Home Buying Guide
Congratulations on deciding to buy a home! Use this step-by-step guide as a way to prepare yourself for the process.
Interview real estate agents
- What experience do they have? How many homes have they sold in the last year?
- Can they provide recent references?
- Will you work with one person, or a team of people?
- How is the agent being compensated?
- Do you have to sign a buyer’s agency agreement?
Become an expert in your market
Review the offer paperwork
- Be familiar with the offer paperwork and legalese before you find that perfect home.
- Understand the risk and trade-offs that come with various terms in your offer contract.
Use a buyer’s agent for home tours
- Agents can access any home that is listed for sale, even listings from competing agents.
- Many listings do not have open houses or require appointments to view. Your agent can make this process easy.
Determine your criteria
- Price Range.
- Needs, wants & must-haves.
- Type of home (Residential, Condo, Townhome).
- Geographic area & neighborhood.
Consider all of your options and know your trade-offs
- Residential vs. Townhome vs. Condo.
- New construction vs. Fixer-Upper.
- In-City vs. Suburban.
- Evaluate local schools.
Set-up an online search
- Make sure you set up alerts for new homes and price changes.
- Your agent can help with online searches. They spend all day watching listings and can help you find homes sooner.
- Don’t miss out. Successful buyers often tour newly-listed homes in the first few days on market.
Set-up home tours with your agent
- Plan to see several before you place an offer. Nothing replaces an in-home tour!
- Plan your tours in advance. Many homes are occupied and require an appointment.
- Take notes and photos on your tours. It can be hard to remember everything you’ve seen.
- Speak with at least 2-3 lenders and get pre-approved for a loan.
- Find out what you can afford to buy, and how much of a down payment you will need.
- Discuss finance options with your lender.
- Understand how the loan officer is paid and loan fees that you will be responsible for.
Work on your budget
- Put together a budget based on your projected monthly payment.
- Don’t forget property taxes, insurance and ongoing maintenance costs for the home.
Get a pre-approval letter
- Ask your lender to prepare a pre-approval letter that your agent can submit with your offer.
- An offer without a pre-approval letter is unlikely to be taken seriously by a seller.
Prepare your cash to close
- Understand how much cash you will need to close.
- Ask your lender for a Good Faith Estimate that breaks down all of the transaction costs.
- Document all money transfers and don’t open any new credit lines until the home is closed.
Understand the situation
- How long has the home been on the market?
- What is the seller’s motivation?
- Are you competing against other bidders?
- Make sure you and your agent have seen the home in person.
Prepare your offer strategy
- What’s a fair price? Ask your agent to analyze recent sold properties in the area.
- What contingencies should you include in your bid?
- How will you need to improve your offer to compete against other bidders?
Review paperwork and offer strategy
- Plan to spend about an hour with your agent reviewing the paperwork and strategizing your offer.
- Understand what you are signing.
- Evaluate risks and trade-offs for various offer terms.
- How much do you want this particular house? Remember that there will always be another house to buy if this one doesn’t work out.
Be a persistent negotiator
- Be sure to be persistent in your negotiations. Your agent should keep the negotiations moving along (on paper) until both parties are satisfied.
Have earnest money ready
- Be prepared to write an earnest money check at the time of your offer.
- This is the seller’s safety net should you default on the offer.
- Ask your agent what type of contingencies to put in place to protect your earnest money.
Making an Offer
- Using an escalation clause in your offer
- Winning a bidding war for your new house
- Can you show me proof of competing offers?
- The not-so-obvious reasons you can win a bidding war for a house
- I just lost a bid for a house. Should I put in a backup offer?
- 5 reasons you are going to lose your bid for a home
- Competing with another offer
Pay attention to deadlines
- Ask your agent to prepare a list of timelines required by the purchase & sale agreement.
- Schedule a home inspection.
- Apply for your loan.
- Shop for home insurance.
- Review the title report.
Review inspection results
- Review inspection results and be reasonable when negotiating items that come up during inspection.
- Consider other types of inspections – sewer, mold, lead paint, etc.
Homeowners Association (HOA) review
- Determine if the home is subject to a Homeowners Association.
- Read through HOA rules, regulations and budgets.
- Understand if there is litigation, special assessments, rules or rental caps that could affect your ownership of the home.
Respond promptly to lender requests
- Every day you delay documentation to your lender is a potential delay in your closing.
Ready to sign
- Have your down payment ready.
- Plan to be in town before closing to sign documents. You must be accessible if last-minute signatures or documents are required.
Short Sales and Other Distressed Transactions
- Foreclosure vs. Short Sale vs. Bank Owned vs. REO
- Should I consider buying a short sale?
- The risks of a successful short sale
- The changing landscape for buying a short sale
- The short sale approval letter
- Buying real estate that is in bankruptcy
- Can I buy a REO property before it is listed on the MLS?
- Buying a home at a trustee auction in Washington
- How to negotiate the price of a short sale
- How to negotiate the price of a bank owned home
- Why do short sales take so long to be approved?
We work with a variety of professionals and contractors that can help with your home. Check our resources list or ask your findwell agent for recommendations.