Step 1: Engage a Broker
Always the first step as far as getting started in your home buying process is finding a broker. As a personal tip from me, you want to pick someone that you trust and that is experienced with your wants and needs.
“It takes 45-75 or more days to buy a property”
-Real Estate Agent Tom Campone
Step 2: Pre-Approval (3-5 Days)
More specifically, the first step in the home buying process is working with a lender to get a pre-approval. To get pre-approved you will provide all your financial statements to a lender. Once reviewed they will give you a pre-approval letter with the amount of the loan you qualify for. The pre-approval process is important because we will need to include this letter with the offer.
Step 3: View Properties (1-21 Days)
This is the fun part of the process. We get to start shopping! Before we go shopping we will use an online search as a first showing. You will probably review 100-200 properties depending on how well you've defined your criteria. Out of that group of properties our goal is to narrow that down to 6-10 properties. Once we have the list narrowed down to 6-10 we will schedule a day to go out and see all of the units. If we see all the units back to back it will give you a great comparison of the inventory available throughout your budget. Inevitably there is 1 or 2 units that stand out from this group.
Step 3: Write an Offer (1 Day)
Once we've found the property for you it's time to write an offer. Before we write the offer I will put together a detailed analysis of the property and I will give you my opinion of the price. The analysis will also include the market information of how much inventory is on the market and absorption rate. This will give us a wholistic view of the market and we can start to strategize on how to get you the best price for the unit.
Step 4: Negotiate (1-2 Days)
This is where the rubber hits the road. If we've done our job analyzing the property we can feel confident in our offer and our negotiating position. I negotiate like it's my money so if I can get you another $500 or $1,000 in the transaction I will tell you and we will go after it for you.
Inspection (3-5 Days)
Once we have agreed on the terms of the transaction we will hire an inspector. The inspectors job is to find problems so don't be surprised when they do. Once the inspection is complete they will send you a detailed report with their findings. It's important that you attend the inspection as the inspection items can seem a little scary unless you are there to ask questions and talk with the inspector. I recently had an inspection where there were some electrical issues. If the client was not there to hear that it is an hour fix with an electrician it could have become a larger issue.
Step 5: Attorney Review (3-15 Days)
After the inspection has been completed we will regroup with your attorney to discuss closing cost credits or repairs for anything that was found during the inspection. For anything of substance (electrical items, etc) I suggest getting a credit and having the repairs completed yourself. For minor items, you can request that the owner complete the repairs.
Step 6: Underwriting of Loan (14-35 Days)
Once we pass attorney review you will post the remainder of earnest money and wrap up the last items for the lender. At this point you are committed to the purchase of this property.
Clear to Close
About a week prior to closing you will receive the clear to close from your lender. This means your loan has been officially approved. Remember not to open any new credit lines or make any large purchases until 3 days after closing as this could affect your debt to income ratio and could cause to you no longer be approved. Mortgage companies check all of these ratios the day before a closing to make sure everything is the same as underwriting.
