The Steps Involved To Buy A Home For A First Time Home Buyer

Buying a home is a lengthy process requiring coordination from all parties involved such as the buyers, sellers, Realtors, home inspectors, mortgage brokers, title companies, attorneys/lawyers, appraisers, etc. If you are a first time home buyer and are confused or curious what is typically involved to purchase a home, read on. Disclaimer: laws, regulations and customs vary from state to state and country to country, but in general all real estate transactions follow a similar protocol.

Beginning steps involved toward buying a home

• Finding a property
• Getting pre-qualified for a mortgage
• Submitting an offer
• Negotiating and getting an accepted offer

The first steps to buying a home are mostly common sense; You start off by either finding yourself a Realtor, or doing the searching on your own (though as a buyer, it is in your best interest to use a Realtor, as you are not responsible for paying his commission and only will benefit from his/her efforts to find you your dream home.). This usually involves figuring out what you need and want in a home, where you want to live, etc.

At the same time as you are searching, you search be getting in contact with either a bank or a mortgage broker so they can pre-qualify you for a mortgage. You will also be given a run down of what your monthly housing payments if you ask. This is a crucial thing to do early on, so you know how high of a mortgage you can roughly qualify for, how much you are comfortable paying per month, and in some cases sellers like to see a pre-qualification letter to know a buyer is serious and able to purchase their home. If you are purchasing without financing you can skip this step.

Once you have done your searching and found an available property for sale that you have interest in purchasing, you move on to the step of submitting an offer (this is where having a Realtor by your side is a huge help as they can help you with negotiations, estimating market value, and understanding contract details). From here your offer will either be rejected, counter, or accepted. If the offer is rejected, this means the seller is not interested in your offer, but if your offer is countered, it means the seller wishes to conduct business with you, but on different terms. Negotiations will continue until both parties have an agreed upon offer, and both parties have signed off on a legally binding contract to sell the home.

Middle steps involved toward buying a home

• Home inspections
• Appraisals
• Title searches/work
• Mortgage approval

The first thing you want to do after you have an accepted and executed contract between you and the seller is have a home inspection done by a professional home inspector. In some cases (such as auctioned houses), sellers require you to do home inspections before the contract is accepted by both parties, but typically inspections take place after the offer is accepted. If the home inspection does not go well, or you find problems with the home, depending on what your contract states you may or may not be able to back out, or you may or may not be able to re-negotiate regarding repairs and other problem areas. Most Realtors use standard contracts which are designed to protect the buyer from such situations, so typically if you receive bad results from the home inspection, you are able to re-negotiate or back out from the deal. If you do re-negotiate, or if you are happy with the inspection results, then you proceed to the next step.

Shortly after, you’re going to get bombarded by papers to sign and documents to present to whoever is handling your mortgage. They will begin to work on getting you approved for your mortgage, and also send out an appraiser to estimate the worth of the home, so as to make sure they aren’t lending you money for a piece of property worth less than the mortgage. You will be given a good faith estimate from whoever is handling your mortgage, which is a rough glance at your monthly payments, mortgage rate, closing costs, and other such things. Simultaneously, the title company/agent working the deal will be doing his job to ensure there are defects on the title, ensuring it is a marketable property and that the transaction will go over smoothly.

Final steps involved toward buying a home

• Final walk through
• “Closing” the real estate transaction

Most contracts include a “final walk through” where the buyer has the option to quickly view the property again to make sure everything is in the same condition as it was when the initial offer was accepted by both parties. This includes structural condition as well as fixed items and appliances that were included in the deal. Then it’s off to “closing”, where both parties officially complete the transaction. The property is transferred to the buyer, the seller is given whatever money he/she is due, and tons of paperwork is signed off on.