Looking for a new house can be equally exciting and overwhelming. Multiple steps go into completing a real estate transaction many people are unaware of. Having a real estate agent will make the process more turnkey for you (pun intended) – but it is important to educate yourself. Learning and understanding the steps of a real estate transaction will help you ask the right questions and be confident in your home purchase. We’ve outlined the high-level steps for you from deciding to move to closing on a home.
1. Deciding to Move.
So you’ve decided to take the plunge! Congratulations! This can be a scary step, but if you keep these helpful hints in mind during your search, finding your dream home will be a breeze.
2. Understanding What You Can Afford.
While nearly 90% of Americans opt to buy a home at some point in their lives, not all know how to properly estimate the correct budget for a home mortgage. Realtors often conclude that a healthy loan amount should be three times your household’s annual income.
If you’re still unsure about the price range of your future home, check out Howard Hanna’s Affordability Calculator, or reach out to us!
3. Discovering What You Want.
A good place to start shopping for homes is online. Warning: Online home search sites such as Trulia and Zillow contain a lot of inaccurate information.
Here are the pros and cons of online home shopping. But, it is a great way to discover what features you like in a home. You can use your online home search to guide your real estate agent to find your perfect house.
Make a wish list! What do you absolutely want in your home? Prioritize the list of what aspects you want the most.
4. Open House After Open House.
The length of this step will completely depend on you. You may go to 3 open houses in a day and find the one, or you may spend months scouring the market with your agent for “the one.” There is no limit to the amount of open houses you can go to, but do your research before going. Try to learn as much as you can about the houses you are going to visit so you can make the most of your time.
ProTip: Bring a list of questions about each house you visit for the listing agent of the home.
5. You’ve Found Your Dream Home
Be honest with your real estate agent about what you’re comfortable with. They will listen! You don’t want to be put into an uncomfortable position as you move forward with an offer and potential transaction.
6. Time to Submit an Offer.
The best way to submit your offer is to let your real estate agent take over. An experienced real estate agent knows the correct way to package an offer for the sellers. This may take some time with counteroffers, so be patient! You want to make sure you’re spending the right amount of money.
7. Offer Accepted? Put a Deposit in Escrow!
Escrow: An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. Confused about escrow and other Real Estate Terms? Read our Beginner Buyer’s Dictionary.
8. Get the house inspected.
Before you turn this house into a home, you want to make sure it’s not going to give you an abundance of problems down the road. It is crucial you have professionals come in and inspect the house before you close on it for good. You want to be educated about the home and understand what may need to be done to the house in the future. After this step, there may be some wiggle room for re-negotiation due to unforeseen circumstances.
9. Make sure everything is financially in line.
This is the time to check with your lender/banker/mortgage agent and ensure everything is ready to proceed with finalizing the transaction. This is an important step because you don’t want anything going wrong with money exchange.
10. Closing time!
Okay, take a deep breath…you are about to be a homeowner! Whether this is your first time closing on a house, or you are a veteran, it’s always smart to use a real estate agent and educate yourself on the steps to purchasing a home!
Wondering if you need a real estate agent? Understand what a real estate agent can do for you here.