Learn About The Home Buying Process


          Buying a home can be a very intimidating process, especially if you’ve never done it before.

    Step 1: Figure out How Much You Can Afford

    • To find the right mortgage lender make sure to find someone that you are comfortable with and who makes you feel at ease. Once you have the right lender, make sure you at least get a pre-approval. A pre-approval will give you a better idea of how big a loan you qualify for. The lender will actually pull your credit and get more information about you. However, you could even take it one step further by getting an actual approval before you start home shopping. That way, when you’re ready to make an offer, it will make the sale go much quicker. Besides, your offer will look more appealing than other buyers since your financing is guaranteed.

    Step 2: Find the Real Estate Agent

    • The agent that you choose is important, especially on the buyer side. While the buyer does not pay the agent for their services (the seller does!) that does not mean that a buyer cannot pay for the agent that they choose. Find an agent that will act in your best interests, and takes their fiduciary responsibility seriously. Many agents treat their job as a sales profession, and churn and burn client after client; find an agent who is a professional and serves their clients.

    Step 3: Look for the Right Home

    • Make a list of the things you’ll need to have in the house. Ask yourself how many bedrooms and bathrooms you’ll need and get an idea of how much space you desire. Do you want a single family, townhome, or condo? Do you need a big yard for your kids and/or pets to play in?

    Step 4: Make an Offer on the Home

    • Now that you’ve found the home you want, you have to make an offer. Before you decide on a price, have your agent run a market analysis for you to determine whether the home is well priced. A good agent will provide you with advice, and not let you overpay for something! Once the offer is accepted, we enter the contract phase.

    Step 5: “Ratified” Contract to Settlement

    • Once the home is under contract the real work begins. In summary:
      • Escrow Deposit = every buyer is responsible for an earnest money deposit. This is good faith money which the buyer loses if they default on the contract. A good agent does not let this happen.
      • Home Inspection = many sales contract are contingent on a home inspection. Meaning that the buyer (beware) has a period of time (normally 7-10 days after contract ratification) to conduct a home inspection with a licensed home inspector. If the buyer does like what they find in a home inspection, they may negotiate repairs or more money towards closing with the seller; or they may void the contract if said negotiation or inspection is unacceptable.
      • Condo/HOA Documents = the buyer has the right to review the by-laws and rules of whatever condo or home owners association they are entering. It is required for seller to provide these documents prior to settlement.
      • Financing Contingency = the majority of homes are purchased with mortgage loans. In the event that something happens to the buyers loan, they have until the end of the contingency period (14-28 days) to void the contract.
      • Appraisal Contingency = when a home is funded by a bank, that bank requires an appraisal to be done. If the appraisal comes back below the offer price – the seller comes down, the buyer pays the difference, or the deal is off.
      • Settlement = Every home that is settled is so through a licensed settlement agent. Title company is another name commonly used. These companies handle all of the monies of all parties (buyer, seller, banks, etc.) and record the deed of the home with the state.

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