Steps To Buying a Home

Recently I was asked, "What are the steps to buy a home?" I was going to email this to a client and decided maybe there are others who might find it helpful. Below, I’ve outlined the basics involved.

  1. Interview and choose a realtor who handles property in an area you wish to live.
  2. Gather your financial records, account numbers, names and addresses of:
    • Checking and savings accounts.
    • Investment accounts.
    • Credit cards.
    • Auto or other loan information.
    • Any other financial obligations or assets.
  3. Ask agent for names of local lenders; interview and choose a lender who will help you:
    • Determine how much money you have for the down payment and closing costs.
    • Determine the ratio and type of loan amount for which you qualify.
    • Determine if there is anything you need to do regarding your credit.
  4. Get pre-approved by the lender; there is no point in seriously looking at homes until step this is complete.
  5. Now, decide what price home you wish to purchase.
  6. If unsure of the area where you want to buy or what you want in the way of a house, preview a broad range of available property:
    • Look on the Internet, in the real estate publications and newspapers.
    • Go to open houses.
    • Your agent can give you an overview of the different areas including what is available in the price range you select and then keep you updated by email.
    • Call your agent if you see an ad or sign you are curious about.
  7. Decide on a desired location(s) where you wish to live.
  8. Narrow your search to specific properties that fit your requirements in this area.
  9. It is not necessary to investigate all aspects of the every property prior to finding one that you may consider writing offer on. Once you find a home that will work for you:
    • The Listing agent can often provide your agent with copies of home inspection, termite, Reports, Geo, Environmental, Hazard, Earthquake, Mello Roos, Lead, etc, which you and your agent can review.
    • At the very least. your agent can provide parcel maps public tax info, MLS, etc on any property you are interested in.
  10. Read and review all of these reports
    • Look for "further inspection" areas; pay attention to health and safety issues.
    • After an offer is accepted, get further inspections in any questionable areas. Get estimates for any repairs, corrections or work you wish to have done.
  11. Strategize with your agent on price, contingencies needed, and how to present these. Write the offer to include contingencies such as:
    • Formal Loan approval
    • Inspections, if not provided or additional, further or repair estimations.
  12. A time line now starts: offer is accepted, countered or rejected in the contract time period.
  13. Once you have an accepted offer “time is of the essence”, and there are time deadlines.
    • Home is appraised
    • Loan approved (Very likely if you are already pre-approval)
    • Any other inspections are completed, reviewed and approved or rejected
  14. You should be satisfied with the condition of the property,
  15. Remove all contingencies (Most contracts call for formal written)
    • Order Home Owner Insurance (Lender won’t fund the loan without insurance)
    • Schedule movers, notify Utility companies of new ownership & transfer date
    • If renting, give your 30 day notice
  16. Schedule time with agent, lender and escrow company to sign closing papers
  17. Bring balance of funds to escrow
  18. You will get a "Congratulations" call from your agent and the key

For more information, read my articles How do you Get Started Buying a Home? and What Do Real Estate Agents do for The Buyer?.