The Buying Process
You are ready to buy your first home… but how does it all work?
Here is a 12 step guide .
As you’ll see from the photos, I am with you every step of the way.
Step 1 : Mortgage Pre-Approval
Pro Tips :
Why is there a picture of a cup of coffee and toast? That’s how long it takes to complete, and what I had for breakfast today.
Your lender will likely pre-approve you for an amount higher than you are comfortable spending.
To figure out your budget, work with your lender to determine a comfortable monthly payment, and work your way backwards from there.
You cannot submit a formal offer without a mortgage pre-approval or proof of funds (if paying cash).
Step 2 : Touring Homes
Pro Tips :
Start looking at houses a month before you think you will be ready to start making offers. This will help give you context down the road when determining if you’ve found “the one.”
Use the checklist below in the early days of your showings to remember what to examine.
If there is even a 1% chance, go check out the house.
You can always send me as your proxy to take video tours if you are working or out of town.
Don’t wait until the open house. In competitive markets, that might be too late, or your decision making timeline will be shortened.
Step 3 : Making Offers
Pro Tips :
Use comps data and offer strategy tips provided by your realtor when considering the terms of your offer
There are many variables besides the sale price when offering. Work with your realtor to determine practical and competitve offer terms and contingencies to present to the seller
Each offer like a new game of cards. You have to work with the cards you are dealt, and be strategic. It’s ok to lose one hand if it sets you up better for the next.
Call me anytime (no matter how late) to talk through offer strategies.
Ready to offer? I can have something to you via Docusign in one hour.
Step 4 : Offer Accepted
Pro Tips :
Note that there are still 8 more steps to get to the closing table.
Your realtor will provide you with a contingency timeline worksheet. It is very important to stay “in contract” and on track with these targets and dates.
Be proactive in completing the next immediate steps. The 7 days after your offer is accepted will be the most stressful of the process.
It’s ok to be nervous.
Step 5 : Earnest Money Deposit
Pro Tips :
You will have 48 hours after the offer has been accepted to send over the good faith deposit (EMD) electronically or via check.
The amount is written into your sales contract and is typically 2%.
The funds are held in the buyer agent’s broker account until the closing date.
If you back out the deal during your “due dilligence period” (see next steps) your EMD is 100% refundable.
Step 6 : Home Inspection
Pro Tips :
You will have ~5 BUS Days to complete the home inspection and report back to the sellers on whether you would like to move forward.
The inspector will provide a snapshot of what repairs need to completed, and how urgent they are.
It’s a good idea to schedule your inspection early in the due dilligence process, just in case you need to bring in a specialist to quote a repair.
Sellers are not required to fix any items that come up at inspection, but can be flexible on items that are considered health, safety, structural, or environmental issues. It is more common for sellers to provide a credit toward closing costs versus fixing items before closing.
You will likely leave your inspection scared sh!tless about buying a house.
Step 7 : Appraisal
Pro Tips :
Schedule this BEFORE your inspection period is over. This is typically the final step before final mortgage approval.
An appraisal is the lender’s valuation of the home’s value before granting you the loan.
Appraisals are subjective. If the appraisal comes in lower than the sale price, this doesn’t necessarily mean that you are “overpaying” for the house.
In the event of an appraisal shortfall, you might need to increase your down payment or negotiate with the sellers on the price of the home.
In the event that your lender is able to qualify you for an appraisal waiver, this will save you around $600 and avoid the possibility of a shortfall.
Step 8 : Mortgage Approval
Pro Tips :
Your lender will begin asking for additional documents after your offer has been accepted. They will also ask for your permission to order the appraisal.
This is the final step before the title company can prepare all of the closing documents for you.
There will be a firm deadline to meet this contingency date, typically ~21 days after your offer has been accepted.
Step 9 : Down Payment
Pro Tips :
It’s a good idea to get your ducks in a row early for moving money around.
The title company collects the down payment and will providing wire instructions after sending the buyer’s statement with a grand total of how much $ is due at closing.
The title company will confirm when they receive the funds. This can take up to 24 hours.
Step 10 : Final Walk Through
Pro Tips :
This is a cursory walk through to make sure that the home hasn’t experienced any structural damages since your inspection.
Expect to find a few scuff marks, nail holes, and a random shovel or rake to be left behind.
Sellers are required to leave the home in “broom clean” condition, so it’s a good idea to plan on doing a deep clean before moving in.
Step 11 : Closing Documents
Pro Tips :
You will receive your closing packet 24-72 before the signing.
Your realtor or title company rep will answer any questions you have after reading
The closing appointment typically takes 45-60 minutes
Step 12 : Home Ownership
Pro Tips :
Make a punch list of items to knock out before moving in, within 3 months / 1 year / 3 years
Be kind to your neighbors
Appreciate what you’ve got
