Buying a new home can be a daunting process – downright scary for some. This is why finding the right agent to guide you through the process is key to a smooth, seamless experience. As a real estate agent, my job is to ensure this, so I’m going to let you in on a secret: There are roughly 10 major steps in the home buying process and here’s how I break it down.
1. Set The Ground Work – Meet with Your Realtor
Buying a home is a huge financial decision that requires a good amount of planning and organizing. I’ll meet with you to discuss your real estate goals, establish neighborhoods, types of homes, buying capacity and work out your list of ‘must haves’ and ‘don’t wants’. As an experienced Broker Associate & Realtor in the Rhode Island market, I have worked with many first-time homebuyers and navigated multiple scenarios to assist them in finding the best options and by laying the foundation for their new home search.
Seasoned homebuyers will also appreciate my approach, as I help them to understand new lending guidelines – how they affect your purchase – and new or changing opportunities in the current market.
By bringing a white glove team approach to your real estate plan – I incorporate, well seasoned professionals as part of your team. Everyone from the best mortgage lenders and real estate lawyers, to plumbers, contractors, painters and movers.
Unless you’re intending on making a cash purchase of your new home, the most vital part of your initial real estate plan is to enlist the guidance of a great mortgage lender.
Your mortgage lender will tell you how much buying power you have, by figuring out how much you can afford based on your income and expenditures and what your interest rate will be based on your current credit score. A good lender will also provide you with multiple scenarios based with different down payments, interest rates, taxes and insurance.
I have great Mortgage Lender referrals and I’m happy to share – Just shoot me an email at [email protected]
3. Viewing Homes
Now the most exciting part of the process: I will help to narrow your home search based on your needs and desired neighborhoods and schedule appointments to view homes. It’s a good idea to visit homes at various times of night and day, on weekends and weekdays, to get a feel for who lives there and what the activity level is like.
At this time, I may also send you a list of open houses so that you can discover them in tandem with our formal viewings.
Continue to use your own internet resources to enhance your property search, as well as your MLS subscriptions (If you don’t have one set up already, let me do this for you).
4. Offer to Purchase
When you find a home you love, it’s time to make an offer. While much attention is paid to a home’s asking price, a proposal to buy includes both the price and terms. Terms and contingencies are extremely important and should be reviewed carefully with your real estate agent to ensure that your offer is strong. Strategy is everything! I’ll assist you in this process of creating a strong offer and presenting that offer to the seller through their listing agent. While the main goal is to have your offer immediately accepted, negotiation is always at play. They may decide to counter – be prepared – or they may reject your offer.
5. Purchase and Sales
If your offer is accepted, your next step is to have me draft a purchase and sale agreement to 1) solidify the terms of your agreement, price and contingencies. 2) ensure your assets and offer is legally protected. At this point, I will or I’ll have you reach out and speak with a real estate lawyer to review your contract to review the P&S before it is executed (signed).
6. Home Inspection
By Rhode Island Law, you have ten days to conduct a home inspection, respond to and negotiate terms – if required. Your Inspection is a tool to ensure to you that you have as much information as possible about the home you are about to purchase.
Inspections include lead, radon, water quality (if on well water) and flow tests, and septic tank inspections. Structural inspections are particularly important. During the inspections, an inspector will determine if there are material physical defects and whether expensive repairs are likely to be required in the next few years. Inspections often require two or three hours, and buyers should always attend. This is an opportunity to examine the property’s mechanics and structure, ask questions and learn far more about the property than is possible with an informal walk-through.
7. Mortgage application
You have a signed P&S and a successful home inspection. Now is the time to formally obtain a mortgage from your lender. You’ll need to complete a written loan application and provide supporting documentation. Specific documents include recent pay stubs, rental checks and tax returns for the past two or three years if you are self-employed. During the pre-approval process, the loan officer will describe the type of paperwork required.This, intertwined with the underwriting process, can be the longest part of the home buying process and having the right lender is key to this part of the machine performing smoothly. Again, reach out to me for my referrals!
Underwriters make sure you have represented yourself and your finances truthfully, and that you haven’t made any false or misleading claims on your mortgage application. Their standards are higher than loan pre-qualification requirements. A major part of the underwriting process is the appraisal of your prospective home, to make sure its value matches the size of the loan you are requesting.
9. Closing and Title Attorney
You’ll need to select a closing and title attorney, if you haven’t already. The attorney will assemble all the required paperwork for your loan and purchase, ensure that the title is free and clear for you to purchase and host the closing where they will guide you through the legal paperwork.
In my opinion, choosing a lawyer from a sheet of paper that your lender provides you is akin to going to a restaurant and ordering from a menu in a different language – you never know what you’re going to get, and it probably won’t be good. If you’re working with me, you’ll probably already connected with a trusted attorney that has reviewed your P&S and has been able to vet all your legal questions.
On closing day, you’ll typically attend a final walk through that I’ll schedule for you. This is so you have a final opportunity to walk through the property to assure its condition has not changed since the purchase and sales agreement was signed.
Then bring your strong hand – the one that you’ve been exercising all week – to the closing with 2 forms of ID, a cashiers check for your down payment and a personal check for incidentals. After you’ve signed and met all the requirements, you’ll be presented with the keys to your new home!
Recommended Reading: Buying a Home in East Side of Providence