The Home Buying Process Step By Step

The Home Buying Process

The home buying process can seem complicated, but if you take things step-by-step, you will soon be holding the keys to your own home! The nine steps outlined below will make it easy; if you are a first time home buyer, we encourage you to review the entire suite of first time home buyer articles that contain information on such topics as obtaining financing and the benefits of working with an experienced real estate agent.

1.     Analysis

2.     Loan Preapproval vs. Prequalification

3.     The Right Place To Look

4.     Seeing Homes

5.     Making The Offer

6.     Contract Negotiations

7.    Inspections

8.     Pre-closing Preparation

     9.     Closing

Analysis

Congratulations on your decision to purchase a new home! Your first step toward buying your new home will be to analyze your needs. By analyzing your needs, you will be able to get a clear picture of exactly what you want your new home to look like and how it should function for you.

First, you should write down why you are looking for a new home. For example, are you currently renting and would like to have a home where you can begin building equity? Maybe you recently married and have outgrown your current residence or your kids are ready for school and you want to be in a better school district. These factors will all have a bearing on how you approach your home search.

Establish a time frame that you would like to stay within for buying your home. Depending on your reasons for wanting a new home and the current state of the market in the area you are looking to buy, you should be able to come up with a rough guideline.

Finally, you probably have a mental picture of what you would like your house to look like and what features it should have. It's very important to write these ideas down to avoid any ambiguity later in your home search. You should make at least two lists: one should be a list describing your dream home and the other should list the features of the home that are an absolute must have in order to buy it. In a perfect world, your new home would fulfill both lists 100 percent. It is more likely that you will end up blending the two lists into a schedule of prioritized items as you progress through the buying process. This is a natural and evolutionary process as you get clearer about what you want and what is available.

Your home selling seam consultant can save you time and money by putting their expertise to work for you. We will be able to help you organize your wants and needs and then assist you in realizing how your wants and needs will fit into your home purchase plan. We will be able to helpfully focus your energies into what is possible for you and your family.

Back to Top

Loan Preapproval vs. Prequalification

Now that you have your list of features you want in your new home, you are ready to start looking! Well, not just yet. You are going to need to know your price range. The two ways to go about this are to get pre-qualified or pre-approved for a mortgage. Either way you will need to contact a mortgage company.

There are some key differences between pre-qualification and pre-approval for a loan that you need to be aware of. Loan pre-qualification is a simple process. It takes into account very basic information regarding your financial status and gives you an amount for which you may qualify. This can be done strictly on a verbal level or electronically over the Internet.

The pre-qualified amount is based solely on the information you provide. Pre-qualified buyers usually hold little clout compared to pre-approved buyers due to the fact that the information given during the pre-qualification process is not thoroughly investigated and therefore may be unreliable. Where a pre-approved buyer is actually approved for a loan of a certain amount, a pre-qualified buyer is only told that they might be approved for a certain amount.

Pre-approval is a much more involved process. The lender will take all pertinent information regarding your finances and perform an extensive check on your current financial status. This will ultimately give you the exact amount that you will be eligible for (depending on what type of loan you decide to get). Being pre-approved lets the seller know that you have gone through an extensive financial background check and there should be no unexpected obstacles to buying the home.

You can see how being pre-approved would be more attractive to a seller than just being pre-qualified.

Back to Top

The Right Place To Look

Now that you have your list of needs and wants and you know how much you can afford to spend, there are a few more things to consider. Step back for a moment and consider the larger picture. People don't just buy a house; they buy the neighborhood and the schools the house is in. Think about that...if you found the perfect house but it was in a neighborhood or school district that was not to your liking, would you make an offer on it? Most likely the answer would be, "No."

So, you will need to make another list of what type of neighborhood you want to live in. You will want to consider things like how living in the neighborhood will affect your drive time to and from work, what amenities are offered (swimming pool, tennis courts, park, etc.), and, if you have children who are attending school or soon will be, what school district you will be in and how close the schools are. You may even want to make two lists just like you did with your home criteria.

If you don't know much about the area that you are considering moving to you will want to start your search by speaking to your home selling seam consultant to find neighborhoods that meet your criteria. Then you will be able to narrow your search to homes in those areas.

Another good way to help decide where to look is to browse our website to find the right school(s) or study the maps to see where you are and or will be working, then discus the commute with coworkers that live in various directions from your office to see which commute is the best (then drive it yourself).

Your home selling team consultant can save you time by taking the information from your list of needs and wants for your home, your pre-approval, and your list of needs and wants for the neighborhood and incorporating them into a broad search profile which will then be narrowed down to specific areas dictated by the market in which you will be looking. Your home selling team consultant's experience in the local market will be an invaluable resource during this step.

Back to Top

Seeing Homes

At this point you will have a good idea of what you can afford and what type of neighborhood(s) you will want to live in. Taking that information into consideration you are ready to embark on your actual home search.

We pride ourselves in keeping up to date with specific information about properties in all of the areas in which we work. We will save you time by keeping you up-to-date on available properties that meet your criteria.

By using our website you can eliminate the haphazard searching through papers and allow the listings to come to you through your e-mail, or you can search on our MLS search. The best part is that when you find several homes that you like, your home selling team consultant will arrange for you to tour the properties when it is convenient for you.

