The homebuying process can be tedious, and at times frightening; but it doesn't have to be. See below for our 10-steps to homebuying, and learn how with a little bit of preparation and the right agent, the homebuying process can go from tedious and frightening to easy and enjoyable.

1. Work with a Real Estate Professional

Purchasing real estate is a complex and major transaction that involves many details. An experienced real estate agent can guide you through the process and help you avoid costly mistakes. A Buyer’s Agent is one who represents your needs in the transaction. Similarly, the seller will have a Seller’s Agent representing them. Real Estate Commissions are all generally paid by the Seller.

2. Obtain Financial Pre-Approval

One of the biggest mistakes a home buyer can make is not getting pre-qualified or pre-approved for a loan. A pre-qualified loan means a lender takes information from you and has run an infile credit report. Based on your information and the credit report, they can issue you a pre-qualification letter. A pre-approved loan is one in which you and the lender have gone through all of the documentation, and a full credit report is ordered. You benefit by having your loan pre-approved in several ways: You eliminate any surprises about your ability to borrow by providing the lender with the information up front. If there are questions about income, credit, or down payment, you can address them and resolve them without the last minute panic that can occur if you have not been pre-approved. Many times, credit reports are showing wrong information.

3. Select and View Properties

Once you have obtained pre-approval and have determined your affordable price range, you can begin to select and view available homes and new construction models. Having a set of guidelines based on requirement is essential to making decisions based on facts and not just emotions.

4. Offer to Purchase

When you have identified a home that meets your needs, it is time to make an offer and negotiate. Your rights and obligations will be detailed in the Contract to Purchase Agreement.
In addition to the offer, you will need to put up an earnest money deposit as a sign of Good Faith that you are seriously interested in buying the home. That deposit becomes a part of the purchase price and will be held in a trust account and credited back to you at closing toward your closing costs or down payment. The amount of earnest money varies. However, it is normally 1 % of the sales price of the home.

Your offer will then be presented to the seller with your pre-approval letter attached to ensure the seller you are a qualified buyer. The seller will either accept, reject, or counter the Contract to Purchase. Once a contract or counterproposal has been agreed upon, you will proceed with the property inspection and secure your mortgage as well. If your offer was rejected, or you were unable to come to a final agreement, your earnest money check will be returned to you.

5. Inspect the Property

The Contract to Purchase will have a written provision that your contract is to be contingent upon a satisfactory home inspection report. The seller is required to provide you with a Property Disclosure, which states what is included, what is not included, what is working, and what is not working in the home.
The Contract to Purchase will include an objection date by which this must be done. Any items that you may request the seller to repair or replace must be submitted in writing. The seller has a resolution deadline to respond to your request. At that time, if you and the seller do not agree on the inspection objections, you have the right to terminate the Contract to Purchase.

6. Title Insurance and Approval

It is the seller’s responsibility to provide you with Title Insurance. The title search is done by a Title Company, and a title commitment will be provided to you before the title deadline in the Contract to Purchase. If there are any judgments, liens, or recorded easements, they will show up on the title commitment. It is the seller’s responsibility to take care of any problems with the title company and assure you clear title.

  • Your lender will assign an appraiser to go out and appraise the property. The cost of the appraisal will either be paid by you up front when you apply for your pre-approval, or at closing.

7. Secure the Mortgage

If you are pre-approved, the only tasks left for the lender to do are:

  • Get the appraisal
  • Get a survey of the property, if needed
  • Ask you to provide them with your current pay stubs and bank statement
  • It is very important that you not go out and make any large purchases that might affect your credit score or rating. It is best to discuss anything questionable with your lender first so that it will not affect your mortgage.

8. Obtain Home Owners Insurance

Before your bank allows you to close on your home, they will want to verify that you have Home Owners Insurance on your home. This insurance policy protects you against any damage to home during the course of ownership.

9. Closing

The Closing is the process by which the title to your new home will be transferred to you, homeowners’ insurance will be verified, the terms of the mortgage will be finalized, and the keys to the new house will be given to you.

10. Taking Possession and Moving In

This is the day everyone has been waiting for! It will be a busy day so be rested up! The weeks leading up to your moving day will be busy with many diverse tasks. It is a good idea to refer to a timetable to help keep you organized and to ensure that important activities are not inadvertently neglected. Congratulations on the purchase of your new home!