Buying a home requires a lot of time and effort. It is essential that you do a good amount of research during all the stages of the home buying process. A plethora of information is available online, that will help answer a lot of your questions and enable you to make informed decisions.
Here is a bird's eye view of the entire home buying process, from the buyer's perspective.
- Count your pennies - How much down payment and monthly mortgage payment can you afford?
- Check your credit score - The lender may reject your mortgage application if you have poor credit history. The interest rate on your mortgage depends on your credit score.
- Get preapproved for a mortgage - The lender will ask you a few questions about your finances and tell you how much house you can afford. A pre-qualified buyer is deemed more serious about home buying than someone who is not.
- Make a schedule - How much time do you have to move in your new home? This will help you to plan your moves.
- Make your wishlist - Separate the must have and nice to have things. You may not always get everything you wish for. (I hear ya! "If wishes were houses..." )
- House hunting - Decide on areas/neighbourhoods where you would like to buy a home. Find out homes in that area online, or find a real-estate agent who is familiar with that area.
- Shortlist your top choices - Be prepared to Make multiple offers (not at the same time, though!) instead of setting your eyes on the single home that is topmost on your list. It will give you the power to negotiate.
- Making an offer - Some paper work here. Offer is made in writing and presented along with the escrow check. This is the first check you write towards your home.
- Offer is accepted - After few rounds of negotiation, your offer may be accepted. Contract is signed by both the parties. The property is under contract.
- Attorney review period starts - Find a real estate attorney. The attorney will review the Terms & Conditions of the contract for you and ensure you get a clear title to the property.
- Inspection - Hire a professional home inspector to inspect the house thoroughly. The inspection needs to be completed in the attorney review period.
- Attorney review period ends - Final Terms & Conditions of the contract are agreed upon by both parties. The seller may give credit to buyer, based on findings during the inspection or attorney review.
- Mortgage Application - The lender will ask you to submit the accepted offer along with some other documents.
- Appraisal - The lender will conduct an appraisal of the property to make sure that it is worth the amount you are borrowing.
- Closing prepearation - After the lender finds everything in order, the lender arranges for closing. Prepare a cashier's check for the down payment.
- Final walk-through - Inspect the house again, before you go for the closing. Make sure the items that the seller agreed to fix after the inspection, are in order.
- Closing - Ownership of the property is transfered to the buyer. Several documents are signed.
- Here are the keys - Seller hands over the keys. Great. If you are renovating the house, it's not the time for celebration yet. This is just the beginning!