Buying a home can be incredibly exciting. People often save for years so that they can make down payments and begin looking into properties well before they intend to buy. As a result, most future homeowners understand what it takes to find the right property, at least in broad strokes. This article will focus instead on the latter part of the process and describe what’s involved in actually buying a home.
Get Preapproved for a Mortgage
Before performing a title search, scheduling a home inspection, or making an offer on a house, interested buyers should always seek mortgage pre-approval. Not only will they have a better idea of how much they can expect to afford, which makes it easier to narrow down properties, but preapproved buyers also have an easier time closing deals.
Make an Offer
Already know which house to buy and how much it will cost? The next step is to make an offer. Real estate agents often prove invaluable during this stage, offering information about the sellers, comparable properties and prices, and what to expect during each stage of the home-buying process. Skilled agents can also help buyers navigate the sometimes complex world of negotiations and counteroffers.
Get a Mortgage
Home buyers can either get a mortgage through the lender that offered preapproval or start the process fresh. Either way, expect a paperwork-heavy process that involves providing:
- W-2s or 1099s
- Pay stubs
- Income tax returns
- Bank statements
- Details on long-term debts
- Valid government-issued ID
- Social Security number
After completing the application, it will be underwritten by the lender. At this point, the lender will also seek information about the property.
Sign Up for Homeowners Insurance
Lenders typically require borrowers to secure homeowners insurance before the closing date. Buyers will need sufficient coverage to fully replace the home and should make sure the policy goes into effect on the closing date.
Schedule a Home Inspection
Most offers on homes come with contingencies like home inspections. This process can help buyers identify potential problems and, in some cases, may offer valuable information that makes it possible to negotiate with the seller regarding problems not included in the disclosures. If there are particular issues that seem likely to come up, such as the presence of mold or asbestos, hire a specialist to perform the inspection.
Get the Home Appraised
Home appraisals are separate from inspections. An appraisal looks at the home being purchased and comparable, recently sold properties to determine a fair market value. Lenders typically choose appraisers, but buyers pay them.
Close the Deal
Some homeowners try to get in last-minute negotiations with sellers following inspections and appraisals, but most move on at this point to the last step in the buying process: closing the deal. On closing day, expect to perform a final walk-through before meeting with the seller, the real estate agent, and, if applicable, a lawyer. After that, all there is left to do is to sign the documents and transfer the property’s title, so don’t be afraid to start planning a housewarming party.
