The Steps to Purchasing a Home

The Steps to Purchasing a Home.  Many people will give you advice on how to purchase a home.  They mean well, but most people you know haven't purchased a home recently and their information could be outdated.

This blog post contains a lot of information and you may need to refer back to it from time to time.  We've tried to keep it short, but it may be too long for some of you.  We've also tried to keep it from too boring, but couldn't figure out how to make this content really exciting :-)

Here are the steps to purchasing a home:

1. Find a Realtor- There are many ways to find a Realtor and different ways of selecting a Realtor.  Every buyer's needs are different and each Realtor has their own unique set of tools to offer you.  Some are more experienced, some are better at follow up and some are very tech savvy.  What's important is that you find a Realtor that you trust and one that you feel will do a great job for you. 
   
   
2. Sign the representation agreement - Your Realtor should ask you to sign an representation agreement where the duties of each party (Realtor & client) are spelled out.  Most agreements also spell out the type of housing, the term of the agreement and the town(s) that it covers.  The term of the agreement or # of days in the period of time can go from 1 day to as long as you'd like.  You can also complete the agreement for specific properties.
   
   
3. Speak to a mortgage broker or bank- A big part of purchasing your new home is the determining the correct price range.  A mortgage broker or a bank can pre-qualify for you for a mortgage and let you know your purchasing power.  They will pull your credit and ask for tax returns, W-2's and other such paperwork.  They will tell you how much money to put down and explain different types of mortgage financing.  Your Realtor can most likely recommend professionals to help you.
   
   
4. Give the pre-qualification letter to your Realtor - this will go into your file until you put an offer on a home that you'd like to purchase.  This letter may need to be updated down the road.
   
   
5. Familiarize yourself with the market - Have your Realtor send you homes to consider from the multiple listing service (MLS) or use a major real estate company's site (like Prudential) Realtor.com, trulia.com or other sites to find out what the homes in your price range look like.  This will also help you to select towns and/or neighborhoods.  This is an ongoing process until you find the right home.
   
   
6. Submit an offer to purchase - Across the country, the paperwork changes and is called by different names.  Essentially, your Realtor will write up an offer on the correct paperwork and present it to the selling side.
   
   
7. Negotiations - Some negotiations are easier than others.  Basically, the seller should counteroffer your written offer and perhaps some of the other offer terms (closing date, items included, money down, etc).  This continues until both parties agree or you come to an impasse.  If an impasse happens, then you'll start to look at homes again.
   
   
8. Inspections - Are usually completed within a short period of your offer acceptance.  Your Realtor will tell you what is customary for the area and can provide you with a list of local professionals.  You should attend the property inspections, as well as your Realtor.
   
   
9. Negotiations - Depending on what is found during the inspection period, you will ask the seller to fix items or give you a credit at closing to fix items.  Generally, you will not ask the seller to fix every little thing that is found in the inspection.
   
   
10. Formal Contract - In some parts of the country, the offer form is a formal contract in other parts it is not.  If your offer form is not a contract form, then the seller's attorney will draw up the formal contract of sale and your attorney will review it.  After the attorneys have reviewed it, both parties will sign it.
    
    
11. Bank Appraisal - The bank will send out a local appraiser to the home you would like to purchase.  This is an important part of the process for many reasons.  The appraiser is an uninvolved third party who will place a value on the home.  This will be submitted to the bank.
    
    
12. Mortgage Commitment - This is when the bank puts into writing that they will agree to lend you the money to purchase your new home.  Sometimes, the mortgage commitment has "conditions" that need to be cleared.  Conditions can be something simple like providing a receipt for your homeowner's insurance to providing the source of your down payment.
    
    
13. Set up the Utilities - About 10 days prior to closing, we recommend contacting the utility company (electric, cable, oil, telephone) and set up service to be turned on the day of closing.
    
    
14. Purchase Homeowner's Insurance - You will need homeowner's insurance for your new home to go into effect the day you close.  You will also need to provide a paid receipt for 1 year's insurance to your mortgage company.  If you do not have an insurance agent who handles homeowner's, your Realtor may be able to recommend a local agent.
    
    
15. Final Walk Through - This should be done the day of closing approximately 1 to 2 hours prior to closing.  Your Realtor will meet you and together you'll check the home to make sure it's being left in good condition and that it's clean.
    
    
16. The Closing - In this area, the closing takes place at the office of the seller's attorney.  The buyer will sign the mortgage documents and the seller will sign the deed.  There is other paperwork and if a problems comes up, it can be resolved at the closing.  A typical closing takes 1 to 2 hours.

We hope that you find the steps to purchasing a home helpful. 

If you have any questions about the steps to purchase a home, or if you would talk to us about possibly being your Realtor, please Email us!