What are the steps necessary to buy a home?
Updated: Aug 25, 2018
You've searched Zillow and Trulia and found the home of your dreams.... now what? Your journey has brought you to the right place. I have your answer!
The internet has opened up a world of education about any subject your brain can think of. My favorite all time ad is Microsoft's, "Where do you want to go today?" That ad was launched in 1994 and it's even more relevant today. It still swirls around in my head when I'm in a certain mood. I just love possibilities!!!
YOU create your future....not anyone else... it's all up to you. If you choose wisely, everyone around you benefits. Parents, partner, children, even friends.
You will be laying the ground work for your future (and happiness) so I want to tell you up front that it has become more hard work, to pull the documentation together, than it ever was. (you can thank the market correction or Great Recession, whatever their calling it...) It's well worth it but be prepared for a daunting task. Don't get discouraged and be sure to lean on your Realtor.
1.) Contact a few Realtors that you see on the internet or ask your friends if they liked their Realtor. You may want to Google their names to see what they're about. The reason I say a few is because not all Realtors are the same. Just like your teachers in high school... you get along better with some more than others. Just by having a few phone conversations you should be able to tell if you "click".
2.) You can follow step number one, however, this time you are looking for a mortgage loan originator or loan officer. I have a personal preference for the independent loan companies over banks because indies have the ability to shop your loan to all types of lenders not just park you in their own particular product. You should ask the Realtor you picked out to give you about three names so you can have a chat with them. Your Realtor (aka: new BFF) can give you suggestions on what questions you will want to ask the loan person.
(Step #2 is seriously the very most important step because the loan officer holds the key to the whole process. A quality Realtor will keep everything moving at the right speed and is worth every penny that you will never pay them! Both the Realtor and loan officer want the transaction to close and will work hard for that to happen.)
These next steps are easy because you have two professionals on-board who will walk you through the rest of your experience.
3.) Give all your information to the loan officer so they can tell you how much you can afford. (24 to 72 hours)
4.) Have the Realtor show you houses and get one under contract. This is where you give the Realtor a "binder deposit" or "earnest money deposit" to place the house on hold. At this point, you cannot back out unless the mortgage broker says you can't afford the house so you are making a big commitment. Finding the right house should take 2 to 12 weeks depending on how serious, realistic & prepared you are. If you need more time, no problem, your Realtor will stay in touch and continue to answer your questions until you are ready. If you find you need to get into a better financial position your Realtor will help with the process and is trained to always remain professional and confidential.
5.) Now it's go time.... start gathering paperwork just as fast as you possibly can for the loan officer. If you ever thought about over informing anyone here's your opportunity!
6.) At the same time you will order and pay for a home inspection and WDO (wood destroying organism) report which should run $400 to $800 depending on the size of the house. Not to worry...your Realtor knows several and will go to the appointments with you. You will generally have approx 10 days to get this done and find out if you are going to hit a wall or not.
7.) The report will let you know if you want to continue. You can ask the seller to repair a few things if need be. This is a great place for a good, quality Realtor to keep you safe and your whole deal on track.
8.) If you are going forward at this point, you need the appraisal. Assuming the appraisal is good news the title company will order your survey. If the appraisal comes in a bit low you and your Realtor may be able to negotiate a way to continue moving forward with your plans to buy the house. If your appraisal comes in higher than expected congratulations you have equity!! These 2 items will take approx. 3 weeks to complete.
9.) Forces have been at work in the background all this time and the title work magically gets finalized. The title company or closing attorney has been gathering all the parts as the process goes along and they will tell you when it's time to close. From the time you go under contract until you close should be approximately 45 days. Most of the time is taken up by the lenders approval process.
10.) Close the deal and move into your new home!! Yay!! Feel free to call me if you have questions.