help guide you through the choices available. Check out the additional info on our site for finding the right home for you.
- As soon as you find the right home, submit an offer.
In real estate, location and timing will have huge impacts. Once you’ve decided that you’d like to purchase a home, submit an offer as soon as possible as someone else may beat you to it. Among other things, you will need to determine what will be a fair price to offer, what the financing terms will be, and if there are any contingencies that need to be factored in to the deal. At this time, you will need to present a check for an option period as well as a check for earnest money. You should anticipate and expect the seller to counter your offer with a different price and/or terms (unless you offer the full asking price with no other stipulations). We really advise using an agent for this. Check out the articles on our site regarding offers.
- Once the purchase contract has been finalized, utilize the option period!
There should always be an option period in your offer – you give a small amount of money up front in exchange for a small amount of time to back out of the contract without consequence. Once the terms of the purchase contract have been finalized and the contract has been executed, the option period begins. At this point, the contract will also be sent to a title company so they can begin performing their services. You must utilized this time to fully inspect the property for problems. There’s no requirement to hire a licensed property inspector but it is highly recommended. It’s a small cost to pay for the peace of mind. If you believe there may be specific problems or if the inspector finds specific problems, you can also use the option period to have another professional give an opinion. An example would be to have a foundation company check for problems if foundation issues are suspected. If the seller won’t agree to the requested repairs, you can cancel the contract without losing your earnest money as long as you are still in the option period.
- Finalize the loan process.
Once the option period has started, you should follow up with your mortgage lender and let them know where you are at in the process and also begin talking to your insurance provider for a homeowner’s policy. When the option period ends, the lender will order an appraisal of the property by a licensed appraiser to determine the value. You will be responsible for paying for the appraisal and it will be part of your closing costs. Also, if there’s no existing/valid survey, one will need to be performed and paid for either by the buyer or seller depending on how it’s worded in the contract. The lender will also discuss other requirements needed for loan approval.
- Get ready to move!
You need to determine if you will need to hire movers or do it yourself. You should also begin packing and arranging to transfer/disconnect utilities. Refer to the moving checklist on our site for more information. Also keep in touch with your lender to make sure the funding process is going smoothly.
- Close the transaction.
Within a few days of your closing date, perform a final walk-through of the home to make sure all repair items have been addressed and that the property is in good condition. Prior to your actual closing, you should receive a articles on home maintenance.