The Process of Buying a Home
Thomas Mayhew
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Thomas Mayhew
Innovative Real Estate Professional | Tech-Savvy Strategist | Board-Ready Leader | Power MBA Graduate
- Talk to Realtor to gain knowledge that is not otherwise easily attainable and to ensure you’ve got a great agent to work with.
- Get a Referral to Three Lenders. Why three? Three is not a magical number, but it is the minimum that the state believes is reasonable for me to share with you so you can get a good selection of lenders to choose from.
- Submit Documentation to the Lender, typically consisting of your last two years of tax returns, w-2’s, etc. Then once they’ve reviewed your numbers and situation, they will issue a pre-approval letter (if your numbers check out).
- Go home shopping. The first step in the home search process is really to eliminate the homes that will not work for you — simply to save time and energy. If you don’t do this, it will take the fun out of the process. If you do this properly, you will probably narrow your search down to four properties and choose one that works beautifully for you. However, sometimes what you think you want and what you really want are two different things, so we need to be willing to adjust our search if we don’t find anything on the first outing.
- Write an Offer on a Home. The seller responds with an acceptance of your offer or a counteroffer. Once we get a satisfactory agreement for all parties and all parties have signed, we have what is called “mutual acceptance”, meaning that we “have a deal” (under contract).
- Hire a General House Inspector to Inspect the Home. Upon receipt of the home inspection report, we write an inspection response to the seller asking the seller to remedy health, safety, or ‘surprise’ items. Once that inspection response is agreeably negotiated, we proceed to the next phase.
- Order the Appraisal. Some lenders will call the appraiser right away, while others will wait until after the inspection response is successfully negotiated. There are pluses and minuses to each path. Once the appraiser values the property and the underwriter reviews it, if there are no issues, we proceed to the next step.
- Complete Underwriting. Keep in mind that both the house and you as the borrower are being underwritten by the bank (assuming you are getting a loan). So they might ask you for documents all the way up to closing. And they will verify employment right before closing.
- Acknowledge Closing Disclosure. Once final underwriting is complete, the lender sends you a Closing Disclosure which will provide you the opportunity to review the terms of the loan and if that all looks right, you need to acknowledge that you are ‘okay’ with it. That starts a three-day clock ticking down to the first day that you could sign closing documents at the escrow company for the purchase of the home.
- Sign for Closing and Receive Keys. Then the lender sends the information that escrow needs to draw up the closing documents for signing and they schedule you to come in to sign. Typically, you will receive keys within 24 hours of signing. Congratulations, this is when you become a bona fide home owner! :-)