Sign up for a My Home Finder Account which will allow you do your own Home Searches using the South Florida MLS.

With our Home Finder system, you can establish your own unique search parameters and narrow the thousands of homes available in the area where you are looking. Save unlimited favorite folders to help you organize properties which match your personal criteria.

We are always glad to do searches for our clients, but we have found that most people prefer to see all their options for themselves. Don’t hesitate to ask us to search for appropriate homes for you, but there is nothing quite like the feeling when you see a house on the Home Finder that really jumps at you. We are, of course, available if you have questions about the Home Finder system or anything regarding the home-buying process.

Back to Top

Making The Offer

Now that you have found the home you would like to purchase, it's time to make an offer. Taking into account the recent sales of homes in that neighborhood which are similar in size, quality, conveniences, and amenities, what are you willing to pay for the home? Your Real Estate consultant will provide you the sales history of the surrounding homes that are similar in size, quality, conveniences, and amenities and help you determine how much to offer.

• Your home selling team consultant will make sure that everything is in written form... no verbal agreements.
• Your home selling team consultant will present the seller or sellers represented with a written offer to purchase the property
• The contract will protect the best interests of you, our client, not the seller
• The contract, though not limited to this list, will include the following:
  • Legal description of the property
  • The offering price
  • The down payment
  • Financing arrangements
  • Amount of the deposit
  • Inspection rights
  • Who will handle the closing
  • A list of appliances and furnishings staying with the home
  • The settlement date
  • Contingencies

Remember that if you have any questions or concerns, they need to be addressed right away. Your consultant can save you time and money by making sure that your questions or concerns are answered and resolved quickly.

Back to Top

Contract Negotiations

Once your offer is made negotiations may be required to reach an agreement. Keep in mind that almost everything is negotiable when you are buying a house. This can give you a great deal of leverage in the buying process, that is, if you have adequate information and you use it in an appropriate manner. Some of the things that you may need to negotiate are:

• The price
• Closing costs
• Occupancy time frame
• Appliances and fixtures
• Repairs that need to be done

The key to successful negotiating is keeping in mind that the end result must make you, the buyer, and the seller happy. Your home selling team consultant can save you time and money by representing your best interests and negotiating on your behalf. Your home selling team consultant has the knowledge and expertise necessary to make sure that your offer is accepted at the best price and terms possible for you, not the seller.

Back to Top

Inspections

After your offer has been accepted, the property will need to be inspected. A property inspection, HVAC inspection and environmental (asbestos, mold, radon) test should be completed to make sure that the property is up to the standards set forth in the Purchase and Sale Contract. If there are issues or inconsistencies brought to light we typically have 10 days to reach agreement on how the seller will resolve the issues.

Having these procedures done in a timely and professional manner is a must, if not the seller can demand performance and at a minimum you will lose your earnest money. You could also face a lawsuit that demands performance. Your home selling team consultant can help you find the appropriate companies to do the appropriate inspections and complete the needed amendments to the contract to avoid such problems.

Homeowner insurance is another very important item that we will need at this point. Insurance experts recommend that you obtain insurance equal to the full replacement value of the home. Unless proper insurance coverage is in place on the home, the closing cannot proceed.

Your home selling team consultant will save you time by supervising the coordination of all necessary inspectors and contractors. We will make sure that they have access to the property at the appropriate times. You will want to attend the inspections yourself to discuss the findings with the inspector. Your consultant's experience in this area will be invaluable in making sure that everything is completed on time and in a professional and legal manner.

Back to Top

Pre-closing Preparation

As the closing date draws near you will need to be in contact with the closing attorney and your mortgage lender to make sure that all the necessary documents are being prepared.

A few days before the closing the property you will need to contact your utility services such as electricity, gas, cable, water, and phone set up, Your home selling team consultant will provide you with the information for the appropriate utilities to contact.

Lastly, you should find out what form of payment you will need to bring to the closing for any unpaid fees. Make sure that your payment is made out to the appropriate party. Your consultant can save you time by coordinating the necessary documentation with your closing officer to make sure you have a quick, easy closing.

Back to Top

Closing

Closing is where ownership of the home is legally transferred from the seller to the buyer. It is a formal meeting in which most parties involved in the buying/selling process will attend.

Closing procedures are usually held at the Mortgage Company's office or an Attorney's office. Your closing Attorney coordinates the document signing and the collection and disbursement of funds. In order for the closing to go smoothly, each party involved should bring the necessary documentation and be prepared to pay any related fees.

Most lenders will allow a credit from the seller to the buyer for the non-recurring closing costs. However, they usually won't allow a credit that reduces the amount of the buyer's down payment or any of the buyer's recurring costs, such as expenses for fire insurance premiums, Private Mortgage Insurance (PMI), or property taxes.

Your home selling team consultant will be present at the closing ready to help by answering any questions or helping to resolve any issues that may arise. Your consultant will also be available to manage any last minute or unexpected details.

Congratulations on the purchase of your new home! 

Back to Top        



**For more expert real estate advice, check out the many other FREE articles and e-books written by real estate professionals containing tips and insider secrets available on the web's # 1 resource for home buyers and home sellers looking for real estate advice from knowledgable and experienced real estate professionals.  Search thousands of homes for sale on the South Florida MLS or search homes in some of Broward County's most best communities using the Neighborhood Home Search feature.**