We get it! The home buying process can be overwhelming — whether you’ve purchased several homes before or you’re about to purchase your very first. But it doesn’t have to be confusing or as complicated as you think! With the right support system and a trusted professional by your side, you’ll be moving into your dream home before you know it.
While each circumstance is unique and steps may vary, here are a few insider tips and an overall guideline for how the home buying process typically works. Of course, you should ask your broker any questions along the way! They are there to guide you through each step, ensuring as smooth a process as possible.
From creating your wish list to signing papers on closing day, you’ll find some helpful tips right here!
BEFORE YOU START:
Ask yourself if this is the right time to buy.
Before you even start the home buying process, take a moment to ask yourself if this is the right time. What is your reasoning for wanting to buy? Is it because you’ve heard it’s a buyer’s market? Are you hoping to put down roots in the area? Do some research to evaluate if buying a home makes sense for you.
Get your finances in order.
You may have heard that you’ll need to put 20 percent down on a home, but many lenders permit much less than that, sometimes as little as 5 percent. To help you determine how much you can put down, we recommend sitting down with a local professional at Directors Mortgage. Teaming up with a leading local lender means you receive experienced, professional assistance throughout the entirety of one of the most important decisions you will make. Your Directors Mortgage lender will help you determine how much house you can afford, the type of loans you qualify for, and how much you should put towards a down payment.
Define your goals.
Make a detailed list of all the specific qualities you’re looking for in a home. This will help significantly as you begin to weed through all the available homes in the area. What part of town do you want to live in? How many bedrooms and bathrooms do you need? Do you prefer modern or traditional homes? Knowing your preferences early on can minimize the guessing game as you begin your search. It’s also wise to differentiate between your wants and needs, understanding that sometimes compromises may have to be made.
Choose your local Hasson broker.
This is one of the most important steps of the entire home buying process! Because this is one of the most important financial decisions you’ll ever make, you will want a trusted professional by your side as you navigate each step, including your home search, purchase agreements, inspections, closing, and everything in between. Hasson brokers are equipped with the tools, technology and training to make this process as smooth as possible for you. You’ll want to choose a broker that fits your unique personality and communication style, or one who specializes in the area you’re looking at or the specific type of home you’re searching for (like a condo or a home with acreage). Take a look at these factors to consider when interviewing and evaluating brokers to represent you.
Choose a loan officer and get a written pre-approval.
As you officially begin the process, you’ll want to work closely with your mortgage lender to get pre-qualified or pre-approved. We recommend pre-approval, which involves a more in-depth look at your financial status to confirm how much house you can actually afford. Getting pre-qualified involves a quicker glance at your income, assets and debts to determine how much you will likely be able to afford. Ask your broker to connect you with a preferred mortgage lender at Directors Mortgage to start this process early on.
Search for your home.
Now the fun part begins! Use our advanced search or map search to begin searching for your dream home. Create an account with Hasson to receive real-time property alerts sent directly to your inbox, save searches and listings, and share favorite properties with your broker, friends and family members. You can also download our mobile app to take your home search on-the-go. The app syncs with your Hasson account, so you can search for homes, schedule showings, and communicate with your broker — all from your phone or tablet.
Make an offer.
After much searching, you’ve finally found a home that fits your budget and preferences. At this point, you will work with your broker to determine a fair offer based on the value of comparable homes in the area. After your broker submits an offer on your behalf, the seller will either accept, reject or counter it, and you’ll then determine how to proceed from there. If your offer is accepted, you will officially be under contract! Then, you’ll enter the due diligence period, which means you’ll take all the necessary steps to ensure there are no major issues with the property before the sale is final.
Once your offer is accepted, deposit earnest money with escrow.
Shortly after an offer is accepted, you will be responsible for depositing your earnest money. This deposit demonstrates your intention of following through with the purchase. It shows you are serious about buying the house and that you are unlikely to back out of the deal.
BEFORE CLOSING DAY:
Perform all necessary inspections and gather bids for repairs.
Getting through the inspection is another crucial point during the due diligence period. A professional inspector should evaluate every detail of the home, from the crawl space or basement to the attic and roof. It is recommended that you attend the inspection if you are able to, so you can hear about any concerns first-hand — and be able to distinguish the difference between a major issue and a minor one. The inspector will prepare a detailed report explaining each finding, so you know exactly what potential issues you are taking on.
Your broker will work with you to determine any repairs that need to be made by the seller before the purchase is final. The seller may negotiate a closing cost credit for the amount of the repair instead of completing the repair. This can ensure you get the job done by a trusted repairman.
Get appraisal completed.
To protect their interests, your lender will order an appraisal, which is an evaluation of the home’s market value, based on similar recently sold properties. An appraisal is done by a licensed appraiser, who compares the final purchase price with the actual value of the home. You may be able to renegotiate a lower price if the appraisal comes in at a much lower number.
Final lender approval.
Just before closing day, your lender will need to give their final approval. At this point, you must satisfy any outstanding lender required conditions. Your lender will review your signed documents, pull your credit again, and verify that nothing has changed since their last review. It is important that you have not made any substantial purchases or had any major life changes in this period, such as the purchase/lease of a new car or changing jobs.
THE FINAL STEPS:
Lender sends documents to escrow company for signatures.
Your lender will send all documents for closing day to the escrow company for signatures. The seller will either sign before or after you sign. (Psst…start doing wrist exercises because you’re about to sign a lot of paperwork!)
Before the sale is final, you and your broker may request to do a final walkthrough of the property. This will help ensure the home is in the same shape it was during the inspection, and that there are no unexpected surprises, like insect damage or flooded floors. Ask your broker what you should look for during the inspection! We recommend at least running the water and plumbing, turning on and off light switches and appliances, taking a look in the basement or attic, and inspecting as many details as possible.
Sign all documents with escrow company.
You’re so close to getting the keys! But first, you’ll have to sign the paperwork. Closing typically takes place at the office of the escrow agent or attorney. Whoever is hosting the closing will explain each document you are signing and help answer any questions you have.
Lender reviews all signed documents and releases funds for recording.
The lender will review all signed documents to make sure every “i” is dotted and every “t” is crossed. If all looks good, they will release the funds for recording!
Congratulations — you are officially a homeowner!
You did it! It’s officially time to celebrate once you receive your keys and can open the front door of your home as its owner for the very first time. Pop open a bottle of champagne and celebrate this exciting time!
Stay in touch.
Now that you’ve started moving into your new home, you may be interested in learning more about the community. Be sure to follow our community-focused blog, The Local Arrow, for information about your neighborhood, local events, home inspiration and real estate updates. And stay connected with your broker so you know who to call when you’re looking to sell your home in the future!