This is a very simplified outline of the process to buy a home. We tailor the experience to fit our clients’ specific needs, but this should be a good start to understanding the process. See the workflow sheet at the end for a more visual, less wordy reference.
Step 1: Find a Realtor.
Call me. If you’re local and in my wheelhouse, I’ll help you. If not, I’ll ask you a lot of questions, and then I’ll find a Realtor that can help you. If you’re working with me, during this meeting we will review the buyer brokerage agreement as well as the process I outline below. This is the time to ask questions and review the process from start to finish as well as make a plan to move forward. This does not mean “tomorrow we go shopping”. I have worked with clients for more than a year until they were ready for step 2 or 3. This is information gathering. Not action.
Step 2: Find a Lender
Your Realtor is a good source for lenders. They should have 2 or 3 they can recommend. If you belong to a credit union like USAA, Navy Fed, Delta, etc. check with them. I have access to Keller Mortgage and they’re fantastic. Any KW agent can set you up with them. Lenders and their products vary widely. ALWAYS talk to at least 3 lenders. This can be informational, or actionable. If you’re not ready, or not sure if you’re ready, a lender can help with that. They can give suggestions on ways to improve your credit and therefore your interest rate, or counsel you on job/tax issues that may need to be addressed. Once the lender sends you a “pre-approval” letter you’re ready to get serious. Not a Pre-qual. Pre-approval. They can explain the difference.
Step 3: Look at homes
This starts with a comprehensive Q&A session about your needs and wants. We will send new listings to you as they become available and set aside time to either show them to you or tour them on your behalf. (pro tip - when looking on your own - set a max price you’d ever pay for a home and do not, for any reason, look higher than that. Not even “just for fun”. It’s not fun. Trust me.
Step 4: Make an Offer(s)
Once the dream property is found, we will discuss with you the market comps and your offer strategy and write up an offer. We will review the offer with you in its entirety, answering all questions. Once satisfied, we send this offer to the seller. This is an opening move, not the final move. The seller can accept, negotiate, or refuse.
Step 5: Under Contract begin Due Diligence Period
Congrats! You won the contract! Welcome to your due diligence period. This is your time to do any and all investigations on the property you can think of. Drive the neighborhood, test the commute, visit the local schools, groceries, etc.
Step 6: Home Inspection
I strongly encourage all of my clients to have a home inspection, whether its new construction or a resale. The inspection needs to be completed before the due diligence period ends. Address whatever concerns come up in the inspection if possible. You can ask the seller to repair, lower the price, or contribute to closings costs. If there are problems with the inspection and you can’t come to an agreement, then you can terminate your contract and go back to looking at homes.
Step 7: Appraisal
Depending on who your lender is, the appraisal can be done before, during, or after the due diligence period. This is when the lender sends their own expert out to review the property, confirm it is in finance-able condition, and determine it’s value. The bank will not lend more than the appraiser believes the property is worth. So if the appraiser deems the property to be worth less than the contracted sales price, it is up to the seller and the buyer to come to an agreement that satisfies both parties. If they cannot agree, the buyer has the option to terminate the contract and go back to looking at homes.
Steps 8: Closing.
Both the hardest and easiest step. All of the other hurdles are out of the way, and usually, this is the time where the bank is doing its paperwork, and the attorneys are doing their paperwork and it’s just a matter of waiting. Waiting is hard. Sometimes there are requests for additional documentation from buyers or sellers, but usually, we are all just waiting. The actual closing day is easy, aside from the fact that you will sign your name 100 times, and an attorney will explain the same thing to you 20 different ways.
Step 9: Referrals
This is a business of contacts, we have people to help you move, clean, repair, upgrade, secure, etc. If you need someone now or in the future, call us. It’s what we do. Hopefully, we gave you great service, and you were happy with us. We will ask you to write a testimonial, record a video, or leave a review on our website, and also refer us to your family and friends.
How long does all this take?
It usually takes my clients 1-4 weeks of looking to find they home they want. Once you find the home you want, allow for about 30 days from the date of offer to the closing date. New construction is the exception, it can take much longer to build a home.