1: Get Pre-Approved
- Ask me for a referral to our trusted mortgage brokers, but also compare rates offered by your own bank and / or credit union.
- Ask the lender to give you a loan preapproval letter, which means it will verify your income and pull a credit report.
With your lender, determine your maximum loan amount, but choose only a mortgage type that you understand and a payment level with which you feel comfortable, which may very well be less than the maximum for which you are approved. Read more about Pre-Approvals on my blog.
2: Start Shopping
We will sit down and discuss your wants and needs for a new home.
I will set you up on a HomeMatch search that will automatically send you homes that match your parameters.
We won't visit every home that matches your search results. Some we will just view online and others you will drive-by to see if you like the location and neighborhood. Be prepared to only view homes that we all feel like could be a potential purchase for you. Part of my job is to help you narrow down the homes we view so that your search is narrowed, meaningful and fun!
3: Write an Offer
We will write an offer based on market conditions and desirability. Each offer is unique, so we will discuss in detail what that will look like for you.
Select a home offer price based on the amount you feel a seller will accept or counter, but most importantly, what you feel comfortable with.
Before submitting your offer, take another look at your budget. This time factor in estimated closing costs (which can total anywhere from 2% to 5% of the purchase price), commuting costs and any immediate repairs and mandatory appliances you may need before you can move in.
Prepare for multiple offers if the home is considered desirable in a hot location. I will help you get an offer prepared that is competitive and creative to put you at top of mind with the sellers.
The seller may reject or counter your offer. Be prepared to negotiate further or move on to the next home.
4: Earnest Deposit / Open Escrow
- If you reach an agreement, you'll make a good-faith deposit (called an Earnest Deposit). This is typically around 1% of the purchase price of the home. The process then transitions into escrow. Escrow is a short period of time (often about 30-60 days) where the seller takes the house off the market with the contractual expectation that you will buy the house — provided you don't find any serious problems with it when you inspect it.
5: Order a Home Inspection
We have 10 days to conduct any and all home inspections you feel necessary for your home.
Ask me for a list of our trusted inspectors, or hire someone that was a referral from a friend.
We always recommend the "Big Three" Inspections: Whole House, Termite and Radon. You can choose to hire additional specialists to come out and conduct an inspection, such as a roofer, structural engineer or sewer specialist. Read more about Home Inspections on my blog.
You will be responsible for paying for all inspections you choose to have done. This is non-refundable.
If the home inspection turns up health and safety issues, issue a request for repair by asking the seller to address those issues or give you a credit for them.
Realize no home is perfect, and the inspector will find faults.
6: Request Repairs, If Needed
A home appraisal is an unbiased estimate of the true (or fair market) value of what a home is worth. All lenders order an appraisal during the mortgage loan process so that there is an objective way to assess the home’s market value and ensure that the amount of money requested by the borrower is appropriate. The appraisal can include recent sales information for similar properties, the current condition of the property, and the location of the property, i.e., insight as to how the neighborhood impacts the property’s value. Read more about appraisals on my blog.
8: Final Walk-Through
A house walkthrough should take roughly 30 minutes to complete, enough time for you to be extremely thorough. During this assessment, you should check for new issues that may have come up since the last time you viewed the home.
This is especially important if a major event, like a severe storm, occurred during that time period. Once you close on the home, previous owners are not obligated to fix new damages that may have occurred.
Be sure to schedule a timely walkthrough, about 24 hours before closing on a home, to address any potential problems.
Sign a bazillion documents.
Issue your final check for down payment and closing costs.
GET YOUR KEYS!
Some information from Bankrate, Discover, Investopedia, Allstate and thebalance.