Purchasing a house requires a lot of time and effort, but understanding the all the steps can help make your home buying process more manageable and even fun.
Step 1: Start Your Research Early – Get a feel for the style of house and neighborhood setting you want by viewing websites and attending open houses. Chat with real estate agents at open houses and see if they are very responsive to your needs and perhaps someone with whom you might like working. I truly believe there should be good chemistry and trust in the client/agent relationship right from the start.
Step 2: Choose a Lender and Get a Mortgage Pre-approval – Schedule a consultation with a mortgage lender to get "pre-qualified" for a mortgage by providing basic financial information such as your income, assets and debt. If you don't have one already, I have several names of local people I highly trust. When you are seriously ready to start looking at homes, you will need to get a "mortgage pre-approval" by providing actual financial documents (W-2 statements, paycheck stubs, bank account statements, etc.) so your lender can verify your financial status and credit. This step is VERY important before you want to seriously start to look at homes because you can't make the offer without one. (Note: If you are paying in cash, we use a bank statement or letter as "proof of funds" - typically from your financial advisor or institution.)
Step 3: Find the Right Agent - Real estate professionals are critical partners when you’re buying a home. Knowledge of the local markets, home buying process, negotiating skills, and familiarity with the area are extremely valuable. You will also want an agent who communicates often and well and who is tapped into the local market and agent networks. Click my image to learn more about me and my real estate brokerage firm.
Step 4: Shop for Your Dream Home and Make an Offer - Start touring homes with your agent in your price range and with your preferences. Work with your agent to negotiate a fair offer based on current market value of the home and your best terms. Click HERE for more on this critical step. Once you and the seller have reached agreement on a price, the house will go into a "binder" (used in Fairfield County) with your 'earnest money' (typically 1% of your offer price) held in escrow.
Step 5: Get a Home Inspection - Purchase offers are usually contingent on a home inspection to check for signs of any structural damage or things that may need repairing. Your agent will help you arrange the inspection immediately after the binder is executed and negotiate any necessary repairs. The inspection is typically done within 5 days of an accepted offer and contracts are signed afterwards, with any agreed upon repairs/credits.
Step 6: Go to Contract Signing - Once the inspection and subsequent repairs or credit negotiations are completed, the contract will be drawn up by the seller’s attorney. Usually the remaining portion of your deposit (typically, 9% of sales price) is put into escrow at this time.
Step 7: Work with Your Mortgage Lender to Secure Your Loan - Your lender, who has already been made aware of the offer, will be working hard on securing your loan and will arrange for an independent appraiser to come out and provide the estimate of the value of the home you are buying. A good seller's agent will meet the appraiser at the house and hand him/her comps and note any important features to this person.
Step 8: Close the Sale - Prior to closing, the buyer's agent will track the progress of the loan with you to avoid any delays. Often I am talking frequently to the lawyer and lender to ensure everything is moving along smoothly. At closing, you will sign all of the final paperwork. Once the check is delivered to the seller, you are ready to move into your new home!
For more help with Buying with Confidence, click HERE.
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