Step 1: Determine How Much House You Can Afford
The first step in successful buying is to complete the financing pre-approval process. What does this mean? It means that the borrower(s) have completed a loan application and based upon their financial status and credit score(s) the lender has committed to lending up to a certain amount for the purchase of a home. Once this process is complete, assuming there are no significant changes to your financial status, you should have no problems obtaining financing once you find the right home.
Obtaining the financing pre-approval can begin to feel overwhelming at times. If you need some help please don’t hesitate to reach out to me. I can help you locate a helpful mortgage lender and also help you navigate through the process.
Step 2: Finding the Right Home
Now that you have been pre-approved for a loan and know your budget it’s time to begin your home search. We’ll start by defining your search parameters for a home in the areas you desire which are within your budget. As we see the options that are available, we can then narrow or broaden the search as needed. As homes come on the market you will be sent the listings to review online. If there are ones you’d like to see in-person we’ll make arrangements to see them either at open houses, when available, or make arrangements for a private showing.
Step 3: Making an Offer
When we have found the right home, it is time to write an offer. There are a number of special items on the purchase and sale forms – it is not just about price. How much earnest money to put down, when to close, and even how you want to handle an inspection are all decisions that can have both short- and long-term consequences for both the buyer and seller. We’ll discuss each as well as your options to help you make the right choice for you. The seller will receive your offer along with any others they may receive and if yours is in consideration they may accept it as is or provide a counter-offer to consider. Once an offer has been accepted, the offer becomes a binding purchase and sale agreement.
Step 4: Home Inspection
Normally the home inspection comes after the mutually signed agreement has been received although in some cases, it may be done before the offer is submitted. In any case, I always recommend that a house be inspected. Waiving the home inspection altogether is a very risky thing to do and should not be considered by most people. Assuming the inspection is being done after mutual acceptance then the buyer can request that repairs be made or that considerations be granted based upon its findings. Some negotiations may ensue and hopefully an agreement can be made and the sale proceed.
Step 5: Mortgage
As soon a final agreement has been made, the Loan Officer will go to work to set up an appraisal of the property and gather everything required to close on your loan. You’ve already done most of the heavy lifting during the pre-approval process but it’s not uncommon that they need additional information from you at this time. It’s critical that you respond in a timely manner to avoid delays in the process and possibly closing.
Step 6: Escrow
An Escrow Officer will be assigned immediately. This person is a neutral party who does not represent the buyer or the seller in the transaction. Their job is to handle deposits, prepare the final settlement statement, arrange legal transfer of the property and release proceeds to the seller. A couple of days before the closing date you will need to meet with escrow to sign all the paperwork to transfer the property into your name and secure your mortgage against it. Then closing occurs – the day that the transfer becomes official, the deed is recorded with the county and proceeds are available to the seller. You can read more here.
Step 7: Moving Day
After the sale has been recorded with the county, you will receive the keys to your new home.
Buying a home should be a fun and exciting event. Relax and enjoy the process! I look forward to helping you when it is time for you to buy a home.