Taking the Mystery Out of Buying a Home

Buying a home does not need to be confusing. With the right Realtor®, it can be one of the smoothest transactions of your life. But you need a professional to guide you because, like most things, the road has a lot of twists, and turns and you need someone who knows the way. As long as you get that person, you will arrive at the destination of home ownership safe and sound.
Of course there is a lot to do that this simple list, but these are necessary steps to take… the Realtor®, loan officer, appraiser, inspector, and other professionals will do most of the work, but below is a break down of what takes place during the home-buying experience.

15 Steps to Buying a Home

1. See a lender or call a Realtor to refer you to a lender for pre-approval. This is a necessary step, (for everyone, regardless of income level) not an optional step before you even begin looking. There are many loan programs available and a loan originator might open your eyes to possibilities you never even knew existed. For instance, it is no longer necessary to put 20% down on a home like in days past. In fact, you can buy a home with no money down. The loan originator will explain all about closing costs and other fees involved in buying a home, in addition to the purchase price. Keep in mind that often times, these costs can be deferred. If you have good credit and just a little money, you can probably buy a home. Note: DO NOT use an Internet or out-of-town lender no matter how attractive the deal might sound!

2. Save money if you need to. Even if you buy a home with $0 down, you will need some cash for an earnest money deposit which will be put down when an offer is made. You will also need up front cash for inspections (approximately $400), an appraisal (approximately $350) and some money for insurance (approximately $500). It may be possible to defer some of these costs, but do not try to buy a home with an empty bank account. Your Realtor and lender will help you know what to do.

3. Determine what you want, vs. what you must have. Concentrate on things that would be difficult to add, rather than features you could add or adapt. Location is important. Where do you want to live? However, do not count out areas you don’t know. Keep an open mind.

4. Get representation. Start with a Realtor right from the beginning. You want representation and since it costs you nothing, why wouldn’t you want professional representation? Find a Realtor like me, who takes the time to educate you.

5. Start shopping and become educated to what is available in your price range and fine-tune likes and dislikes. This will be done by beginning to look at listings and some homes.

6. Shop and select a home. Allow your Realtor to help you think about condition, but don’t get so hung up on small things that you will never find a home. Be realistic. Trust your Realtor to guide you. A good Realtor will help you see beyond the paint color and curb appeal.

7. Make an offer that will buy the house… ask yourself: do you want to make an offer on a house or buy a house? We’re here to buy at a FAIR price, not spin wheels and risk losing the home. There is a lot more than price at stake too. Your Realtor will help you decide things like, possession issues, rent back possibilities, how taxes will be handled, how much money to put down as earnest money, what property should come with the house, and other provisions that may cost or save you money.

8. Have inspections done. A good inspector is as much a part of the process as your loan officer and Realtor. You need someone you can trust to tell you the condition of your new home. Remember that inspections are for the purpose of education, not re-negotiating. Your Realtor will provide several names for you to choose from and help you make these arrangements. A good Realtor (like me) will also attend inspections with you.

9. Negotiate important repairs if necessary. It is important to be realistic when asking for repairs. Small items should not be considered as deal breakers. It is reasonable that a buyer accept that home-ownership comes with an immediate “to do” list.

10. Finalize the loan process. The loan officer who pre-qualified you will finalize the process. An appraisal will be done and the loan will be formally approved and we will get the all-clear to close on the transaction. This includes getting insurance for the home. Your lender will guide you.

11. Set a closing date. The two Realtors, buyers and sellers and the lender compare their schedules and set a closing date and time. Typically closings get scheduled around 30 – 45 days after the initial offer was made.

12. Review the closing statement with your Realtor and lender. The closing documents can be complicated to the average person not familiar with real estate transactions and the numbers involved. Your Realtor and lender will explain these documents and make sure they are accurate.

13. Close on your home. Finally the day arrives. You meet with all the other parties involved and sign the documents. You are now a homeowner!

14. Make arrangements to change addresses, utilities and other services if you have not already done so.

15. Move into your new home on the agreed upon date. Sometimes possession is at closing, sometimes it is at an agreed upon term afterward (Typically not more than a month).