A Step by Step breakdown of the homebuying process

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Buying a house is an incredibly exciting event in everyone’s life.  Whether you’re buying for the first time, upgrading from your current home or down sizing; you’re marking an important start to a new phase of your life.  You’re finding the place that you’re going to call your home.  

The process of buying a home can be intimidating and overwhelming.  However, with the right team of real estate agent and mortgage professional it can be an easy and seamless process.  Educating yourself and knowing what to expect are the keys to any successful endeavor.  Buying a house is no different.  Here is a basic walkthrough for the homebuying process.  Of course there are always nuances and things that will be unique to your situation.  However, this outline will provide you with a simple starting point and understanding of the process.

Before you do anything in the process you want to get pre-approved with a solid mortgage broker or mortgage lender.  This person should review all of your documents and pull your credit report.  A solid pre-approval is the foundation of any successful home purchase. 

Finding a real estate agent is as important as the first step.  You want to find someone that you mesh well with.  You’ll be spending a lot of time with this person and they need to not only understand your goals but they need to be focused on what’s best for you.  Remember, you’re hiring them.  Make sure they’re a good fit for you. 

Your agent will most likely set up a search for home options with your specific criteria in mind.  You’ll check out houses online and then go see them in person.  Once you’ve found “the one” your agent will prepare a Purchase Agreement which serves as your Offer to the seller of the home.  If everything lines up and all parties can come to an agreement then you’re off to the races. 

Every accepted offer should involve a home inspection.  At this time you’ll hire a home inspector to review the home.  They’ll tell you what issues they see, what items may need maintenance or in some cases reveal a major problem with the home.  This part of the process is your opportunity to back out of the contract without any harm.  Sometimes it leads to re-negotiation of the terms or to have the seller make repairs.  This time is also a good time to explore testing for Radon, having the sewer line scoped for damage, having the water tested (if it’s a well system) and checking the septic system (if applicable). 

Somewhere in between getting your offer accepted and your home inspection you should contact your mortgage lender.  They’ll get the official loan application started.  The pre-approval is simply that.  It isn’t a formal application.  Once you’ve notified your lender that you’ve found a house they’ll make it all official. 

At this point, you’re satisfied with your inspection results.  The lender has started the loan application and they’re ready to order the appraisal.  This report is to verify that the purchase price of the house is supported by other sales in the area. 

The lender will receive what’s known as a Conditional Approval.  That means that they’ve approved the mortgage application but that additional items are required.  These items can vary based on your circumstances.  Generally they’ll include title work, homeowner’s insurance, appraisal in addition to any personal requests from you 

The magic words that make everyone happy.  This means that the lender has signed off on any additional documents that they needed and that your real estate agent can schedule a closing with all parties. 

Within a couple days of closing (sometimes the day of) you should perform one more walk through of the house.  This is to make sure that there hasn't been any damage to the home since you had it inspected. 

The day has finally arrived!  Your real estate agent will coordinate a time with all of the respective parties to meet and sign final real estate and loan documents.  You should have received a final dollar amount that you need to bring to closing (or in some cases wire to the title company).  All parties will meet and sign their respective docs.  When you walk away from the closing you’ll now be the new owner of a home. 

Timeline : Current lenders should be able to get to closing (from loan application) in 20-30 days.  However, the turn times may vary based on the lender. 

Costs : Costs will vary depending on the lender & home inspector that you hire.  Typical home inspections cost $325 - $400 without any additional testing.  Mortgage costs could range from $2,800 - $3,500.  These numbers are basic ideas.  The best source of this information will be to consult your real estate agent and mortgage lender.