2. Get pre-approved for your mortgage. This step will provide you with an estimate of monthly payment and cash needed to buy. The loan officer will also help you understand different loan products and develop your budget. You will need to have a documented pre-approval (called a pre-approval letter) in order to make an offer on a house so skipping this step is not a good idea. If you need a referral to a talented mortgage professional, visit our Resources page.
3. Define new home criteria. We will discuss your individual priorities and start to identify available homes that meet your criteria and are in your budget. Some buyers like to drive by the homes to evaluate the neighborhoods, work commute, surrounding services and amenities, schools, safety, etc. This can help you focus on locations and communities and weed out a few that are no longer worth seeing together.
4. See homes in person. Now that you’ve narrowed down your list, it’s finally time to create an itinerary for our first day out seeing some homes in person. Appointments are required to see homes so we will line everything up for you. We will help you recognize the features and benefits in each home as well as the risks or potential problems. It might take a few days out and second visits to your favorites; the process will end with you choosing your favorite home!
5. Make an offer. Once you decide on the home, we’ll help you make the written offer. All offers for homes are made in writing by submitting a full contract with all terms and conditions of your offer. This step will include:
- Price: We will analyze the value of the home so you know the reasonable price range. This step is to help you make a competitive offer while not paying too much. If a home needs improvements, we will estimate those costs during this part of the process. We will decide on a target price, negotiating strategy and the price of the initial offer.
- Timing: You’ll decide when you want to settle on your home purchase and when you want to move into the home.
- Contingencies: Your purchase may be contingent on you obtaining your financing, inspections and sometimes the sale of your current home. We will make sure all are documented properly in the contract.
- Financing: Because your offer is most likely contingent on financing, sellers will require that we attach a copy of that pre-approval letter you obtained from your mortgage loan officer.
- Deposit: All contracts require a monetary deposit that is refundable in most cases. The amount depends on the price of the home but the norm is one percent. Your broker will hold this money in its escrow account while you work through the inspections and financing process. The deposit will then be applied to the purchase price at closing.
7. Closing processes. Now that the contract is final, lots of things will start happening simultaneously:
- Financing: Even though you’ve been “pre-approved” for your mortgage, now’s the time to complete the formal application and provide required documents to your loan officer. We will coordinate with your loan officer behind the scenes to get the title process started.
- Inspections: You’ll have a short window of time to complete your inspections of the home. We’ll accompany you to the home inspection and help you interpret the results. Depending on the property you might also inspect things like the well, septic system or chimney. You’ll have an opportunity to request seller make certain repairs, and ultimately terminate the contract if seller does not agree to address your repair concerns.
- Appraisal: Your lender will require that an appraiser issue a report verifying the value of the home. There is potential negotiation involved if the property does not appraise for the purchase price.
- HOA/Condo Associations: Seller will provide you with a “resale package” from any applicable associations, which includes the covenants, restrictions, fees and rules of the community.