Steps in a Real Estate Purchase Click Below to Use Our Map Search
The following is a list of steps a typical buyer would experience when purchasing a home. We like to provide this information, especially to our first time home buyers, to make the entire process easier to understand.
Because knowledge is power, having a "road map" to guide you down the path toward home ownership can make a world of difference in your comfort level.
Steps in a typical real estate transaction for a buyer:
This is not necessarily going to be the same agent whose name appears on the "for sale" sign outside the house you're interested in. That agent is called the Listing Agent or the Seller's Agent. The Listing Agent's goal is to get their client's house sold...not necessarily on ensuring it's the right house for you. Having your own Buyer's Agent who is specifically focused on your needs and finding the right house for you is always a better situation. Learn more about buyers benefits from our CornerStone Properties NW contact.
- Get pre-approved for a loan
Get in touch with a lender; this could be a bank, mortgage broker, credit union, or a private lender. Your loan representative will help you work out a budget for the purchase of your new home. You will need to divulge your income and liabilities so the lender can determine how much you can reasonably afford to pay for a home. The lender will then give you a letter of pre-approval to present to sellers when you submit offers. The letter shows that you are a serious and financially capable buyer.
With a price range in mind, and pre-approval in hand, you're ready to hit the road. But that doesn't mean you have to "max out" your limit on the home price. The pre-approval limit is the maximum amount you should spend on a home. But anything lower than that will help make those mortgage payments easier to afford. You can start your home search right here using the CornerStone Properties NW "Property Search". Then, contact one of our professional agents for private showings of homes that interest you. Or, you can let us do the searching for you.
Once you have found a home you like, your Buyer's Agent will generate and complete all of the necessary paperwork needed to submit a strong offer. You will need to instruct your agent regarding how much earnest money you'd like to include, how much you'd like to offer as your down payment, how much you intend to finance through your lender, and when you would like to close the deal and take possession of the home. Our agents know how to write a strong offer and will explain any strategies, issues or details necessary.
This is sometimes the most anxious part of the process as you won't know how the seller is going to respond. If the seller accepts your original offer, then it's inspection time. If they don't, they will likely respond with a "counter-offer" which will include different pricing or terms. Once you've signed off on pricing and terms, earnest money will be deposited at the agreed upon title company, and a home inspection will be scheduled. If an agreement cannot be reached, the transaction is terminated at no cost. (Our CornerStone Properties NW Team can help make buying easy.)
Because buying a home is likely to be the largest investment you will make, you will want to be certain you're buying a quality property and not somebody else's problems. You will definitely want to hire a professional home inspector to look at the property from top to bottom. Often, the worst problems aren't apparent to the untrained eye. (CornerStone Properties NW has more on home inspections) Once the home becomes yours, there is very little you can do to get the seller to remedy any defects you discover later on. The thorough inspector will disclose to you in a written report all the observations made about home. Necessary repairs will be identified and estimates regarding the remaining useful life of the home's major systems will be provided. Once you have reviewed the inspector's recommendations, you can either request the seller make any needed repairs, provide you with money to have the repairs done yourself, discount the sales price of the home, terminate the deal, or move forward with no request for repairs or compensation.
After all contingencies in the transaction have been resolved, you will need to obtain homeowner's insurance. You may want to get several quotes from insurance companies to be sure you're comfortable with the price and terms of the coverage. The period of time between the inspection period and closing is a period of significant activity for others involved in the transaction: if the home was occupied, the sellers are preparing to move out, the lender is finalizing the loan documents and obtaining all necessary approvals, the title company is compiling paperwork to payoff any previouly existing loans, and agents are keeping the peace between all parties. It may be a fairly quiet time for you as the buyer but it's also a time requiring patience and letting everyone else do their jobs.
Once all the approvals have been obtained, documents have been generated and the necessary paperwork arrives at the title/escrow company, you will go into the title company offices and sign documents. The buyers and sellers almost always sign paperwork separately from each other. After signing, which can take up to a couple of hours, there is approximately a 24-72 hour period before the actual "closing" happens. During this time, all monies are distributed and the new deed is recorded with the county. Usually, the new buyer will take possession of the home and may begin moving in on the closing date. But sometimes the buyer will take possession at date beyond the closing if the sellers need extra time to move out. In either case, the keys are now yours and you have a new home!!
- Have the Utilities put into Your Name
Remember that having utilities (gas, electricity, telephone, cable, water and sewer) transferred into your name is your responsibility (not the previous owner). Below is listing of providers in the Portland Metro area. Some utility companies want to know the name of the previous owner which, if you didn't know it, may be found near the top of the closing statement you received from the title company.