Follow these steps if you want to own your next home.
Buying a home is an exciting thing.
Whether you are taking the step beyond renting to owning your first home, or upsizing, downsizing, or relocating to your next home, this guide will give you a general overview of the major steps in the journey. We are here to walk with you through the entire transaction of buying a home.
Although home buying can be exciting it can also be a confusing process.
Perhaps it’s your first time through this process, or it’s been seven or more years since you last went through it.
The details might change along the way, but these 6 steps to homeownership will guide you on the right path to buying a home you will love.
Step 1 – Get Your Finances Ready
Evidence of your financial management is an important part of being able to buy a home. If you need a loan, putting these things in order will demonstrate that you are prepared to buy your next home.
Check your credit report. You can pull a free one from one of the major credit bureaus. You’ll want to check that:
- All your items are correct
- No evidence of identity theft
- No items wrongly attached to your name that belong to somebody else.
When we bought our first home, a credit pull revealed a collections account for a home phone bill was attached to my name. It was not my account, but an account of someone else who shared my same name. It took a few weeks of dispute and having the phone company research their customer to get the misreported item removed from my credit report.
It might be a good time to have a conversation with one of our lenders, who can do a soft credit pull for you. They can help you plan for any repair work or improvement work that you might have to do before a full pre-approval.
As real estate agents, we work with several lenders who can help you complete these preparation steps for financing.
If you have saved or inherited enough cash to buy a home for cash, this step is not so important. But if you have any plans to arrange for a loan, make sure you complete this step.
You will find the best interest rates if you have 20% of the purchase price as a downpayment. But there are loan programs available at 3.5% for first time home buyers. Down payment assistance programs can get that even lower.
Plan on saving at least 2-3% for closing costs on a loan and title fees. In some cases, if you are paying your buyer’s agent commission, you will need an additional percentage based on your agreement with that agent.
Read More: How much money do I need to buy a house?
Step 2 – Find a Real Estate Agent
Asking for a real estate agent in a Facebook Group is a sure way to have chaos in your inbox. We’ve seen requests have 600 responses in 60 minutes, including ours. That’s overwhelming and does not work.
Your best place to start is with a friend or family member who has used a local real estate agent. They will at least know someone to recommend based on their personal experience, or tell you who not to use as well.
For example, we recently sat for a seller interview with friends who did not want to use their prior real estate agent.
Later in 2024, when you choose a real estate agent in Florida, you will have to sign a loyalty agreement (buyer’s brokerage agreement) committing to work with that agent for a period of time.
Before signing one, we highly encourage you to interview a few agents that came up in your research
When you work with us, you will find a level of professionalism, customer service, and experience in helping you walk through this transaction. We might not always get things right. We’ll have moments of miscommunication, but we bring our best to your home search every time. We are in your corner to help you achieve your goals.
Step 3 – Get Your Preapproval
Of course, if you are buying your home for cash, you can skip this step.
Buying a home takes a large team of professionals, like a lender, title company, real estate agents, and inspectors. The real estate agent you choose to work with will help you connect with the support team that will carry you through.
That includes your lender.
Typically, before you go to see a home, you’ll need to have your pre-approval for a mortgage. On a case by case basis, sometimes we’ll show you a home to get face to face. Beyond the first home or two, we will be having this discussion with you.
Some Practical Tips:
- Ask your real estate agent for lender recommendations.
- Talk with a few different lenders.
- Do the application process – online forms, submit materials – this is where people get stuck.
The lender will ask you to submit different documents such as pay stubs, bank statements, and or income tax records. They verify your financial information.
Many buyers delay their buying process by failing to submit documents in a timely fashion.
Once the lender verifies the information you have submitted, the lender is willing to commit to making a loan, if all other conditions are met.
You’ll be given a pre-approval letter. This is a letter from the lender indicating you qualify for a mortgage of a specific amount.
You will have reached a milestone towards your goal of buying a home. 🏁
We will submit this pre-approval letter with your offer to show the seller how serious and qualified you are.
Step 4 – Find the Right Home
Ask your Realtor to set you up on a search for a property that matches your criteria, starting with your budget.
This might include specific neighborhoods, if an HOA exists, or if a house has a swimming pool.
In our process, we will have a consultation to help you settle on deal breakers, options, and what you want in a house that your budget supports.
Recently we did an interview with a buyer – she was open to townhomes. But in the course of the conversation – a non-negotiable was an outdoor cooking area for entertaining. Townhomes in our area don’t fit that criteria.
Many buyers start with 300 possibilities they are open to. A good consultation will bring that down to maybe 10-15 homes on the market.
As we tour homes, we’ll drill down a little further as to what works and didn’t work on that home. You might discover a non-negotiable or something you are willing to flex on.
Once you find the home, work with your Realtor to fill out the paperwork necessary to make the offer and prepare to make your escrow deposit when it’s accepted.
The company that will do the title work will take over the process of preparing all the necessary legal documents for the transfer of your home. Always communicate with your Realtor during this process.
Step 5 – Run the Race to the Finish Line
As soon as your offer is accepted, the race to the finish line begins to meet contract deadlines. It will feel like a race. Depending on the timelines in your contract, it’ll be a busy number of days.
The three major deadlines for you will be
- Earnest Money Deposit
- Inspection Window
- Loan Approval Window
Keeping these deadlines will keep you in contract. We will walk with you through the entire process – it will feel like a race.
We work with inspectors (home, septic, pool, and other specialties when needed).
Practical tips:
- Communicate with your lender, provide docs, avoid delays.
- Don’t make credit purchases.
- Don’t quit your job
- Get insurance quotes – we can recommend as that will influence your payment.
Once you get the clear to close from the lender and title company, you’ll get to review all your final numbers. You’ll have a chance to do a walk-through of the property
Step 6 – Cross the Finish Line – Your Closing
This is the place of victory. It’ll be arranged to meet at the title company, or the title company will send a mobile notary to where you are. You’ll have to sign all the documents, and when complete – you are a home owner!
We love getting our customers to this point – it’s been a emotional journey with ups and downs, moments of frustration, but it becomes worth it as the keys are handed to you.
To learn more about buying a home in the Treasure Coast of Florida, particularly in St Lucie County, book an appointment with us
