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The Home Buying Process

Choosing to buy a home is one of the biggest decisions you’ll make in your life. It’s a complex ordeal that requires a lot of planning, and instating the help of a knowledgeable Real Estate Agent to make the process run smoothly. To ready you for this, here is a general overview of the step by step process.

Get Your Finances In Order

The first thing you’ll need to do is put money aside for a down payment. This amount is (at minimum) 5% of the purchase price of the home you’re planning to buy. Second, you’ll need to meet with a mortgage broker to determine what you can afford. Shopping around for the best rate is highly recommended.

The home buying process begins by conducting a personal audit of your finances. A self-audit of your finances includes these three steps:

How much savings do you have? Before you consider purchasing a home, you should make sure you have a solid savings plan in place. You also need to have two to four months of living expenses already in savings. These funds can help pay some of the initial expenses like a down payment and closing costs. Lenders will want to see that you are responsible and have a savings plan that works.
What does your current spending look like? It’s important to know how much you spend every month. You also need to know exactly where your money is going. This step is essential for calculating how much of a mortgage payment you can afford. Make sure to account for all of your expenses, including everything from utilities to groceries and clothes to student loans. Count retirement funds, regular savings, entertainment, and kid’s activities.
How is your credit? To qualify for a home loan at the best available rates, you will need a good credit score and a solid history of paying bills on time.

Getting a mortgage pre-approval from a lender removes a lot of the hassles from the home buying process. Your lender will provide a pre-approval letter stating how much you are approved for. This will be based on your credit standing, income, and present assets. The pre-approval letter will help your agent find homes within your budget and proposed loan amount.

Meet With A Real Estate Agent

It’s important to partner with a Real Estate Agent you feel completely comfortable with. A REALTOR® can help you find your dream home, that meets both your needs and your budget. They will set you up with viewing appointments, and also help bring clarity to the complicated process of buying a home. You’ll want to go with an experienced and knowledgeable REALTOR® who you can be sure will represent your best interests.Some of the ways a real estate agent can help you when purchasing a home include:

Knowledge of Market Trends: Agents identify home value trends, buyer demand, the overall state of the market, and new developments.
Price and Value: An agent knows what a home is worth and can help you with a reasonable offer price.
Negotiations: They will know when a lower price is appropriate and argue to negotiate prices based on repairs needed or other contingencies.
Insider Tips: An agent is familiar with localities and can offer tips about schools, neighborhoods and how those may influence property value.
Professional Recommendations: If you need a lender, contractor, attorney, or another vendor, an agent will make referrals.
Experience: The agent is familiar with the process and brings their expertise to the table to help handle the process and oversee paperwork to ensure you stay ahead of due dates.

Visualize Your Dream Home

Once you’ve established a price range, it’s time to decide what type of home will best suit your lifestyle. Think about things like access to schools, recreational facilities, what the neighbourhood is like, and so on. Why you’re choosing to buy should help answer these questions for you — so think about it carefully. You may want to put this down in writing and create a needs v/s wants list.

The Search

Using the property search on this site and consulting with your Real Estate Agent, you will be able to find homes in your desired area. They’ll update you frequently regarding new listings and schedule you appointments with sellers.

View Homes With Your Real Estate Agent

The agent will recommend properties that have the features you want and are within your budget. Don’t get discouraged if you don’t find the perfect match right away. You may need to look at several options before finding the one that is right for you. Most of the time, the agent will have a handful of homes for you to preview to see if you like them or not. Be patient; your agent will help you find what you want. You may see several homes so it’s a good idea to take photos or videos so you can remember each one.

Make An Offer

Once you are sure of the home you want to buy, work with your real estate agent. They will help you negotiate an offer based on the fair market value of comparable homes in the same neighborhood. When you and the seller agree on a price, the home goes into escrow while the home buying process gets completed. Don’t get discouraged if the offer doesn’t work out. Sellers have the option of rejecting or accepting offers. Sometimes, several offers are made until successfully closing on a home. Once you make an offer, several things can happen.

The seller may accept the offer, and you’ll begin the process of finalizing the paperwork to complete the purchase.
The seller may reject your offer.
The seller may counter back with another offer. They may not like the price or some other part of your offer. They will request changes and then accept the amended offer.

Schedule A Home Inspection

If you know a home inspector, you can hire them to conduct the inspection. Your real estate agent may also be able to recommend a reputable inspector. Having the home inspected will give you a better idea about the inner workings of the home. After the official inspection, you’ll be given a detailed report with the findings. Discuss these with your agent. If there are issues found that are more than just a cosmetic problem, negotiations can be reopened. The seller can be asked to fix any issues before closing on the house. Sometimes, they will give you credit so you can make the repairs after you have made the purchase.

Closing

Once the seller accepts your offer, you will work with your lender to complete the mortgage paperwork. The lender will usually request an independent appraisal of the property. This step protects both the lender and you. It’s important to ensure that you are getting a fair price for the home. Three things can happen after the appraisal.

The appraisal matches what you offered, and the lender will clear the loan so you can close on the property.
The appraisal is more than what you offered. This will indicate you are getting a good price for the home, and that means you’ll have instant equity.
The appraisal comes in below your offer. In this case the lender will not approve the full amount of the loan. You may need to make up the difference or try to renegotiate with the seller to get a better price.

Once the lender approves your loan, they will arrange for a title company to handle the paperwork. The title company will check to make sure the seller has the right to sell the house. Once the title search has been completed, you will pay your down payment and closing costs. Then you will sign your mortgage and get your move-in date.