Step By Step Guide To Purchasing A Home, part 1

Purchasing a home is a significant life milestone that often combines excitement with the added piece of charting new territory, or at least less frequented territory if not totally new.  To help streamline the process and make it more manageable, we've broken down the key steps involved in buying a home. In Part 1 of this two-part blog series, we'll cover the first five steps that lead you from finding a realtor to opening escrow. These are essential initial phases that will set the foundation for your home buying journey.

Step 1: Find A Realtor

The journey to homeownership begins with finding a reputable realtor. Why is this the first step? Realtors play an integral role in your home-buying experience. They are there to help you find a property - both on and off market options; while providing valuable insights to the community, and home, you live in. Additionally, realtors create a strategic plan to help you through the home buying process based on what is most important to you in the short and long term. Realtors help put together the purchase agreement and negotiate for their clients in the offer process. Realtors act as fiduciaries to their client, meaning they  represent your best interests throughout the transaction. 

It is always Important to discuss  compensation in the beginning with your agent. While it is typical for a seller to cover all or a portion of their fee, it isn’t always the case. It is reasonable to ask what service you receive for the compensation you may have to pay. 

Step 2: Pre-Approval

Before you start shopping for homes, it's essential to know what amount you can afford. If you do not have the opportunity to purchase in all-cash, it is important to seek out financing. That's where pre-approvals come in. Meet with a couple different lenders to determine the maximum loan amount you're approved for, and most importantly, the amount you want to spend on a home. To do this, you'll need to provide preliminary financial documents like W-2s, pay stubs, bank statements, and tax returns. The lender will analyze your financial situation, credit score, and other factors to determine the loan amount you qualify for. This step helps you set a budget for your home search, making it easier to narrow down your options, while also giving you the confidence to make an offer when you find the right home.

Step 3: Find A Home

Now that you have a clear budget, it's time to communicate your wants and needs to your realtor. Be specific about your preferences for location, size, amenities, and any other criteria that are important to you. Your realtor will use this information to find homes that fit your current needs. They can also guide you on market conditions and help you make informed decisions about the properties you visit, and how to prepare a compelling offer on a home. 

Step 4: Make An Offer

Once you've found a home that meets your criteria, your realtor will assist you in preparing the contract and submitting the offer. This process involves negotiating with the seller and their agent to agree on the price, terms, and conditions of the sale. Your realtor's experience is invaluable here, as they will work to get your offer accepted while ensuring that it aligns with your best interests. Negotiations may include factors like the purchase price, closing date, inclusions or exclusions, and contingencies. 

Step 5: Open Escrow

After your offer is accepted, the next step is to open escrow. Escrow is a third-party intermediary that holds funds and documents until all the conditions of the sale are met. Your lender will work on getting your loan approved during this period, while your realtor manages and organizes the rest. Be prepared to read and sign numerous documents during this stage. These documents outline the terms of the sale and any legal obligations you have as a buyer.

In Part 2 of this blog series, we'll continue the journey from the inspection and appraisal to the final closing of escrow, making you an official homeowner. Stay tuned for more insights and guidance on your path to homeownership.