Step 1: Get Loan Pre-Approval (If You’re Not Buying With Cash)
Before looking at homes, it’s important to determine your budget - what you qualify for and, more importantly, what is comfortable for you financially. A good lender will help you determine both. If you're not pre-approved, start here:
Step 2: Identify Homes & Go View Them
I send you homes the moment they hit the market and you let me know which ones you want to go see. In a seller’s market, we’ll want to see them quickly - time is of the essence.
Step 3: Write The Offer
Once you have found the property you want, we’ll write the seller an offer. While much of the offer is standard, there are a few areas that we can negotiate:
- The Price What you offer on a property depends on a number of factors, including its condition, length of time on the market, buyer activity, and the urgency of the seller.
- The Move-in Date If you can be flexible on the possession date, the seller will be more apt to choose your offer over others.
- Additional Property Often, the seller plans on leaving major appliances in the home; however, which items stay or go is often a matter of negotiation.
Step 4: Present The Offer
Typically, you will not be present at the offer presentation - we will present it to the listing broker and/or seller over the phone and/or email. The seller will then do one of the following:
- Accept the offer
- Reject the offer
- Counter the offer with changes
- Not respond at all
When a counteroffer is presented, you and I will work together to review each specific area of it, making sure that we move forward with your goals in mind and that we negotiate the best possible price and terms on your behalf.
Step 5: Start The Home Inspection Period
This is the most important part of the buying the home. Home inspections are an out-of-pocket buyer expense and the inspections that are needed will vary per house due to the age of the home and the available historical documentation.
You will want to get your inspections ordered and completed as soon as possible after receiving an accepted offer. These are some of them more common inspections: Whole House Visual Inspection, Sewer Scope, Radon Testing, Oil Tank Locating, Oil Tank Soil Testing, Lead Based Paint Testing, Roof, and Structural Inspection.
Step 6: Title
In order to change ownership of the property, its title has to be transferred. Before transferring the title, the title company that is hired will search for clouds and encumbrances to ensure that you know exactly what you are purchasing. At this point title insurance will also be purchased to protect against loss coming from unforeseen defects on the title.
Step 7: Complete Mortgage Requirements
Before officially securing the loan, the lender will require a few last steps and double checks.
- Appraisals - An appraisal is ordered by your lender and paid for by the buyer.
- Income Verification - Though often covered in your pre-approval, the bank will ensure that nothing has changed with your employment or income.
- Credit Report - Credit will be checked again at this point to make sure that your credit score hasn’t changed which usually implies accounts opened and closed as well as on time payments and a myriad of other things. Again, for more on this, please see the included Ten Commandments section.
Step 8: Underwriting
This is an important part of the loan approval process and the person who does the underwriting for your lender can reject, approve, or give conditions that must be addressed before they will approve the loan.
Step 9: Signing Day
Signing day marks almost-the-end of your home-buying process and the beginning of your new life! To make sure your signing goes smoothly, you should bring the following:
- A certified check or wired funds ahead of time for closing costs and down payment.
- An insurance binder and paid receipt
- Two pieces of Photo ID per buyer
Step 10: Recording - You Own It!
Transfer of title moves ownership of the property from the seller to you. The two events that make this happen are:
- Delivery of the buyers funds - This is the check or wire funds provided by your lender in the amount of the loan.
- Delivery of the deed - A deed is the document that transfers ownership of real estate. The deed names the seller and buyer, gives a legal description of the property, and contains the notarized signatures of the seller and witnesses.
At the end of closing, the deed will be taken and recorded at the county clerk’s office. This is also the day that you get your keys!
- Transaction Timelines
- Getting Pre-Approved
- The 10 Commandments of Home Loans
- Lenders We Know and Trust