Buying a home can be a great experience. Of course, it can be a bit bumpy along the way as well, but one way to avoid the anxiety and fear that can accompany the process is to understand the process. Every situation is different so it is possible that your experience could be a little different, but here is a general overview of the process to buying a home.
1. Speak to a Loan Officer
So, we are going to skip the part where you are looking at homes online and debating whether or not you should buy a home, can buy a home, and so on. We’re going to begin at the point that the deliberations are over and it is time to act. The first step should be to connect with a Loan Officer to determine what loan program will meet your needs, what your price and payment options are, and so forth.
It is not uncommon for the first call to be to a real estate agent, but most of the time the agent is going to suggest you speak to a Loan Officer before they begin showing you homes. They want to know that you can get approved for a mortgage and what price range they should be looking in to meet your comfortable payment criteria.
It is a good idea to get your loan application going as well, to include providing the required financial documentation like pay stubs, W2’s, and bank statements, for example. This will allow the Loan Officer to better evaluate your situation and may even allow for a pre-approval.
2. The Home Search
Searching for a home, for many, is really fun! At first. Even with a very good Realtor, it is possible that your home search can take a while. Perhaps because you just cannot find the right home for you or maybe you put in a couple of offers and lost the bid to other buyers. If the search persists, it can quickly evolve from being fun to being extremely tedious and exhausting because it tends to consume every waking moment until you have found what you are looking for.
The good news is there are some things you can do to help your search be more efficient and to increase your chances of winning your bid when there is competition from other potential buyers. The key is to be prepared, remember what motivated you to begin with, and be patient.
3. The Negotiation
Once you have found your little piece of perfection, or near-perfection anyway, it is time to submit an offer. Your Realtor will look at recent comparable sales to determine if the asking price is in line with the value and look for any red flags (such as discrepancies between the listed information and public record) that could be an issue later. Assuming all is well, your Realtor will help you write an offer; which is a completed contract with terms and contingencies to buy the home.
Once you submit the contract to the seller or seller’s agent, it becomes a waiting game. The seller has three options: they can accept your offer as it stands; they can reject your offer outright; or, they can counter your offer with revised terms. A counteroffer is typically made by striking through one or more terms on your original offer and replacing it with their terms. Then the ball is back in your court and you can accept, reject, or counter their offer. Wash, rinse, and repeat until one side backs out or both sides agree on the terms and sign the contract.
Look for part 2 of this blog post coming soon! If you can’t wait and are ready to talk to a Loan Officer to start your home-buying adventure, do not hesitate to contact me.