10 Steps on How to Buy a Home
So you’re considering buying a home, and not sure exactly where to start? You’re in luck! Here is a pretty simple step by step guide on how the buying process should transpire if you’re hoping to have a smooth, enjoyable home buying experience.
- Mortgage Pre Approval– This is not only the first step to buying a home, but also the most important. I repeat, the MOST important. Unless you are planning to purchase a home with cash, you will need a lender involved from the get go. Talk with a lender to get a clear picture of you finances and what price home fits best within your budget. Do not rely on free credit report websites or mortgage calculators to tell you what you can afford. Your real estate agent should be able to suggest trust worthy lenders you can reach out to.
- The Home Search– Once you’re pre-approved, it’s time to start looking for the perfect home! Be sure your agent has a clear understanding of the home you are hoping to find by discussing price range, location, wants, and needs. Always be honest with your agent. They can’t help with your search if they don’t know exactly what you’re looking for.
- Write an Offer– Once you’ve found a home that you can see yourself enjoying, get ready to make an offer with the help of your agent’s expertise. You’ll want to consider price (duh!), moving time frame/possession, and personal property (kitchen appliances, washer & dryer, window treatments, etc). Depending on the activity on the home, you may or may not have the opportunity to negotiate with the seller. In this fast paced sellers market, it’s not rare that buyers are experiencing multiple offer situations and are asked to present their best and final offer up front.
- Accepted Contract– Once price and terms have been agreed upon, you are officially under contract. It’s now safe to do a happy dance! While you are celebrating, your agent should be sending your new contract to your lender so that they can get started on the loan application.
- Earnest Money– Get ready to write a personal check for your earnest money deposit. This money is withdrawn from your personal account and will be held in your agent’s/broker’s escrow account until closing. Your earnest money deposit will go towards the down payment and be deducted from your expenses at closing.
- Home Inspection– It is always a good idea to have your home thoroughly inspected by a general home inspector. They will take a deeper look at the homes current interior, exterior, electrical, plumbing, and appliances, and bring your attention to any items you need to be concerned about.
- Repair Request– If you are concerned about the homes current condition, you may consider asking the seller to make some repairs before closing. Your agent should outline your options, and help you strategize on how to move forward during this time period.
- Home Owners Insurance– Once you are past inspections, start looking for an insurance provider for your new home. Ask your agent and/or lender if you need some suggestions. Once you’ve chosen your insurance provider, you will need to supply your lender with contact info.
- Appraisal– Your lender will take care of getting an appraiser out to the home. The appraiser will create a detailed report that outlines the homes fair market based on recent comparable homes sales. Hang in there; you’re almost a homeowner.
- Closing– Once you’ve made it to the closing table, and signed a stockpile of documents, you can officially call yourself a homeowner. CONGRATS! Pop that bubbly, and enjoy your new home!