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Home Buying Order of Events
When
buying
a home it's easy to get excited about a home listed
for sale. Prospective buyers often call the number
on the yard sign or email the listing agent, schedule
a viewing of the property, and find themselves midway
into the home buying process without knowing quite
how they got there. Follow the home buying order of
events listed below for a smooth process, and to find
a home that's right for you.
Step 1: Get Preapproved for a mortgage.
Find out what you're preapproved to borrow before you start looking at listings so you can have a good idea of the price range of homes you can look in. Having a pre-approval letter from a mortgage company when you make an offer will help show the sellers that you are a serious buyer and will be able to qualify for financing if they accept your offer. This also gives you the opportunity to get to work correcting any mistakes on your credit report or gathering required documentation - both of which may be revealed during the pre-approval process. Waiting until you are under contract to address these items could be expensive, stressful, and possibly even cost you the deal.
Step 2: Determine your budget.
Use the amount you are preapproved to borrow as the high point when figuring out what price range to shop in, but it is likely you'll end up shooting for a number much lower. What the mortgage lender will approve is not the same as what you can afford. Take a realistic look at your budget, income, and savings and come up with what you can afford in a monthly mortgage payment. Keep in mind you will also have to pay taxes and insurance on the property, and that it's smart for home owners to set aside additional savings as a home repair emergency fund.
Step 3: Interview real estate agents.
Don't just go with the agent you met at an open house or the listing agent on a home you like. Meet with a few well-respected buyers agents in your area to find one that you feel will do a great job for you. Ask questions about their negotiating style, how many properties they generally show a client, and what times they are available for showings.
Step 4: Go find your home.
Once you've selected a real estate agent it's time to start what many people think of as the beginning of the process - looking at available homes for sale. Think through which aspects of a new home are most important to you and share this list of priorities with your agent. Once you've found the right home at the right price it's time to make an offer!
You will work closely with your real estate agent and mortgage originator through
the rest of the process which includes negotiating
and executing the purchase contract, arranging the
mortgage loan, having the property inspected (and
repaired if applicable), and closing the deal.
Contact the various lenders and brokers list the survey
below to find out about current
mortgage rates and home
financing information.
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