Although this step does not always come first, it is the most important step of buying a home. Internet real estate sites may provide enough information to narrow down your search a bit, but that is only a small piece of the puzzle! It is important to have the right professional by your side to avoid common pitfalls that may delay or stop the process of purchasing your home.
Pretty early on in the process you should determine how much you want to spend on a home and how much cash you can put down. A short phone call with a mortgage loan officer (contacts page) can help you understand what types of financing options are available. There are FHA and conventional programs available to some qualified buyers with as little as 3.5% or even 3% down! Your goal of this call is to obtain a “prequalification” or a “preapproval” letter.
Now the fun begins... Narrow down your criteria and start viewing homes!!! Your REALTOR’s professionalism, approach and responsiveness will be noticed by the listing agent and the seller of the home. Once you are ready to place an offer on a home you should have completed step 2. All sellers will require proof of financing (or proof of funds for cash buyers). You should always request to see the offer your REALTOR is presenting. When financing you should generally allow at least 45 days to close to allow time for the banking process.
Although the mortgage process can seem overwhelming to many buyers it is just a series of simple steps. Once you are officially “under contract” you can begin the mortgage application process. Once approved, your mortgage company will schedule an appraisal to make sure you are not “overpaying” for your home. In cases where your home does not appraise there can be some additional negotiation on price and/or down payment to move the mortgage process forward. Your REALTOR can handle this negotiation with your input. Once you start this process please refrain from seeking any new credit. For example, buying a car or new furniture on credit can severely impact your ability to move forward with your home financing. Generally a mortgage company will run a last minute credit report before closing to make sure you have not made any significant purchases or opened any additional lines of credit.
Once you are under contract to purchase a home, you should immediately schedule a home inspection. The inspection should occur no later than 10 days after you are under contract (contacts page). A thorough home inspection will usually take between two and three hours. Your REALTOR will be present for the entire time. You should also be present. A professional home inspection gives you an independent, unbiased view of any issues and suggested solutions for your new home. Your inspector will generally provide you with a detailed report within 48 hours of the inspection. Most home inspectors will also coordinate a radon test and a termite inspection at the same time! In the event there are items you would like repaired or credited to you, your REALTOR handles this negotiation with your guidance.
Once you are under contract your REALTOR works behind the scenes with the title agency to make sure title is clear, insured and all of the documentation is in place for closing. Closing generally takes 30 to 60 minutes. This is where you get your keys!