When it comes to how to purchase a home, most people don’t know how they start looking, what the process is, or even which inspectors to hire. I’m going to answer these questions along with many others you may have as I explain from start to finish the steps needed to buy a home.
Preparation is the first step of the home buying process which combines three mini steps into one, mainly because they are all done simultaneously. The first part is to get pre approved. Once you’ve been pre approved and know what your price range is, you’re likely going to want to start looking. The natural next step would be to conduct an online search to see what houses and neighborhoods fit your price range. Once you start searching online, you’re likely to see 50, 100 or even more properties that fit your criteria. Along with an online search, most of my clients like to drive the neighborhoods to get a feel of the area they’re looking at from their computer to help narrow their search even further…this would be what I consider the third part of step one.
In step two of the home buying process, you begin to go and look at the interior of properties. As you go and see these homes you’ll start to get an even better idea on how to narrow your search even further. Once you have found the home you want, you send in your competitive offer! Be sure you have a realistic timeline of hearing back from the seller.
Once your offer is accepted, the third step in the home buying process begins. There are a few mini steps you must take care of simultaneously on this one… First, you have to send in your deposit to the escrow company. This will start a timeline or a countdown for you to do all your inspections, have an appraisal done and close escrow.
Along with the inspections, you need to provide detailed financial information to whoever is doing your loan. Simultaneously, they will also schedule an appraiser to come out and evaluate the property. All the inspections and lender requirements must be done within a time frame which I discuss further in my “Contingencies ” video. Also, if you want further detailed information about just the home loan process, you can check out my “HOME LOAN PROCESS” video.
For the fourth step, all of your inspections have been done along with the appraisal, and your contingencies have been removed. At this point, if you choose to back out of the deal for whatever reason, the seller can keep your deposit for basically wasting their time. Once you start to near the end of the escrow process you will need to prepare your funds to be sent over to the escrow company. At about the same time a representative from escrow will inform you that your loan docs have arrived and are ready to be signed. After you get to sign the huge stack of loan documents, the escrow officer will let you know when and how to pay the remaining balance that will be due from you.
In the fifth and final step, you pay all the funds that were requested by escrow and wait the last few days while everything is transferred from seller to buyer and vice versa. Escrow will also record all the necessary documents with the local county office. After this final step is done, you collect all the paperwork you’ve signed and most importantly, you get the keys to your new home!
Keep in mind that most of the lenders steps are not required if you purchase a house in cash. Regardless of which financing route you plan on taking, the remaining steps should all be nearly identical. Remember my suggestions on inspectors; they’re worth every penny that they charge. Even my most experienced buyers use inspectors regularly. They’ve learned from others and past mistakes that it can save them thousands – if not tens of thousands of dollars down the road… Now that’s good to know. 🙂
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