Home buying process

HOME BUYING PROCESS

Step 1:  GET PRE-APPROVED

Figuring out how much house you can afford is an important first step.  This way you make the best of your time, and your Realtor’s time, when you begin your actual search.   If you need to save for a down payment, this will help you find out how much you need both for a down payment, and for any costs/fees associated with obtaining a mortgage, so that you know how much you need to have available to you to close on your home.

Be aware that there is a difference between a pre-qualification and a pre-approval, although the terms tend to be used interchangeably.  Typically a pre-qualification does not involve the lender pulling your credit; a pre-approval means you are ready to make an offer and the sale will go much quicker.

Step 2:  Find an agent

Finding a home is easier with the help of a Realtor.  They can help you find homes that meet your requirements, because they have access to the entire MLS database so they can search by location, price, size, etc. and send you updates on new listings that meet your qualifications.

Step 3:  Find a home

Make a list of the things you are looking for in a home, including location.  Once you begin your search, your requirements for exactly what you want may change, but with the help of your Realtor, you will find a home that fits what you want and what you can afford.

Step 4:  Make an offer

Make sure that you are consulting with your lender on a regular basis to keep them up to date while you search for a home.  They can tell you, at your pre-approval appointment, if you will need to ask for any closing costs or prepaid items to be paid for by the seller; this will have to be negotiated as part of your offer.  Your Realtor can work with you on the negotiations.  In most cases, an earnest money deposit will be required to be paid by you within 3 days of acceptance of the offer.

Step 5:  Home inspection

It is your decision if you want to have a home inspection.  A home inspection is different than an appraisal, which is used to determine the value of the property you are purchasing.   A home inspector is hired by you to determine if there are any deficiencies in the property that need to be taken care of, which can be part of the sales negotiations.

Step 6:  Buy home owner’s insurance

You must have home owner’s insurance in effect at the time of closing.  You should start shopping for insurance right away, because your insurance information will have to be communicated to your lender as part of your closing.

Step 7:  Closing

Closing involved signing documents for the loan, and also the transfer of ownership of the property you are purchasing.  Everyone who is a borrower on the loan will need to be present for closing (unless there is a Power of Attorney involved).  You will receive a call from the title company and/or you lender a day or two before closing to advise you of exactly how much money you need to bring to closing, in the form of a cashier’s check made out to the title company.