Steps to Buying

The process to buying a home can be stressful and confusing, so let’s make sure you are prepared for all the necessary steps!

1. Interview realtors – There are plenty of exceptional agents out there and each one runs their business differently. You will want to pick someone you are comfortable with and that your respect. All decisions on the home are yours, but you want an expert by your side that knows the market, contracts, laws, things to watch out for, and negotiating.
2. Schedule consultation to discuss your goals and needs – This will be a great opportunity to ask questions early on and for your agent to learn all about what you want and need. Communication throughout the transaction is key! This is completely free and is a great step in understanding the process.
3. Get pre-approved – Knowing how much you can afford early on is crucial. You don’t want to start looking at houses, fall in love with one, then find out you can’t buy it! You want to use a local, reputable lender that knows the area and market. There are also plenty of down payment assistance programs, rate buydown programs, and other incentives that might work better for your situation. Make sure you communicate with them what your financial goals and limitations are. Any questions about the financial side of purchasing should be directed to the lender!
4. Start looking at houses – There are plenty of websites and apps for you to explore what is on the market. When you find one you like, have your agent schedule a private showing to get you through the door. Pictures can sometimes be deceiving, so seeing the inside is crucial. Open houses are a great way to take a look into homes as well! You won’t need to schedule a time, just show up and walk in.
5. Submit offer(s) – Once you find a home you like enough to buy, it’s time to write up an offer! The paperwork involved will outline all terms and timelines that will be honored by all parties to the contract. The most important terms to consider are (1) purchase price, (2) earnest money amount, (3) inspection period length, (4) closing date, (5) items included, (5) and loan type.
6. Mutual acceptance – Now that your offer is accepted, all timelines described in the offer have started. It is time to schedule your home inspection and any other testing (sewer scope, well draw down and water sample, radon testing, etc.), apply for homeowner’s insurance, earnest money deposit, and doing your due diligence. Now is the time to make sure this house is truly worthy of buying! Most inspection costs will come out of your own pocket, unless otherwise agreed to in the contract.
7. Earnest money – Earnest money is known as a “good faith deposit”. It is used as collateral in case you breach your contract. In other words, if you fail to follow through with the terms of your contract, you will forfeit the money. The accepted offer will outline all scenarios when terminating the deal is acceptable and earnest money will be refunded to you.
8. Inspection period – This is your chance to hire a home inspection or other contractor to conduct a thorough examination of the property and write a report on the condition of all relevant items. You can also pay for a sewer scope to check the condition of the sewer line, a well draw down test to check the gpm of any particular well in the ground, a survey to verify boundary lines, and any other test you deem necessary to determine whether or not the property is worth buying.
9. Inspection response – Once you get your reports back from all the hired contractors, you will enter another stage of negotiating. If you would like the seller to pay for the replacement of a sewer line, install new outlets, update the flooring in a specific room, or take some money off the purchase price in lieu or repairs, this is a chance. The seller will (1) respond by choosing to agree and make all necessary changes, (2) agree to some of the repairs, (3) agree to none and suggest other remedies, (4) or not agree to any remedies.
10. Appraisal – A certified appraiser will schedule a time to come to the subject property and conduct an assessment of its value. Depending on your loan type, they might require certain repairs/alterations to the property before giving the lender the okay to purchase. The lender will likely order the appraisal after inspection period and will either be charged to the buyer at the time of ordering, be added to closing costs, or any other payment arrangement your lender offers. If your appraisal comes in above value, congratulations! You have just acquired instant equity. If the appraisal comes in right at value, then both sides will likely be happy and this step is done. If the appraisal comes in low, another step of negotiation comes into play: The seller can (1) agree to drop the price to the amount of the appraisal, (2) drop the price to less than the purchase price, but above the appraisal amount, then ask you to pay the difference, (3) do nothing, which would require you to pay the entire difference if you want to continue with your purchase, or (4) or ask for a reconsideration of value.
11. Final paperwork signing – Your closing officer will call you a couple days before closing to schedule your final signing. You can do this in one of their offices or pay for a mobile notary if you are out of town. This is your chance to go over all the paperwork, final terms, and make sure you understand every number involved in your purchase.
12. Move in day – The house is now yours! Even though the transaction has closed, you should never hesitate to reach out to your loan officer or realtor if you have questions or need anything.