5 Important Steps When Buying A Home
Posted on: 28 September 2021
If you want to buy a single family home, you need to understand what will happen when you find a home that you like. This will allow you to act promptly and secure a home that you want to rent.
Step #1: Make an Offer
When you find a home that you want to purchase, you will have to make a formal written offer. If the market is moving quickly in your area, you will want to work closely with your real estate agent to put together an offer.
When putting together an offer, you will want to run your own comparative marketing analysis to figure out the value of the home and what price you should offer to pay for it, with room for negotiations.
In the offer, you will want to disclose any earnest money you are willing to put down to show that you are serious about the purchase of the home. Earnest money is essentially a non-refundable deposit that you will lose if you back out of the home purchase and can go towards your down payment if you go through with the purchase.
You can also add contingencies to the agreement, such as an appraiser. The closing date should be stated as well, and you should ask about any disclosures.
Step #2: Getting an Inspection
Most buyers, as part of the offer, request an inspection as a contingency on the offer. That means that if you don't like what is discovered during the inspection, then you can back out of the offer without any financial consequences or legal consequences.
You are going to want to have already a list of potential home inspectors to call. Generally, you will want to get the home inspection done quickly after your offer is accepted. If issues are found, you can back out or reopen negotiations on the contract. It is common to ask for things to be fixed that are discovered during the inspection or to ask for a discount on the price so you can fix the issues on your own.
Step #3: Secure Financing
You are going to need to secure financing for the home. You should already be preapproved for a loan. Then, you will need to put in a formal loan application, and the bank is going to have someone appraise the home, and review your credentials, to determine if they want to give you the loan. This process can take days or weeks.
Step #4: Getting Homeowner's Insurance
You will need to get a new homeowner's insurance policy for the home. Generally, you need proof of the insurance policy to close the sale. It is common to get a policy, and have it paid, through the escrow you establish with your lender.
Step #5: Closing
Finally, you are going to have the closing. During the closing, you should always do a final walkthrough of the home. This is your last chance to check and see if the home is in the same condition on the day you initially viewed it. Then, you will need to sign paperwork with the title company and finalize the money transfer for the sale; and the home is yours, and you will get the keys.
These are the basic steps you will need to take to purchase a home. Talk to your real estate agent to further understand what is involved in the process of buying a home.
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