Steps To Buying a Home
Recently I was asked, "What are the steps to buy a home?" I was going to email this to a client and decided maybe there are others who might find it helpful. Below, I’ve outlined the basics involved.
- Interview and choose a realtor who handles property in an area you wish to live.
- Gather your financial records, account numbers, names and addresses of:
- Checking and savings accounts.
- Investment accounts.
- Credit cards.
- Auto or other loan information.
- Any other financial obligations or assets.
- Ask agent for names of local lenders; interview and choose a lender who will help you:
- Determine how much money you have for the down payment and closing costs.
- Determine the ratio and type of loan amount for which you qualify.
- Determine if there is anything you need to do regarding your credit.
- Get pre-approved by the lender; there is no point in seriously looking at homes until step this is complete.
- Now, decide what price home you wish to purchase.
- If unsure of the area where you want to buy or what you want in the way of a house, preview a broad range of available property:
- Look on the Internet, in the real estate publications and newspapers.
- Go to open houses.
- Your agent can give you an overview of the different areas including what is available in the price range you select and then keep you updated by email.
- Call your agent if you see an ad or sign you are curious about.
- Decide on a desired location(s) where you wish to live.
- Narrow your search to specific properties that fit your requirements in this area.
- It is not necessary to investigate all aspects of the every property prior to finding one that you may consider writing offer on. Once you find a home that will work for you:
- The Listing agent can often provide your agent with copies of home inspection, termite, Reports, Geo, Environmental, Hazard, Earthquake, Mello Roos, Lead, etc, which you and your agent can review.
- At the very least. your agent can provide parcel maps public tax info, MLS, etc on any property you are interested in.
- Read and review all of these reports
- Look for "further inspection" areas; pay attention to health and safety issues.
- After an offer is accepted, get further inspections in any questionable areas. Get estimates for any repairs, corrections or work you wish to have done.
- Strategize with your agent on price, contingencies needed, and how to present these. Write the offer to include contingencies such as:
- Formal Loan approval
- Inspections, if not provided or additional, further or repair estimations.
- A time line now starts: offer is accepted, countered or rejected in the contract time period.
- Once you have an accepted offer “time is of the essence”, and there are time deadlines.
- Home is appraised
- Loan approved (Very likely if you are already pre-approval)
- Any other inspections are completed, reviewed and approved or rejected
- You should be satisfied with the condition of the property,
- Remove all contingencies (Most contracts call for formal written)
- Order Home Owner Insurance (Lender won’t fund the loan without insurance)
- Schedule movers, notify Utility companies of new ownership & transfer date
- If renting, give your 30 day notice
- Schedule time with agent, lender and escrow company to sign closing papers
- Bring balance of funds to escrow
- You will get a "Congratulations" call from your agent and the key
For more information, read my articles How do you Get Started Buying a Home? and What Do Real Estate Agents do for The Buyer?.