Buying a home is a BIG deal, and if you've never done it before, the process can feel like a lot. But don't worry! I'm going to walk you through each step so you know what to expect, what happens next, and who helps you along the way.
Think of me as your roadmap from house hunting to handing over the keys!
The Entire Home-Buying Process At A Glance
Get Financially Prepared
Get Pre-Approved
Find Your Realtor
Start House Hunting
Make An Offer
Go Under Contract
Inspection and Appraisal
Mortgage and Title Process
Final Walkthrough
Closing Day!
Now Let's Break This Down In Detail...
Step 1: Get Financially Prepared
Before you start looking at houses, let's figure out what you can comfortably afford.
Things to consider:
How much money have you saved?
What is your monthly income?
What debts or monthly payments do you have?
How much do you have available for upfront expenses?
Your Homework: Start looking at your monthly budget, savings, and credit. Remember, what a lender says you can afford and what you personally feel comfortable paying can be different.
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Step 2: Get Pre-Approved
Talk to your preferred mortage lender or bank.
Your lender will review things like:
Income and employment history
Credit history
Existing debts
Available funds
Potential loan programs
You will typically receive a pre-approval letter from the lender that you can give to your realtor. (Subject to the lender's conditions and further review)
Tip: Don't automatically shop at the very top of your pre-approval amount. Make sure your future payment fits your lifestyle, too!
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Step 3: Find Your Realtor
This is where I get to come in!
Your realtor helps guide you through the home-buying process, explains paperwork, coordinates showings, communicates with the other parties, and helps you navigate offers and negotiations.
Things to discuss with your realtor:
Your budget and goals.
Your ideal location.
Must-haves versus nice-to-haves.
Your timeline.
How you prefer to communicate.
You will not have to disclose any personal financial information to your realtor (that's between you and your lender). I don't need to know your credit score or what's in your bank account. You show me your pre-approval and we start hunting!
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Step 4: Let The House Hunting Begin!
Now for the fun part! Let's go look at houses!
We'll search for properties that match your:
Price range.
Desired location.
Number of bedrooms and bathrooms.
Preferred features.
Lifestyle and needs.
When touring homes, pay attention to:
Roof and foundation condition.
Layout and storage.
Age of major systems.
Neighborhood and surroundings.
Potential repairs or improvements.
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Step 5: We Found The One, Let's Make An Offer!
Once you find a home you love, it's time for me to help you put together an offer!
Your offer may include:
Purchase price.
Earnest money amount.
Proposed closing date.
Financing terms.
Inspection provisions.
Other contingencies and requested terms.
The seller can:
Accept your offer.
Reject your offer.
Send back a counteroffer.
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Step 6: YOUR OFFER GOT ACCEPTED!
Congratulations! Once all parties have signed the agreement, you're officially under contract!
Now the transaction moves into the next phase.
Things that may happen:
Earnest money is deposited according to the contract.
Inspection appointments are scheduled.
Your lender begins processing the loan.
Title work begins.
Contract deadlines are tracked.
IMPORTANT REMINDER: Your contract has deadlines, so it is crucial that you stay in contact with your realtor and lender during this time!
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Step 7: Time To Hire An Inspector
Now it's time to have a professional inspect the home!
A home inspection helps identify potential problems with the property. Your inspector may look at:
Roof and attic.
Foundation and structure.
Plumbing.
Electrical systems.
Heating and cooling systems.
Windows and doors.
Visible signs of water damage.
Depending on the property, you may also want additional inspections, such as radon testing or a sewer scope.
What happens if they find something?
Don't panic! You and I can review the findings and discuss your options based on the inspection provisions in your contract. We may be able to negotiate repairs, credits, or other solutions.
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Step 8: The Appraisal Happens
If you're using a mortgage, your lender will generally order an appraisal to estimate the home's value.
The appraiser considers things like:
Size of the home.
Location.
Condition.
Features and upgrades.
Recent comparable home sales.
What if it appraises for less than your offer?
There may be options, depending on your financing, contract, and circumstances. You and your lender will discuss what happens next.
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Step 9: Your Lender Starts Working On Your Mortgage
While inspections and appraisal are happening, your lender is working behind the scenes to get your mortgage ready.
You may hear the word underwriting.
Underwriting is when the lender takes a closer look at your finances, documentation, and the property to determine whether the loan can be approved.
They may ask you for:
Updated pay stubs.
Bank statements.
Employment verification.
Additional financial documents.
Explanations about certain deposits or transactions.
VERY IMPORTANT TIP:
Try not to open new credit cards, finance a car, make large unexplained deposits, or make major financial changes while your mortgage is being processed without first talking to your lender.
Your financial situation can affect your loan approval!
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Step 10: Title Work and Insurance
Now the title company or closing professional is working on the legal side of the transaction.
They generally help with:
Reviewing property ownership records.
Checking for certain liens or title issues.
Preparing closing documents.
Coordinating funds and paperwork.
Arranging the closing.
You'll also need to arrange homeowners insurance and provide proof to your lender as required.
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Step 11: CLEAR TO CLOSE!
THIS IS EXCITING!
When your lender gives you the "Clear to Close," it means they've completed the required review and authorized the loan to move toward closing, subject to any remaining requirements.
You'll receive your Closing Disclosure, which explains your final loan terms and closing costs. For most covered mortgage transactions, you must receive it at least three business days before closing.
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Step 12: Your Final Walk-Through
Before closing, you'll typically get one final opportunity to walk through the house.
Things to check:
Is the home in the expected condition?
Have agreed-upon repairs been completed?
Are the appliances included in the agreement still there?
Is the property cleared of belongings that should have been removed?
Are utilities and systems in the expected condition?
If not, you and I will figure out a solution before you sign.
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Step 13: CLOSING DAY!
YOU MADE IT!
This is the day you've been working toward!
At closing, you'll generally:
Review and sign the final paperwork.
Complete your required financial payments.
Finalize your mortgage documents.
Complete the legal transfer process.
Once the transaction has officially closed and funding and possession requirements have been satisfied, you'll receive your keys according to the agreement.
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What happens after you get the keys?
Transfer utilities into your name.
Change your mailing address.
Save copies of your closing documents.
Keep track of home maintenance.
Learn where your main water shutoff and electrical panel are.
Make sure you understand your homeowners insurance coverage.
Celebrate your new home! (and invite me to your housewarming party!)