The Home Buying Process – What To Expect
The Home Buying Process is a complex process.
New home buyers are often caught off guard when they discover everything that goes into it.
During the home buying process buyers will learn more than they probably imagined about real estate, contracts, mortgages, and home ownership. This flood of information can lead to stress and confusion.
I want to prepare buyers with this home buying process checklist and hope to do that by breaking it down here. If you are buying a home for the first time it can be overwhelming.
Here’s exactly what you can expect about The Home Buying Process:
The first step is for you, the buyer, to contact a mortgage lender and get a pre-approval for a home loan. The lender will run your credit (typically looking for a score of 640 or higher). They will discuss your income and debt with you and work with you to establish a budget.
You should ask for a written pre-approval that states how much you are approved for; both your realtor and the seller will want to see this before accepting a contract.
Find a Realtor:
After you get your pre-approval you are ready to begin looking at homes. However, you will want to establish a relationship with an experienced realtor/buyer’s agent in the area. The realtor will set appointments and view homes with you as well as write the offer and manage the contract for you.
They have a lot of knowledge about the local market and the area. Listen to what they have to say. Buyers do not pay for the services of a realtor; they are paid by the seller. You may be asked to sign an agreement with the agent to work exclusively with them. This is so they get paid for their time and expertise.
Start Your Home Search:
Make yourself available to your agent to view homes as they come on the market. The great homes often go under contract very quickly. Be clear about what you are looking for and depending on your price point you may have to sacrifice some of the things on your wish list.
Keep an open mind but don’t make an offer on a house you’re not happy with. Home shopping is one of the best parts of the home buying experience.
Make an Offer:
When you are ready to make an offer on a house, your realtor will type up the contract and communicate with the seller or agent. Read through all documents thoroughly before you sign and ask questions about anything you are unsure of. This is a legally binding contract.
Under contract means you have an accepted offer. You or your agent will then send a signed contract to your lender to begin the loan process. You will want to schedule an appointment with a home inspector to get inspections completed right away. There is usually a timeline in the contract to get inspections done and make repair requests.
After the home inspector sends a summary to your realtor you will work with them to request repairs from the seller. The seller will agree, make a counteroffer or decline to make those repairs and you can decide whether or not to move forward with the contract.
Underwriting & Conditional Approval:
Once your loan papers have been reviewed and signed they will be sent to underwriting to review your file. The underwriter will go over your income, your credit, your debt, your bank statements, employment verification, taxes and more and decide what else they need to finalize the loan and issue a conditional approval. You will be notified of what conditions you will have to meet in order for them to approve the loan.
One of the conditions that have to be met is a good appraisal. An appraisal is ordered by the loan officer but you will pay for it. To protect the lender, they will want to see that the value of the home you are buying is equal to or greater than what you are paying for it. If the house comes back with a low appraisal they will not make a loan for the higher amount but you might have other options such as asking the seller to bring down their purchase price.
Appraisals can take some time to be completed and most often won’t be done until the seller has completed any repairs.
Clear to Close:
If appraisal goes well, inspections and documentation are in order the file goes back to underwriting and the title is ordered. Once underwriting approves everyone is given a clear to close and the closing is scheduled.
People often ask how long is the process of buying a new home and it’s different for everyone based on how much they can afford, finding the right home, and all the repairs that home may need.
This is a simplified look at the home buying process. It is not uncommon for a home loan to have to go back to underwriting a couple of times. Do your best to remain calm and confident throughout the process. Your realtor and lender are there to support you and answer any questions you might have.
It is important to understand what to expect in the home buying process so you know what to expect. It is an important milestone in your life, congratulations.
HomeMembeship adds Peace of Mind For New Homeowners:
With a HomeMemership plan you will have added peace of mind knowing that if a home appliance breaks or major system stops working, you would have an easy way to submit a claim and one of our specialized, pre-vetted professionals will be on their way to repair or replace your covered item.
Our membership also includes Members-Only Discounts towards home services, retail shops and more. From lawn care to interior decorators and carpet cleaners, our warranty offers immediate benefits that go beyond standard long-term protection.
Your membership gets you discounts from local businesses on services for your home so you can save money now and later.
You should also learn more about What You Need to Know About Your Home Inspection. You want them to find anything that could go wrong in the house before you own it.