The home buying process has so many steps, which is why finding the right REALTOR® is so important. Your agent ensures that each step is followed carefully and mindfully. As with all large purchases, knowing what comes next dramatically reduces the stress and anxiety of the experience. So for all you new and returning homebuyers, here’s my step-by step guide that details the sequence of events when purchasing your new home:
Step 1: We meet and write an offer with a good faith deposit usually 3% of the offer price.
Step 2: I schedule and appointment to formally present the offer to the seller. This allows me the opportunity to expound on my buyers and why they would be a perfect choice for the home. It also gives me the opportunity to answer any questions they may have.
Step 3: The seller will respond in one of three ways they will accept the offer, reject the offer or counter the offer.
Step 4: If the offer is countered, we have the opportunity to do the same thing: accept, reject or counter.
Step 5: Steps 3 and 4 can happen repeatedly until an agreement is met or one party walks away from the table.
Step 6: When your offer is accepted by the seller your 3% good faith deposit is then deposited into an escrow account; a neutral third party that holds the money until closing.
Step 7: Part of the original offer, and terms of acceptance will have a certain number of days for inspections. Once escrow is opened and your check deposited, the days until the removal of contingencies starts counting.
Step 8: During this inspection contingency period you can order any, and pay for, as many inspections that you would like to have performed on the house. These are usually performed within two weeks of the acceptance of the offer. The main purpose of the inspection contingency period is for the buyer to have any and all of his questions about the home investigated. It is the way that the buyer can assure that he knows what he is purchasing.
Step 9: After reviewing the inspection reports you can decide whether all the new information meets with your approval. If it does not, such as certain things being too costly to repair, you have a few options:
Step 10: Then there is another contingency, the loan contingency. This is another shelter time block for the buyer, usually running concurrent with the inspection contingency, and typically lasts a bit longer. During this time the buyer’s lender is assuring that the buyer does qualify to comfortably carry the loan, which the property appraises to assure that the buyer isn’t paying too much and the lending agency is comfortable lending the money for the property. If the property doesn’t appraise, there are more options. The first is that the buyer can go back to the seller with the appraisal showing lesser value and renegotiate. If the buyer still wants the property, generally the bank will still approve the loan on the property if the difference between offer amount and appraisal amount is paid to the bank. If the loan will not be made on the property, the contingency cannot be removed, and the offer falls out of contract.
Step 11: If both the loan contingency and the inspection contingencies are removed both parties go to the closing table and you have your new home!
That’s a lot of steps to a process that can take weeks and/or months to complete, once you find the home you want to buy. It’s an arduous process—but it’s one that makes sure the property you’re buying is worth the amount you’re paying, and that you won’t be surprised by any problems later on!
I’ll help you through it each step of the way so you’re comfortable with the process and getting the best home for your needs and financial benefit! You’ll find that all of the house hunting, offers, counter offers, and anxiety that comes with a new home purchase will be worth it when you step into the house of your dreams and call it your own.