Steps to Buying a House

Home Buying Guide

Buying a home requires a team of experienced professionals to ensure a smooth transaction. Assembling that team is a critical first step, and it starts with a knowledgeable Real Estate Agent to act as the quarterback. Your Agent will help you assemble the other members of your team, guide you through each step of the process, and act as your main point of contact through to closing.

Here is an outline of what the buying process looks like:

1 Determine your budget/get pre-approved – Before even looking at listings online you should speak with a qualified lender about what you can afford. If you intend to finance your purchase with a mortgage, it is critical to have a pre-approval letter from an accredited lender stating the size of loan you can be approved for. A mortgage originator at a bank or a mortgage broker is going to be the next team member that we will assemble on our path to home ownership.

2 Find your dream home – The house hunt begins by creating a list of what features in a home are most important to you. Whether it be location, square footage, parking, a pool, etc., you will want to create a list of criteria that will realistically fit in your budget. Your agent can then set you up with listing alerts specified to your search criteria, as well as leverage their local connections with other listing agents to identify potential properties before they hit the market.

3 Make an offer – Once you have found the perfect home, your agent will help you draw up an offer so that you get it at the right price. Making the right offer takes into consideration conditions such as local market activity, the property condition, contingencies to close, zoning issues, and many more. Negotiations typically take place after the offer is submitted, and this is the step in the process where having an experienced agent on your side can really pay off. A small, good faith deposit is due with your initial offer.

4 Inspection – Your offer was accepted, great! The next team member you need to recruit is a Home Inspector. While this is not a required step, and in rare situations it may be foregone, it is highly recommended. A good Home Inspector can identify any potential issues with a home that could cause big problems down the road. This information can then be used to potentially re-negotiate your offer, or walk away from the deal if necessary.

5 Sign the Purchase and Sale agreement – If the inspection goes well and the buyer and seller agree to the initial terms, it is time to add our final team members, your real estate attorney and insurance agent. Your attorney will take the reigns in drafting or refining the Purchase and Sale agreement. While your initial offer is technically a legally binding agreement, the P&S holds much more weight and requires another larger deposit to be submitted by the buyer. Your insurance agent will need to provide your lender with an insurance binder proving that you have obtained a home insurance policy before the loan can close. After the P&S is signed the only major hurdle in between you and home ownership is securing financing.

6 Apply for a loan – This step is generally done right around the same time as the P&S signing. Your bank or mortgage broker will start the underwriting process of your loan by asking you for several financial documents to get the process started. This process can take anywhere from 14-45 days depending on the bank and complexity of your financial situation. During this period, the lender will order an appraisal on the property, and fully vet your financial situation. Assuming all goes well they will issue a commitment to close letter, and you will be one step away from getting in your new home.

7 Final walkthrough and closing – On your scheduled closing day or possibly the day before your agent will schedule a final walkthrough of the property. This is your opportunity to make sure the home is in the expected condition before you legally take ownership of the home. Pending no surprises, you will then head to the closing attorney’s office to sign the closing documents, submit the remaining funds, and pick up your keys. Congratulations, you are a new home owner!

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