18 Steps to Buying a House

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18 STEPS TO Steps to Buying a House

Procuring a home can seem like an arduous process – and I don’t want to lie: Perhaps it can be overwhelming and difficult, based on the complexity of your circumstance.

18 Steps to Buying a House

STEP #1: GET A BUYER’S AGENT

Maybe it’s your next door neighbor who happens to be a real estate agent. Perhaps it’s your cousin Steve. Either way, your buyer’s agent should be knowledgeable about the steps to buying a home, because they will represent you and have a fiduciary responsibility to take care of your best interests.

Don’t feel rushed to go with the first agent you find. Interview several potential agents, research them – and perform due diligence by getting all the personally recommended agents you can find.

STEP #2: GO THROUGH THE PRE-QUALIFICATION/PRE-APPROVAL PROCESS

Get your free credit report online and try to fix mistakes. Also check out various mortgage brokers and compare their interest rates to your own bank’s rates or your credit union.Get a pre-approval letter from your lender, a letter that means they’ll verify your income and get your credit report.

Find out the maximum loan amount you can get approved for in order to determine the range of houses eligible to you, but don’t feel obligated to buy a home you can’t afford.

STEP #3: CHECK OUT THE HOMES FOR SALE ON THE MARKET

Have your agent provide you with a suitable list of homes thatyou desire, and request the “comps” of comparable sales in the area where you want to live.

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STEP #4: MAKE AN OFFER ON THE HOME YOU LOVE

Once you find a home you’d truly like to purchase, take the next step by having your agent write up an offer on the home. If there are many offers on the same home, realize that other buyers may swoop in and buy the home.If your purchase offer is rejected, find out why from your real estate agent. (It may have been due to a lowball offer or too many contingencies.)

STEP#5: MAKE COUNTER OFFERS AND NEGOTIATE

During the negotiation process, anticipate a bit of back and forth over the purchase price – that is, if your offer is still in play and it’s not a popular house in a hot region. Lean on expert advice to figure out the ideal offer price for your situation at hand, and explain any personal situations that might help the seller bend in your favor.

STEP #6: PUT DOWN SOME “SERIOUS” EARNEST MONEY

Once your offer is accepted, show you’re serious about moving forward with the deal by depositing your earnest money with the correct party, but don’t ever write your check directly payable to the seller.Make sure your offer has contingencies that allow for your earnest money to be returned to you if you need to cancel the offer for any reason.

STEP #7: OPEN THE ESCROW AND ORDER THE TITLE

Next, the agent should open escrow and title – either yours or the listing agent. Get the name of the escrow officer, as well as their phone number and escrow file number so that you can pass the info along to both your lender and your insurance agent.

STEP #8: ORDER YOUR APPRAISAL OF THE HOME

Pay for the appraisal, get an advance copy of the document, and consult your agent and lender if the appraisal comes in lower than expected.

STEP #9: FOLLOW ALL THE LENDER’S REQUIREMENTS

Provide your lender with whatever additional requests for information that arise. Make sure to steer clear of mistakes while you’re in escrow, such as changing your financial situation.

STEP #10: READ, QUESTION AND APPROVE OF APPROPRIATE SELLER DISCLOSURES

Make sure to study all disclosures and documents you receive with a trained eye and go over them with a fine tooth comb to ensure you understand what you’re buying. If there’s a lead paint health hazard, you have 10 days to cancel the deal.

STEP #11: GET YOUR HOMEOWNER’S INSURANCE POLICY

As your first order of business, make sure to order your homeowner’s insurance right away, because there are times that the previous owner has submitted claims that could make it hard to get insurance, so get your replacement coverage ASAP.

STEP #12: GET A GREAT HOME INSPECTION DONE

Bring on board a quality home inspector you can trust, and take a checklist with you– because you definitely want to accompany them at the home inspection.

STEP #13: ASK FOR REASONABLE REPAIRS AS NEEDED

During your home inspection, certain issues might be uncovered that you feel you’d like the seller to have repaired – or issue you a credit for them. Most homes have a variety of issues that the inspector could list – so don’t go crazy with the repair requests and risk blowing the deal.

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STEP #14: REMOVE YOUR LOAN CONTINGENCY

Once your loan is solid and locked in, and the appraisal is to your satisfaction, you can remove your loan contingency. For certain states, this might be a short period of 17 days. If you don’t remove the contingencies, it could be a bad thing, because the seller could take your deposit and issue requests to perform while cancelling the contract.

STEP #15: TAKE ONE LAST LOOK

Make sure you perform a final walk-through to ensure the home is in the condition that it was when you said you’d buy the property. That way, any serious concerns can be dealt with before closing.

STEP #16: SIGN THE LOAN AND ESCROW DOCUMENTS

Bring your driver’s license, because in some locales,you’ll sign escrow documents right after opening escrow, while in other places it will occur while you’re signing your loan documents near closing.

STEP #17: PAY UP!

Either have your bank perform a wire for funding the escrow, or get a certified check payable to escrow.

STEP #18: CLOSE ESCROW AND CELEBRATE…AND CHANGE THE LOCKS

Major documents will be recorded in the public records, and you’ll be notified when the title records.Once that is all done, the home is yours. Now call a locksmith and get those locks changed, just for safety’s sake.

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18 Steps to Buying a House
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