Home Buying Steps

Many buyers I work with have questions about the process. To help them stay one step ahead, I’ve created a simple guideline.

Let’s get to it!

  • Pre-Approval
  • Search
  • Visit
  • Offer
  • Attorney
  • Earnest Money
  • Inspection
  • Mortgage
  • Close

Pre-Approval

You must have a pre-approval accompany your offer to purchase. So, if you want to buy a home, this is the first step. This can be done prior to talking to an agent, but, usually agents have reliable and trustworthy relationships with lenders. That relationship can make the buying process go much smoother. Many agents will ask for a pre-approval before looking at homes. This is normal-don’t be offended. This serves as our reassurance that our time is valued, and also offers a sense of safety regarding your identity (Learn more about pre-approvals here). If you are planning to pay cash for a home, you’ll need to show proof of the funds in lieu of a mortgage pre-approval.

Search

This really can get tricky depending on how many properties fall into your criteria. The MLS’ search system (which is what most agents use) limits the original search to 100 properties. This seems like a lot, but you’d be surprised how easy it is to get above that number, especially as the price range increases. I may suggest we set up a search, through my website (here), in order to avoid the 100 property limit. We want to keep things somewhat broad, but definitely rule out the “deal breakers” and be sure to include the “must haves.” If you must have a basement, then we can search for homes with basements and you will NOT see any homes that do NOT have a basement. Same with a 2 car garage… you won’t see ANY 1 car garage homes, etc. So we need to be sure what the absolute yes’s and no’s are when we search so that you have an accurate group of properties to choose from.

***Sidenote. We can set up several folders/searches for different towns, price ranges, or criteria if you want to separate. i.e. Folder 1–Land Lots Only <200k, and Folder 2– 4 bed 2.5 bath w/bsmnt <600k.

Visit

While searching, you’ll be able to mark properties “interested”, “maybe” or “not interested”. Along with, comments for your spouse/family and reminders of what you liked/didn’t like about the property. I’ll be able to view how you’ve categorized these properties, afterwards we’ll schedule a group of homes to see in person. Scheduling with a 24 hrs notice is customary, but we can always try to schedule same day appointments if we’re both free. I’ll schedule the homes you want to see, in an order that makes sense, and we’ll go check ’em out!

Offer

Once we find a home you like, we’ll put an offer in. We can meet and get this done in person or electronically via email. Once the contract is signed on our end I’ll send it, along with the pre-approval/proof of funds, to the seller’s agent. We may go back and forth a few times regarding the terms of the offer, after agreement we’ll change any terms on the contract accordingly and you’ll initial the changes.  (You don’t need amend the contract and initial for every counter offer). Once the sellers sign the amended contract and return it to me, we are officially Under Contract, and the property is marked “Contingent” or CTG.

Attorney

Once we’re Under Contract, your attorney enters the picture. Just as with the lender, it’s not necessary to use the attorney that your agent is familiar with, but it definitely helps the process go smoother if they’ve worked together in the past. I will send a copy of the contract to both your attorney and your lender, and they will immediately get to work with your file. The first 5 days of the contract is called the Attorney Review period; your attorney can review the contract and make changes you and/or they deem necessary.

Earnest Money

The earnest money is part of your down payment up front at the beginning of the process. I usually write “within 2 business days of acceptance” to give us a little bit of time to make arrangements for money and delivery. Either, one of the brokerages or one of the attorneys will hold the earnest money. This shows the seller how serious you are about buying the home. The amount is agreed upon before going under contract, and can be any amount up to the full down payment/purchase price of the home. But, typically the number falls in the 1-3% range (of the purchase price).

Inspection

You have 10 days to complete an inspection, but to err on the safe side we will get one done within 5 days during the attorney review period. After communicating with the attorney, he/she will ask the seller for a credit and/or to repair certain items. This is another step of negotiation, and both parties need to agree. Once agreed what will be fixed/credited, the attorney review/inspection period is over.

Mortgage

This is the only thing left that needs to be finalized. Usually at this point we’re waiting for an appraisal on the home to make sure that it’s worth what we’re paying. Your lender will have requested several financial documents from you prior to this point, and may still be asking for more. Your lender’s job is very important since there are deadlines in the contract that they will have to meet. And they need to structure the loan properly based on the contract and what was agreed upon through the attorney review/inspection period. They will send everything to underwriting, and eventually get the “clear to close”…

Close

The attorneys will set a time and a place to close. You and I will do a final walkthrough of the property to make sure the condition is the same as it was when we decided to buy it, in addition to any agreed upon repairs. We can do this walkthrough the day of or the day before depending on your schedule… then we go to closing, sign a lot of papers, and get your keys to your new HOME!

This is a very general description of the process so you have a basic idea of what to expect. Not to worry, you’ll have me, your lender, and your attorney keeping track of the process as well. We’ll make sure things are getting done correctly and on time, and we will keep you informed along the way.

Thanks for reading! Questions and comments please!

Joe

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