This past year, we started a series called “tips for buying a home”. This was part of an entire real estate series that you can see here {if you’re curious}. Because of that, a reader wrote in to ask if we could add to our series and cover the buying process from beginning to end for the new buyer, as they were getting ready to buy a home later this spring. This topic is definitely worth covering, so let’s dive in: The Home Buying Process.
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1. The Home Buying Process: Hiring an Agent and The Loan
Once someone decides they’re ready to dive in and buy a home, the first step is to get their finances ready, and hire an agent.
You’ll want to do some shopping here, and you can really start with either. There is no right or wrong to the process. You may already know who you want to use for your loan, or, as your real estate agent. Whichever feels best would be a simple place to start.
• When You’re Looking for a Loan: Make sure to compare a few options and lenders. You’ll want to make sure you’re comparing apples to apples, so if the language is a little foreign to you, take time to research and understand the offers. Sometimes, what seems like the best offer actually isn’t, once you dig into it.
• As you Hire a Realtor®: Make sure this is someone you feel comfortable with on a personal level, and that you believe this person will fight for your interests above everything. The biggest mistake people make is getting a Realtor® that just wants to make a sale, not one that wants to help their client find the right house for them. Your agent needs to be one that is more likely to talk you out of buying a house than into buying one. It should be their goal to help you find the right house, not simply one that will ‘do’.
Outside of personality, make sure you feel like they have time for you and will make time for you. You’ll have a lot of questions and concerns, you’ll want to feel comfortable that they will be there to answer them for you.
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2. The Home Buying Process: Viewing Homes
Once the agent is hired, you’ll provide them with some criteria. What you’re looking for in size, bed/bath, and location, as well as how much home you can afford or want to afford.
From there, your agent will develop a list of potential homes that are available, and provide you with available data on them. You’ll pick some you like and the agent will handle scheduling the showings for you.
{Be sure to check out our entire series here where we’ve outlined a whole lot to consider.}
The biggest piece of advice I can give here, is to be diligent. Don’t be afraid to spend some time in each home, and really take a hard look at it. It can be a little weird looking at someone else’s home, but if it’s a home you are truly interested in, don’t be afraid to really investigate, and do your due diligence. {See above link.}
Also, don’t box yourself in with too-tight parameters. Go a little above and below what you think you want and be open to being surprised. We found our own home that way, after agreeing to seeing one we weren’t really interested in because of square footage. {We just added on later.} So you never know what will pop up.
3. The Home Buying Process: Making an Offer/Counteroffer
Once you have decided on a home you like, your agent will prepare an offer to present to the seller. This is a binding contract that requires earnest money, or money to be held by an escrow company until the sale closes. This money is a “good faith” pledge that you will follow through with the sale. If you cancel the contract without cause, then you will likely lose this deposit.
The contract does not become binding, until the seller accepts it. Once accepted, the contract is binding and you move to the next phase.
However, if it is not accepted, then the seller will either outright reject the offer or they will provide a counteroffer to you. At this point, the original offer is void, and it will be up to you to either accept their new offer or to counteroffer them.
This continues until either you both accept the terms offered or one of you rejects the offer and walks away from the proposed deal.
4. The Home Buying Process: Inspections and Contingencies
Once the offer is accepted, there will be an inspection period. This should be laid out in the contract. It will be for “X” amount of days, and you will have this time to have the home professionally inspected. The inspector will provide you with a report and suggested fixes.
It’s now your choice if you want to ask for anything to be repaired, or proceed with the way things are. If you ask for items to be fixed, you’re back to negotiating. The seller is not obligated to fix anything, but if they do not, then you can cancel the deal without losing your earnest money.
So, it is generally in their best interest to give some here. My advice here is to ask for more than what you think you’ll get. This way, you might get some of the things you really want while conceding the ones you don’t care a lot about.
Contingencies are another part of this stage. They would involve things like the ability of the buyer to secure a loan, or the seller to produce a clean title. They might even include fixes that are agreed upon. Basically, they can be anything that is written into the legal contract that if not fulfilled by one party, voids the contract without penalty.
5. The Home Buying Process: Pre-closing
This is the time when all the behind-the-scenes work is being done. Your title company will be busy researching the property and preparing to offer an opinion on the property, its title, and any encumbrances.
The loan company will be finalizing all the documents preparing to make funds available, and will most likely be requesting additional paperwork and documentation from you. It’s good to remember that during this phase you should minimize spending. {They’re watching you.}
The closing attorney will be preparing all the legal documents to make the transfer of the property legal and your Realtor® will be staying in contact with everyone, making sure things are moving along as they should. They’re also a great resource as you prepare to take possession and move.
6. The Home Buying Process: Final Walkthrough
Within 24 hours of closing, you will do a final walk-through of the property. This is to verify that everything is as it should be in the home, that things have been fixed or that nothing has changed or been damaged. It’s your final time to verify before you sign all the papers.
7. The Home Buying Process: Closing
Get those finger stretches in, because you’re about to sign a lot of stuff. You should have received pre-closing documents before this day, which will give you an idea of everything. Also know that your real estate attorney will have prepared and reviewed anything. Along the way, they will point out anything you really need to pay attention to.
8. The Home Buying Process: Ownership
After you’re done with closing you’ll receive a stack of papers and the keys. The home is yours, but you’ll still have a few things to do. Here’s a little list to make sure you do the below, or that it has been done.
• Change your mailing address. The post office has a form for this and you can even get it online.
• Change all the utilities to your name.
• If your state has a homestead tax exemption, make sure you record it or that someone has done it for you.
• Move in and enjoy the property!
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While there really is a lot more that goes into the process, this should give you a basic idea of what to expect and when you hire your Realtor®. They will be able to guide you even more. We hope this helps give you an idea if you’ve never purchased a home before. A little knowledge and prepping beforehand, can go a long way.
Pssst… If you are in the Nashville area, we’d love to help you find your next home or even sell the one you have. We’d love to hear from you! Jamin is an agent with Benchmark Realty.
Have an inspired day!
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