Kat’s 10 Steps for Home Buying
1. Get pre-approved for a mortgage.
This is important to do right away for several reasons. One, you should only be looking at those houses within your price range. Two, you don’t want to fall in love with a home that you subsequently find out you cannot buy. Three, you need to know whether there are specific homes you should skip viewing because of the type of loan you will be getting. Finally, you should be ready to make an offer as soon as you see the right house – offers must be accompanied by a pre-approval.
2. Select a buyer’s agent.
You should select a buyer’s agent to represent and support you. Doing so means you will have a professional who has your back – they will be working just for you (unlike a listing agent who is working only for the seller). A buyer’s agent can advise you in all aspects of the home buying process and help you with market analysis, the inspection process, appraisal report, and more.
3. Shop for your new home.
Start off by thinking about your “must haves,” things such as location, number of bedrooms and bathrooms, school district, need for a garage or fenced-in-lawn or pool or whatever else is important to you. Weed out homes that simply don’t make the cut. Try to be as focused as possible – it will make the process much easier and less frustrating for you!
4. Make an offer and negotiate.
Offers are submitted in writing, and of course there are multiple forms and details that must be included. You’ll need to know how much your down-payment will be, the amount of your offer, whether you will require a seller’s concession, what closing date you want to request, whether you have any specific contingencies and more. Your real estate agent will prepare the offer and submit it on your behalf.
Once an offer is submitted to the seller, there are various responses you could get. The seller could accept your offer as written, could deny it with no further discussion, or could counter-offer. The last response is the most common. Once you have received a counter-offer the ball is in your court to respond the same way. Your agent will work with you to help you reach an offer than can be accepted by both the seller and you.
After you have an accepted offer, the next step is to conduct a home inspection. This is done for your information, so you’ll know what exactly you are buying and what the issues are. The inspector’s role is to observe and report all the issues to you, not to provide a “pass” or “fail.” As a result of the inspection, you might want to ask the seller to fix safety or construction issues, so there may be some additional negotiation as part of this process.
6. Sign the contract.
After the inspection is completed and any items are resolved, the seller’s attorney will draft up a contract and send it to your attorney. You’ll meet with the attorney and she will explain the documents to you. You’ll sign, and the contract will go back to the seller’s attorney for the seller’s signature.
7. Apply for your mortgage.
Once the contract is fully executed, it gets submitted to your mortgage company and the process to obtain a mortgage commitment begins in earnest. You’ll need to provide various documents and details. In order to keep the process on track, it’s important that everything is submitted as soon as you are able to do so.
8. Appraise the home.
As part of the mortgage process, the mortgage company will send an appraiser to view the home. His role is to determine the value of the home, using specifically defined analyses, and to determine whether there are any items that need to be addressed prior to provision of the funding. For example, an FHA loan might not allow funding for a home that does not have GFCI outlets in the bathrooms and kitchen. So the bank may decide that those need to be repaired prior to closing. There is usually a week or so between the actual appraisal and the time you’ll find out the results.
9. Obtain a Clear-to-Close.
Once the appraisal is completed, and you have submitted all your documents and your loan has been officially approved, the bank will provide a “Clear-to-Close.” This is the last step prior to scheduling the closing. In this area, the closing includes the seller, buyer, seller’s attorney, buyer’s attorney, bank attorney, title company and more. Please note in New York, the closing date (unless otherwise indicated in the contract) is “on or about” which means there is typically no requirement to close ON that date. Often, the closing could occur with a few weeks to a month before or after that date. This can be frustrating, but the main point is that time off of work should not be requested until the Clear-to-Close is completed and a date has been selected.
Before the closing, you and your real estate agent will conduct a final walkthrough of the property you are purchasing. This is usually done the day of, or day before, the closing. You’ll walk through and make sure everything is still there that was supposed to remain in the house, and that everything else is gone. You’ll test the appliances and the utilities, and you’ll make sure all agreed-to repairs were made. Then you’ll drive to the closing where you will sign a large pile of documents. This could take up to two hours to complete. At the end you will be provided with copies of documents, and your keys. Then you will jump up and down with glee with smiles plastered across your face (#10 is the best part!).
If you’d like to talk to me about the process, call me at 914-419-0270 or email me at firstname.lastname@example.org. I can help!