Buying your first home can seem daunting. It is one of the most stressful things a person will do in their lifetime. Here's a complete rundown of the steps of the home buying process so you can begin your home search with confidence.
1. Get Pre-Approved
Mortgage pre-approval identifies possible financial challenges standing between you and getting a mortgage. It also clarifies your price range and legitimizes you to realtors and sellers. This will help you understand what kind of home you qualify for and what you can actually afford. More times than not, when you get pre-approved, you will be approved well above the amount of what you can actually afford in a mortgage. Make sure you talk to your lender about your financial situation and they can help you understand what kind of price range you should be looking at when you go to buy your home.
2. Get a Buyer's Agent
They are free! Buyer's agents are paid by the seller. Find an agent whose personality, experience, knowledge and demeanor fit your expectations. Work with your agent to list your "must haves" in terms of your ideal home, neighborhood and community. Also make sure you tell them what you don’t want. They will then take you out to several different homes that are like the neighborhoods and homes that you described. Once you find something you like, have your agent draw up the paper work for you to make an offer on that particular piece of property to the selling agent.
3. Look at Listings
Your agent will send you listings from the Multiple Listing Service (MLS) based on your price range and must-haves. There are many different listings that you can look at online and in the classified of your local newspapers. Do your homework on these properties then send them to your realtor and tell them you would like to look at these properties.
4. Visit Houses
Your agent will schedule showings of your favorite MLS listings. This is the fun part! Any home you visit could be "the one"!
5. Make an Offer
When you find "the one," have your agent write an offer. Trust your agent and make a reasonable offer. Include your pre-approval letter to let the seller know you're qualified.
6. Earnest Money
When your offer's accepted, you'll need to present earnest money. This is normally 1% of the purchase price. It seals the deal and is ultimately credited toward your closing costs.
As soon as earnest money's exchanged, take your purchase agreement to your bank to start the official loan process, which can take 30+ days.
8. Home Inspections
Hire a professional home inspector to inspect every physical aspect of the home immediately. Defects should be addressed prior to closing. No house is perfect. Sellers need time to make repairs.
9. Final Walk-through
Before closing, walk through the property with your agent to confirm repairs were made and that the house is in acceptable condition for you to take possession.
At the closing, read what you're signing. Don't be rushed. Plan on this taking an hour. You must present I.D. at the closing, and pay your down payment and closing costs with certified funds. Get the exact amount ahead of time either from your agent.
11. Get the Keys
Not only from the seller but also the listing realtor!
12. File Your Property Tax Exemptions
Ask the closer exactly what paperwork you need, and when and where to file it.
If properly planned for, the home buying process can be a most rewarding experience. Now that you're armed with an understanding of the entire process, happy house hunting!
About the Author: Lizzie Weakley is a freelance writer from Columbus, Ohio. She went to college at The Ohio State University where she studied communications. In her free time, she enjoys the outdoors and long walks in the park with her 3-year-old husky Snowball. The information in this article is credited to SettlementOne.