How to Buy a Home: 10 Steps to Achieving Homeownership
Not sure how the home buying process works? Or maybe it’s been a few years since you’ve last purchased a home and you need a refresher? Here’s a birds-eye view on how the home buying process works below.
Now let’s dive further into each step…
Step 1. Choose A Lender: It’s crucial to find the right lender as they will be your resource throughout the mortgage process. A loan officer will help guide you with loan options, rates, down payment requirements, loan terms, and closing costs details. This piece of the puzzle is extremely important when it comes to purchasing a home. We have some great recommendations to connect you with if you need!
Step 2. Get Pre-Approved: After chatting with your preferred lender, you will undergo a brief pre-approval process to get a formal letter of what you are pre-approved for. This step is necessary so your agent can understand how to better prepare you for writing offers. Most importantly, this letter will be needed anytime you write an offer on a property as listing agents and sellers need assurances of your ability to actually afford and perform on the contract to purchase the home.
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If you decide you prefer to NOT finance the purchase you can certainly purchase in CASH. When purchasing property with cash, a proof of funds will be needed when submitting a cash offer.
Step 3. Find The Right Realtor: Did you know that only 10% of agents in the Twin Cities do 90% of the real estate transactions? There are thousands of Realtors who hold a real estate license, but be mindful when choosing the right Realtor. You will likely be spending a good amount of time with your Realtor when it comes to buying a home. We believe partnering with a Realtor involves, trust, competency and likability and we strive to exceed in all three areas. We want to make the process of buying home not just a smart one but a fun one as well.
Step 4. Determine Home Search Criteria: This is where we dive deep into understanding your style, criteria, location, budget, etc. We like to spend a good amount of time on this discussion so we can fully understand what you need, want, and love when finding a home for you! Plus, we like to play matchmaker, when possible, with our relationship network. Hopefully, this will lead to potential off-market opportunities as we’ve closed a handful of off-market deals already in 2021! Curious about what off-market means? It means that we may know of homes that are available before the public knows about them. And, in a CRAZY seller’s market, it can be extremely important.
Let’s
Start
Searching
Together!
Step 5. Start Searching And Viewing Homes: Let the fun begin! After gathering all of your search criteria information we will set you up on our portal so you are notified of new listings as soon as they hit the market. We also will take your search criteria an extra step further by connecting with our network regarding any off-market opportunities or “coming soon” listings. This is also the phase that we will be communicating with you often regarding scheduling showings, and providing further details on the property that you may be interested in viewing.
Step 6. Write A Offer: Once you’ve found “the one” we will help you navigate all the details involved in writing an offer on a property.
Step 7. Schedule Inspection: If you make an offer on a property that is contingent on an inspection and it’s accepted, you will then want to schedule your home inspection with a third-party inspector. Pricing will vary depending on the size of the home and any additional ‘add-ons’ you may add such as moisture testing, radon, sewer, & chimney inspections.
Step 8. Earnest Money: Once an offer is accepted, it is standard for the buyers to submit earnest money (1%-2% of list price is typical) within three business days to the seller’s listing agent’s brokerage account. Earnest money is not in addition to the purchase price, it is simply included as part of your down payment and shows your earnestness or seriousness in purchasing the property.
Step 9. Appraisal Order: Once you are past the inspection period or in the ‘pending stage’ of a purchase agreement contract, your lender will order an appraisal on the property. The purpose of an appraisal is to determine what the home is worth so the lender can ensure that the amount of money requested by the buyer/borrower is appropriate.
Step 10: Final Walk-through & Closing Day: Woohoo! The big day! We will do a final walk-through of the property on the day of closing or the day before. Closing day will include reviewing and signing closing documents as well as being the day that you will (finally) take possession of the property. It’s also the day that we get to celebrate and officially welcome you home! Cue the bubbly!
Buying a home is not always black and white and there are many moving parts, deadlines, and tactics to consider. Therefore, we highly recommend utilizing Realtors that can help guide you every step of the way.
Happy house hunting!
