1: Define Your Needs
Congratulations on your decision to purchase a new home! It is important to select a professional real estate agent to work with you before you begin house hunting, in order to help define what kind of home and neighborhood best suits your desires and needs. The finer the criteria on your wish list, the more effective your home search will be. To further define your needs it helps to divide your list into negotiable and non-negotiable items so your agent can operate with some flexibility when scouting for homes on your behalf.
2: Get Pre-Approved
Now that you know what you want in a home and neighborhood you need to know what you can afford. The best way to do this is to get prequalification or preapproval for a home loan. Your real estate agent can refer you to a mortgage broker to begin that process. In most markets pre-approved buyers are preferred by sellers over those who are pre-qualified.
Your pre-approved status lets the seller know:
- You have gone through an extensive financial background check.
- A lender is willing to do business with you.
- The likelihood of unexpected financing obstacles is minimal.
3: Let the House Hunting Begin
Now you are ready to embark on your home search – an endeavor we know can prove overwhelming if not approached with some forethought! The most efficient route is to allow your real estate agent to do the initial scouting for you. Using your wish list as a guide, he/she will alert you of new and existing listings that have strong potential. If they pique your interest your agent will arrange home tours at your convenience. Many agents send daily or weekly email alerts, depending on the available inventory in your market. You also will likely do some research on your own – and your agent can/should recommend the online sources that are most reliable and promptly updated.
Regardless of how you find/locate the property, the next step requires really digging into the details of the property with your buyer agent guide. You’ll want expert assistance evaluating factors affecting the value of the property – including location, size and layout limitations, and key condition items to be aware of up front.
4: Make an Offer
When you’re ready to make an offer on a home your real estate agent will help you determine the offer price by reviewing recent comps – sales of homes similar in size, quality and amenities. With your input your agent will draft a written contract outlining what needs to be done by both parties to execute the transaction. If the seller accepts the offer, the document becomes a binding agreement, so it is imperative that you carefully review it with your agent and speak up if anything is not clear to you. However, if the seller changes any aspect of the offer, it is not a binding agreement until the buyer agrees to the seller’s changes.
5: Ratify/Strike a Deal
Sometimes you get lucky and the seller accepts your offer as written. However, in most instances the seller will make a counter-offer. This is where your real estate agent’s experience in negotiations and knowledge of the area market is invaluable. Keep in mind almost everything is negotiable when you are buying a house. This can give you a great deal of leverage in the buying process IF you have adequate information and you use it in an appropriate manner.
Some items you may negotiate:
- Closing costs
- Move-in date
Remain in close contact with your agent so you can quickly review any changes from the seller, and consult on the most strategic response. Remember that bargaining is not a winner-take-all deal. It is a business process that involves compromise and mutual respect to ensure a win-win outcome.
6: Prepare for the Closing
When an offer becomes a binding agreement your real estate agent (and their team of specialists) will help you tackle the checklist of action items that you, as the buyer, have agreed to perform prior to closing. Depending on how the responsibilities are assigned in the agreement this is typically when you will:
- Conduct home inspections.
- Get an appraisal and finalize your financing.
- Secure title and property insurance.
- Shop for a home warranty.
Completing these steps in a timely and professional manner is a must, as any delays could threaten a contract and successful closing. A first-rate real estate agent should be your “one-stop shopping” referral source for service providers. Your agent also should be your advocate, helping to coordinate activities and making sure the vendors have access to the property to perform their jobs.