Buying a home can't be that hard, right? If my offer is made today I can move in tomorrow since it is like renting a place, right? Not quite. In fact, not at all! The process will usually take at least 30 days even if you are paying cash. Why does it take so long? To protect buyers, sellers, and all of the other parties involved in a transaction, there is a lot of paperwork and a fairly long process...and this is a good thing.
Steps in Buying a Home
1. Find a Home You Want to Buy...but Find Out WHAT You Can Afford First. Financing is not just about what you bring home every month. Homes require insurance, interest payments, taxes and upkeep. In addition to actually paying the mortgage, there are several other expenses to consider. Ask a lender to check your credit and get pre-qualified. Even better, get pre-approved so you can show the seller you have a lender who has already willing to loan you the money. Look at, or below, that amount. Looking at homes above what you can actually afford will likely lead to disappointment.
2. Meet with a Real Estate Agent. Now that you know what you can afford, meet with an agent, if you haven't already, and together you can define your wants and needs. Schools, distance to work, the type and lay-out of a home, the yard and upkeep, the number of garage spaces you want, etc. - these things can all be researched by your agent. Agents do this for a living and even sometimes have knowledge and access to information on homes that may not even be on the market yet. Look on-line and do some research on what you are looking for and have your agent make suggestions of homes to look at as well.
3. Submit an Offer. Maybe it was the first home you looked at. Maybe it took looking at twenty homes, but finally you found the one you want! It is time to write up an offer so sit down with your agent and figure out what you are willing to give and what you want in return. Often times an offer can involve more than just how much money you will pay. Will you be renting back to the seller for a while? Do you want the fridge in the garage to be included? What about the chairs in the theater? What deadlines will there be for inspections? There are many more things that go into an offer and it can sometimes seem overwhelming. That is what the agent is for. The offer may be accepted or there may be a counter-offer by the seller. The back and forth can go on for a while but if you come to an agreement, you will submit your earnest money and things move forward.
4. Inspections and Appraisal Once You Are Under Contract. Yes! Your earnest money has been submitted and the home is now under contract.. That is it, right? In a large majority of cases, inspections will want to be conducted by the buyer. These can vary depending on the property. Does the buyer want a radon test? That can take several days. Does the septic system need to have a "Use Permit" issued prior to the sale? That can also take a while especially if there are things that need to be fixed on the system.
A home inspector will look at the home and point out defects, problems, and other issues. A crack in the basement floor? The inspector may recommend an engineer be brought in to look and make sure it is not a structural issue with the home. Do not be shocked by the list of "problems" an inspector might find. They are hired to find all of the problems, even small things that may not matter to the buyer. The back and forth may start again between the buyer and the seller to determine what will be fixed, a contingency for items that may not be fixed, and if the buyer and seller will even continue on with the sell.
The buyer's lender will usually want an appraisal done to be sure the home, which will be their security, is worth enough for the loan.
5. FINALLY! The Closing! Most real estate transactions are done through a title company. A lot has been going on "behind the scenes" while you have been working on the inspection items, getting your loan secure, and packing to move. There have been title searches to make sure the seller is actually the owner of the home. The title company has been checking on any liens on the property where someone else or a company might have a right to payment prior to closing. Documents, lots of them, have been prepared and the title company, your lender, and even your agent have been communicating to make sure the numbers are correct. Once all is in order, you have your closing where you will sign numerous documents. The closer at the title company will walk you through the numerous documents that will require your signature (don't forget your ID as many of them also have to be notarized) but your real estate agent will be there with you as well explaining anything on which you might have questions. CONGRATS! You are the new owner!