Wondering what steps are involved in purchasing a home? This guide is for you!
While this certainly isn’t the sexiest step to finding a new home, it is important. Working with your lending institution early is a critical step, as loan officers help you determine how much home you can afford. Armed with this knowledge, you can stop browsing from the street and get into the game!
There are many varieties of lenders in the industry, and they are not all created equal. The place you bank is likely to have services available in this area, as are any credit unions you are a member of. These can be good places to start, especially if you have a good relationship with the people there.
Outside of these arenas, there are folks who specifically focus on mortgages, loans, and finding creative ways to help you achieve your dream of home ownership. If you are having a hard time finding someone you trust, you can always ask for referrals from family, friends, or your friendly neighborhood agent, who we will talk about next!
Hire Your Real Estate Agent
With your pre-approval in hand and lender on your side, it is time to find a broker to represent you in your quest for home ownership. But with so many real estate firms out there, how do you choose?
My recommendation is the same for this as it is with hiring anyone — find someone you can trust to represent your best interests. Ideally, this person is an expert in your specific market (both geographic and style — looking at acreage is very different than city condos), knowledgeable about contracts, and a skilled negotiator. Bonus points if they are well connected in your area!
Your agent works to get you the best possible price and terms for a home meeting as many of your needs as possible. Additionally, they often have access to deep wells of tradesmen, loan officers, title companies, and local organizations should you ever need a referral for a service or simply want to get the lay of the land in a new area.
With your loan officer and agent added to the team, it’s time to get started on finding you a home!
Starting Your Home Search
When you meet with your agent, consider breaking down your home search criteria into two categories: wants and needs.
Needs are anything you can’t have a home without. These are often items like the number of bedrooms, the most you are willing to spend, the size of the yard — anything that will automatically exclude homes from your search.
Wants are a bit more flexible. These are items you would love to see in homes, but you can live without for the right home. Usually folks get a majority of their wants, but it’s rare to find homes that have every single one of them. Items like having granite countertops, preferring a certain driving distance to work, or a backyard with a pool are examples of wants. For the right home you can overlook not getting everything you want, but we should be on the lookout for them. Keep in mind these don’t have to stay constant — you can adjust them as you learn more about what you want in your home as you go!
With these terms in mind, your agent can begin the search in earnest. Most agents will set up an automatic search in addition to manually searching to create a list of potential candidates for you to review. After selecting which ones you like, the agent will communicate with the listing agent and set up a showing for you to tour your first home!
The process continues in this fashion until you find one you like enough to submit an offer.
Submitting an Offer
When you find a home you would like to own, you can submit an offer to purchase the home. The specifics of each contract vary from state to state and company to company, but it essentially boils down to price and terms. Your agent can help draft an offer and talk you through the specifics.
Once the paperwork has been prepared, review it carefully and sign when you are comfortable. Your agent will present your offer to the listing agent, who then presents it to their client (the seller). If there are multiple offers, all offers will be presented as soon as they are received and the sellers will review them until they have an acceptable (or the best) agreement for them.
If they don’t like your offer, the seller has two options: counter or decline. Declining an offer sends the message they aren’t interested in working with you for the price and terms specified in the offer. You can submit another offer or move on, and the home search continues.
If they decided to counter your offer, this is usually good news! It means they are fine with most of the terms and price, and there are just a few items keeping you both from a deal. Counteroffers can go back and forth until both sides come to an agreement or one side decides they are done and declines the offer.
If they like your offer best, they will sign and you are now in a contract to purchase a home — congratulations!
The Last Member of Your Team
Once you have an accepted offer, there is still a lot of work to be done. No doubt you will be busy packing, coordinating schedules for moving, and attending any inspections as necessary. Still, you were smart; you hired a skilled agent and loan officer who are there to make sure this process is smooth as butter. Still, there is one member of the team missing; the title company.
Title companies facilitate the closing itself, as well as review important documentation ensuring, for example, the seller has the legal right to sell the property. Sound confusing? Don’t worry, your title company is there to make sure everything goes smoothly and handle the money for the transaction.
If you don’t know a title company, ask your lender or agent to recommend or find someone on your behalf. Often the best choice for a title company is someone your lender is familiar with, as those two will be in communication often to make sure everything happens on time.
Once you have your title company squared away, it should be smooth sailing to closing! If any issues do arise, you have surrounded yourself with a team of professionals who have the experience and expertise to handle them without tipping the boat.
Now on to the best part – closing!
Getting the Keys
Closing is a pretty straightforward process. It’s a lot of signing documents (and there will be a LOT of documents!) to cover the legal side of everything, from recording the deed in your name and transferring title to confirming all the numbers match up as expected.
Once all the documents have been signed, congratulations — you are now the proud owner of your new home! Don’t forget to thank the team that helped your dream come true by recommending them to others — many real estate brokers and loan officers get their business by word of mouth from happy clients.
I hope this helped clear up some of the mystery surrounding buying a home! Thank you for reading this guide, and happy house hunting ?