By: Kyle Spearin
Whether you’ve never bought a house or went through the process several times, it can still be a daunting prospect.
There are so many steps from start to finish that it’s hard to remember which part comes when. With so many things getting thrown at you during this process, it’s hard to focus on what really matters: finding your dream home.
To make the process more manageable, this article breaks it down into different steps. That way, you have a general timeline of when things occur and know what to expect at each juncture. This step-by-step guide will prepare you for the home buying process.
Once you’ve decided to transition from renting to owning, you need to start doing preliminary research. Some typical questions people ask as they begin this process include:
Of course, there are dozens of other questions that will come up along the way so this is just a launching point. Start by using websites such as Zillow or Trulia to get a feel for these questions in your desired area. This will help you narrow things
down further as you work with a realtor.
2. Find a Great Realtor
Perhaps the most important person on your real estate team is your realtor.
After doing some research on your own, it’s time to hire an expert realtor. As an industry expert, they’ll be able to help you set up an MLS search that sends you houses that meet your criteria. They will also serve as your main point of contact
and facilitate most of the process for you.
If you’re wary, remember that a “buyer’s agent” represents you throughout the home buying process. The best part? It’s totally free for you (it comes out of the seller’s pocket) which is a huge plus starting out.
Finding a great realtor opens up doors down the line and will also help you stay educated throughout the process.
3. Find an Expert Lender
Being in real estate as a profession, your realtor will have connections to lenders and be able to make recommendations. Although you can do your own research as well (and you should), this gives you a starting point.
An expert lender such as a mortgage broker or loan officer will be in charge of helping you find financing. At the beginning of the home buying process, it’s important to get a pre-approval letter from a lender so that you can begin to put offers on houses. The pre-approval will
give you details such as how much you can afford and as the process continues, your lender will be able to help further break down financing options.
Having an expert lender can save you money and maximize your chance of getting through the home buying process without hiccups.
4. Open Houses and Online Tours
Now that you have your pre-approval letter from an expert lender, it’s time to go house hunting. At this point, you’ll be receiving daily MLS updates with properties that meet your criteria. When you see ones that you like, you can start going on
tours with your realtor or virtually.
Most buyers get the most excitement and joy out of this part. It will help you figure out your wants and needs, likes and dislikes as well as refine current searches. This step will ultimately lead you to find your dream home.
5. Make an Offer
So you’ve found your dream home after going to an open house and want to make an offer. At this point, you tell your realtor how much you want to offer--there are different strategies you can employ depending on your market and the competition.
After much anticipation, you’ve learned that the seller has accepted your offer. Congratulations!
This is a huge step in the right direction, but there’s still more to come before it’s a done deal.
6. Home Inspection
Although you don’t have to have a home inspection,
it’s highly recommended. A home inspector will be able to identify potential problems you might encounter with the house. This is important because oftentimes there are inspection contingencies when buying a home that allow you to back
out of a deal if something in the inspection scares you.
It’s worth the investment knowing that you can sleep easy making the biggest purchase of your life.
Back to the drawing boards! Another benefit of the home inspection is that it serves as a bargaining chip. Using the result of the inspection, you may be able to negotiate a lower purchase price or get other things included in the house.
8. Sign the Purchase and Sales Agreement
After going back and forth, you’ve agreed on the terms of your home purchase with the seller. This is where things get very serious and it’s far more difficult to back out of a deal, so you want to be positive you’re making the right decision
at this point.
With so many legalities involved, some states require a lawyer to look over the documents and provide further consultation. In other states, the realtor has the power and the training to work through these documents with you.
9. Secure Financing
Remember all the paperwork you did when you met with your lender?
Since you put in a lot of the work up front, you’ll probably just need to update some information here. Typically there’s a date that you need to secure financing in your Purchase and Sales agreement. Most of this will be processed by your
lender, but your lawyer (if needed in your state) or realtor will also be involved to ensure that everything goes with the plan to close on a certain date.
Your closing date has finally arrived. You’ll fill out paperwork with all the needed parties, then get the keys to your new home. It’s time to start moving in!
Going through the home buying process blindly can make it seem unmanageable. By breaking it down into steps, you can focus on each component as it comes up.