The Home Buying Process

There are many steps involved in the home buying process.  By understanding what they are, and how to prepare for them, buyers can eliminate any unforeseen steps along the way.

Get prequalified

The first step in the home buying process is to find out how much you can afford. Your lender will look at your income, credit scores, revolving debts and obligations as well as advise you on which type of loan would best suit you. Other factors that impact how much you can afford is the amout of the down payment; (smaller down payments mean higher monthly payments) the interest rate and the terms of the loan (30-year, fixed or adjustable rate).

Make your list of desired properties

Begin to search and compile a list of properties that fit your specific needs.  Decide where you want to live and how many bedrooms and baths you will need. Consider your lifestyle, does it make sense to live in a condominium setting which offers shared amenities, with little responsibility or does a Single-family home which offers more space and privacy, but much more exterior and yard maintenance better fit your needs?

Hire a real estate professional

The importance of choosing the right real estate professional cannot be stressed enough.  Your real estate professional should be an expert in the area where you want to live and familiar with the type of home you want to buy. Your agent should have house-by-house experience in your neighborhood and can offer the best advice on homes in your range.

Select your home

No home is perfect, so don’t let minor flaws influence you. It is very important to think long-term when deciding on your home. Which home best suits the activities and needs of your household now and in the years ahead? Don’t buy more than you need or can comfortably afford.

Make an offer

Your real estate agent will play an essential role in advising you on the price and terms of your offer.  Your offer depends on the current market. If a home has been on the market a long time, you can ask the seller for a price reduction, but if it’s new on the market, the seller is unlikely to accept a low offer. Your real estate agent will be able to formulate and negotiate the appropriate price and terms in order to reach a mutual agreement.

Get an inspection

After agreement has been reached between both parties, a home inspection must be done.  A home inspection is a professional third-party opinion of the home’s condition. The inspector will point out the age of systems, and large and small repairs that are needed, so you will know what you’re facing as the next owner.  The inspection is paid for by the prospective buyer and can range in price depending on which company is used.

Get an appraisal

Depending what type of financing is being a used, an appraisal may need to be done.  The bank appraisal determines market value. If the home does not’t appraise for the purchase price, the bank will refuse to make the loan unless you renegotiate with the seller. If it appraises, the lender will move toward closing.

Final Walk-through

Before attending the closing, complete a final walk-through with your real estate professional.  The purpose of this is to ensure that no damage or changes have occurred inside or outside the home since the inspection. If damage has occurred, notify your attorney immediately.

Go to closing

Once final negotiations are complete, the parties to the transaction meet at a designated  escrow office. This could be a title company, real estate attorney, or whatever is customary in your area. All paperwork is signed by both parties. The buyer then pays the seller minus any closing costs. Once all the disbursements have been made, you get the keys to your new home, in accordance with to your agreement. Congratulations! You are now a home owner!