The Home Buying Process
Buying a home can be a daunting process. It is your biggest investment, as well as your largest debt. This time can be so much fun, and can also be a bit stressful.
So how do you go about it all? Do you find the house first then look for a mortgage? Do you look on your own or with a real estate agent?
What follows is an explanation of the home buying process, what you need to know and when, so let’s get started.
Remember, buying a home is not an overnight process, but with determination, resilience, and the right resources, you will find the home you’re looking for soon enough.
The Home Buying Process
Table of Contents
1. Determine your Goals
Before you can find your dream home, you need to clearly determine your reasons for buying and the type of home are looking for. Because buying a home and financing are so closely related, you will also need to get a good idea of where you stand financially, so you can be ready for home ownership. Keep it simple and ask yourself the hard questions.
- Where do I want to live?
- What kind of house can I afford?
- Do I have enough money for a down payment on a home?
- Do I have a good credit history?
- What mortgages can I qualify for?
Once you have answered these questions, you will have a better idea of what kind of home you are looking for and what financing options are available to you. Build a plan of attack and a timeline so you can move forward with intention.
2. Build your Team
Now that you have an idea of what type of home you are looking for and what you can afford, you need to start recruiting people to be on your team. The more people you inform of your goals, the more likely it is that you will be able to achieve them. Specifically, you want a real estate agent who:
- knows the market
- has experience in helping home buyers find and purchase
- has great reviews
- has extensive experience
As we mentioned before, once you find the home you want to buy, you’ll need the financing available. A mortgage broker or loan officer can help by:
- informing you what mortgage programs you qualify for
- getting you pre-approved for a loan
- securing you a mortgage to purchase your home.
With a real estate and mortgage professional by your side, you will have all the information and resources you need to find and purchase the home that is right for you.
3. Get Pre-Approved for a Home Loan
Before you can start viewing homes, you are going to want to be pre-approved for a home loan. For your approval, your mortgage broker will review your finances and credit history to see how much money you are able to borrow. Once this is done, your home loan expert will issue you a pre-approval letter detailing how much you are eligible to borrow.
Here at Equity Smart, we have access to numerous loan programs, because of our position as a mortgage broker. We are approved with over 150 different lenders, which allows us to find you the best loan program for your specific situation. For more information about what a mortgage broker is and the benefits of working with one, fill in the form below.
4. Find your Home
Now that you have gotten much of the prep work out of the way, you can start searching for a home! When beginning your search, you may want to start by distinguishing between what you “must have” versus what you would “like to have”. Further categorize your search based on price range, location, style of the home, etc.. The more you refine your search, the quicker you will be able to find a home that you want.
Your real estate agent, your loan expert, and the internet, will be your best friend while you are searching for a home. Websites like Zillow and Redfin are a good start, but your real estate agent will get you set up with search results directly from the Multiple Listings Service. Ultimately, you’ll still need to view homes in person. This is the best way to be sure the house is truly what you are looking for.
Your agent will provide with the expert analysis and the support you need to make sure that you buy the home you want with no surprises.
5. Make an Offer
After you have found the house you want to purchase, it is tie to make an offer. Your real estate agent will use contracts developed by the real estate association in your area to get this done. These contracts can be quite abundant, as they include much detailed info and terms associated with your purchase. Make sure you review these contracts and have your questions answered by your agent. You will want to place a competitive bid on the house that will assure you stand a chance for your offer to be accepted. Once received, the seller can accept your offer, counter it, or reject it.
If the seller accepts your offer, then congratulations! Move on to the next step.
If the seller counters your offer, then the negotiation process will begin. Successive counter-offers requiring timely responses and meeting conditions will be exchanged until you and the seller either come to an agreement or negotiations breakdown.
If the seller rejects your offer outright, then you will have to keep searching or come back with a stronger offer that meets the sellers demands. Don’t be discouraged! If you follow the plan you made with your real estate agent and loan expert, you will find a home to call your own in no time.
6. Finance your Purchase
Upon successful acceptance of an offer, you will begin the mortgage process so you can finalize the purchase of your home. This involves a thorough check of your financial background including credit history, tax returns, verification of employment, etc.. This process can take anywhere between 21 to 45 days, so you will need to work closely with your loan expert to make sure the process is as smooth as possible.
An escrow account with an escrow or title company will be opened to handle the closing of the purchase, once your loan is funded. An escrow company is an impartial third party that the buyer is able to wire money to for the purchase. remember, the deal cannot be completed unless all conditions of the deal are met.
7. The "Closing"
Once all conditions of the deal are met, you will arrange to sit with the seller at what is commonly referred to as “the closing”. Your real estate agent will tell you what you need to bring with you. Closings typically takes one to two hours. While there, make sure you read all the documents you sign and take your time. Once you sign all required documents and the loan has been funded and the seller paid, the home is yours. Time to move in and enjoy life in your new home.
If you liked working with your loan officer and/or real estate agent, be sure to refer them to friends and family. Also, be sure to stay in contact with your loan officer to see if you can refinance your loan in the future under a better interest rate and save some money.
Ready to make your dream home a reality? Contact a Home Loan Specialist today.