Home Buying Checklist

Today marks the start of the busy season in Real Estate. School is out for summer and families are shopping for their next home to buy or lease before fall classes start. Sellers are also taking advantage of the increase in buyer demand during this season and listing their home, either for the financial opportunity or because they also need a new home. During this period, there is an increase in supply and demand, and with these increases comes more competition. It is more important than ever to hire a REALTOR® and be prepared. Here is an easy to follow step by step home buying checklist!

1. Get Pre-Approved

Being pre-approved is a critical part of the home buying process and should be done before anything else. A pre-approval letter is required to be submitted with an offer for purchase, and it provides you with a realistic purchase amount. Many people start looking at homes before they’re pre-approved, and they’re heartbroken when they discover they can’t afford their dream home. Your REALTOR® (me) has several great lenders to recommend when you are ready to get pre-approved.

2. Start Looking at Homes

Based upon your budget and your criteria, your REALTOR® will put together a customized list of properties that meet your needs. They will arrange showings for you to view your favorite homes in person. Don’t forget to give them enough time to coordinate these showings between the listing agent and the seller, though!

3. Narrow it Down

Pick your top 2-3 homes for us to take a second look at, assuming these houses aren’t already in a multiple offer situation. Choose a favorite to make an offer on, and keep in mind a back-up just in case your number one choice doesn’t work out.

4. Research Comparable Data

Your REALTOR® will prepare a Comparative Market Analysis (CMA) for your favorite home. They will evaluate recently sold homes that are in the area and similar to the home you want to make an offer on. Using the information from the comps, your REALTOR® will help you reach a fair offer price to present the seller.

5. Make the Offer

As soon as you have selected your favorite home, make an offer immediately! Don’t delay as there may be other offers coming in and your negotiating ability is weakened if there is competition. If there is a multiple offer situation, your REALTOR® will assist you in putting together a strong offer that is attractive to the seller.

6. Negotiate

Typically, an offer is not accepted on the first try; so, you’ll need to be prepared to negotiate with the seller to meet terms satisfying for both parties. Your REALTOR® is familiar with the market and will guide you through this process. Be willing to compromise on anything including the sales price, option period or even a lease back. With a multiple offer situation, nearly everything is negotiable. If your REALTOR® is a Certified Negotiation Expert (I am!), they are an expert in negotiating deals that leave both parties satisfied and happy.  Keep in mind, you can walk away from an offer during negotiations rather than be stuck with terms you aren’t comfortable with.

7. Under Contract

Your offer has been accepted and both parties have signed the contract. You now need to work with your REALTOR® to deliver your earnest money and option fee checks as quickly as possible. Time is of the essence during this phase; so, you’ll want to move quickly to avoid defaulting on your contract or losing the deal.

8. Due Diligence

As soon as your offer is accepted, you have a small option period to do your research on the home. Typically, this period is 7-10 business days; so, schedule a home inspection right away. You’ll want additional time after the home inspection for expert inspections if needed and to negotiate repairs. Your REALTOR® can provide you with a list of licensed inspectors.

9. Option Period

The option period is the 7-10 day window you have for inspections and other due diligence. Once you have conducted your research, you and your REALTOR® will decide what repair items you would like addressed by the seller. Keep in mind, repairs are negotiable and you and your REALTOR® will work together to reach terms agreeable to you and the seller. Any changes must be agreed to in writing by both parties.

10. Get Ready For Closing

After the Option Period, your lender, escrow officer and REALTOR® will be working behind the scenes on your file to smoothly get you to the closing table. Stay in touch with all of these people, especially your lender; so, you can quickly get them anything they need to process and approve your loan. This is when underwriting happens; so, do not make any large purchases, open any accounts or move any money around during this time.

11. Shop for Insurance and a Home Warranty

You need homeowners insurance and now is the time to select a provider. Many people opt to bundle their automobile and homeowners insurance for a discounted rate, but just make sure that you compare a few different companies and policies. A Home Warranty is optional and covers if items in your home break, such as appliances. Your REALTOR® can provide a list of insurance companies and home warranty providers.

12. Review the Closing Disclosure

3-5 days before closing, the title company will provide you a copy of the Closing Disclosure (CD) for your review. This document details all the credits and debits to the buyer/seller, and funds needed to complete the sale. Share this document with your REALTOR® and review in detail for any errors or questions.

13. Walk-Through

The walk-through is typically the day of closing or a couple of days before. This is your opportunity to take a final look at the home to ensure all agreed upon repairs were completed and the home is in the same condition as when you agreed to purchase it.

14. Closing

On or before closing day, schedule a wire transfer or purchase a cashier’s check for your closing cost. Don’t forget to bring your photo ID (drivers license or passport – must be government issued.) The process takes about an hour for the buyer and there are several documents that you will be signing. Be sure to ask any questions if you don’t understand something.

15. Funding

Once you and the seller have both signed at closing, the lender will review the documents. If everything looks good, the lender will authorize a wire transfer from the title company to the seller. This process is usually about an hour, but can possibly roll over into the next business day. (Note, this wire transfer is for the complete purchase price.)

16. Get the Keys

As soon as the sale has funded, you will get the keys to your new home. Congratulations!!!

Do you have questions about the buying process? Are you looking for a great lender, home inspector, insurance company or home warranty provider? When you are ready to buy, I would love the opportunity to discuss with you the process in more detail and how I can help you negotiate and get your home! Contact me today!