Buying a home is tricky. Whether you're looking to go through the home buying process by yourself or whether you're just curious about what your real estate agent, mortgage lender, and title company may be doing behind the scenes, we've put together a complete step-by-step guide to the home buying process.
We've broken this down into a few parts:
As always, we're just an email away at team@usebramble.com. If you have any questions about any of these steps, don't hesitate to shoot us a note!
Step number one is to figure out how much house you can afford. Unless you're paying in all cash (if so, good for you! Skip this section.), you'll be getting a mortgage loan from a lender. This will involve collecting your financial information, shopping around a few lenders in your area, and figuring out what type of mortgage loan you'll want to get (more on that here).
Once you're pre-approved, you'll be able to show potential sellers your pre-approval letter. This de-risks the transaction and makes you a more attractive buyer.
Location, location, location. Get familiar with the neighborhoods in your market so that you know where to look. Good real estate agents can be helpful if you’re unfamiliar with the area, and there are also numerous helpful resources online. As a pro tip, if your city has a subreddit then the subreddit will often contain valuable insights from real residents of each neighborhood.
Determine what location-related criteria are most important to you and your family and use Zillow, Trulia, or similar listing sites to find good locations. Some common considerations are school, transit, commute accessibility, safety, and proximity to commercial areas for food and entertainment.
You likely have an idea of what you do or do not want in a home. Put those in writing and make a list. This will also help you determine if you have non-negotiable criteria: Perhaps you need at least two bedrooms for your family, or perhaps you're deadset on having a big front yard. This list will help you speed up your search by filtering out options that don't fit.
There's a lot more you can do here, so check out our guide on Preparing Like a Serious Homebuyer for more!
Once you're nice and prepped, let's get serious on scoping out realistic options and investing the time in seeing each one in person. Once upon a time, listings existed almost exclusively on Multiple Listing Systems (MLS) that were distributed to each Realtor in an area. Today, tools like Zillow, Realtor.com, Redfin, and others import data from each state's MLS so all of those postings are viewable online. You can even browse the MLS system directly at MLS.com.
Use filters to help narrow down the search and stay within your budget. You should be able to filter by your non-negotiable criteria and price range to speed things up.
Time for the best part! Once you've settled on a list of houses to visit, start contacting them and setting up viewings. Your options:
Set up alerts or email digests to be notified of new listings that fit your buying criteria. Most sites allow you to set up alerts for any searches you make, so you can stay up to date on the newest homes that become available.
So you've found the one (hopefully). Now it's time to make an offer on that home.
First, figure out how much you want to pay. Look at similar properties in the area and how much they sold for. You'll also want to consider broader market conditions such as the current transaction volume, average time of properties on the market, and how many homes have sold recently. We've compiled a more detailed walkthrough on how to price your offer here.
In order to create an attractive offer, you will need to convey that you are serious about the purchase, that you are a safe and reliable buyer, and that you will be able to handle the details of the transaction reasonably. Do this by including proof that you are pre-approved for your mortgage, and by including an offer of earnest money.
There are many more components to the offer to consider. See our full walkthrough for a step-by-step guide.
Each state will have different rules about what is required in a real estate purchase offer. The National Association of Realtors' state-level branches will have a standard form you can download and fill out with the details of your offer.
Most of the time, you can simply email the completed paperwork to the listing agent as an official offer, but some listing agents may prefer you to submit an offer through an automated system or form. Follow any instructions on the property listing, or contact the listing party.
If you're not working with a buyer agent, it's at this point that you'll need to specify your intent to complete the transaction "unrepresented" or "representing yourself". The listing agent may make an offer of "dual representation", which means that they will represent both you and the buyer simultaneously. Dual representation can be problematic because of the conflict of interest between you and the listing agent (whose incentives are almost entirely aligned with the home seller regardless of if they're representing you or not). The NAR discourages dual representation, and many listing agents will outright refuse to do it.
If your offer is declined, you have the option of negotiating and eventually issue a follow-up offer. The key is to gather some information about why the offer was declined, and then figure out whether you can improve upon those areas. You can try sending an updated offer after attempting to make it more compelling. Ask the listing agent for info on whether there are other offers and what they look like (cash only, faster closing times, etc.) to inform your updated offer. See here for a list of common modifications that may make a follow-up offer or counteroffer more attractive to the selling party.
Say your offer is accepted. What now?
You should have a purchase agreement signed with the seller which will detail a list of things that need to happen in order to complete the transaction. This will generally include:
There's a lot to be done in this part, but your title company and/or mortgage lender should be able to walk you through most of it. We've laid out how each of these parts work here.
You may consider hiring a real estate attorney during this part of the process, which will usually involve a flat fee of $500-$1,500. An attorney can be particularly valuable for properties with trickier paperwork, such as an older home with a larger number of disclosures. Conversely, if the property is a new construction, you may not have much for an attorney to look at at all and can navigate the paperwork yourself. In some states, an attorney may be required by law to finalize the documents.
On closing day, you'll be providing all of the proof that each item in the purchase agreement is complete and ready to go. You'll then sign a (probably fairly large) stack of documents, and provide the final payment for closing costs and mortgage down payment.
Finally, once everything is signed and paid for, you'll get your keys. And that's it! You're done!
The home purchasing process is complex, but with a bit of upfront knowledge and education it is a process that can be learned and completed successfully by just about anyone.
We at Bramble are dedicated to helping homeowners who've decided to take charge of their home buying process. Take a look through the rest of our guides on the home buying process, and send us a note at team@usebramble.com if you have any questions. We'll be happy to help out!
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