10-Step Program to Buying a Home

1. Get pre-approval
In a hot real estate market, pre-approved home buyers get preferential treatment when negotiating home purchases. Why? Because pre-approved buyers are financially qualified to purchase the home and are considered more serious than buyers who are not. Nothing feels worse than finding the ideal home in the perfect area, and then not being able to get the financing to close the deal. A pre-approval will provide as a reality check prior to mapping out your life in a home that you cannot afford.


2. Meeting with your agents for a home buyer's consultation
Also a very important step in the process, this is when you and your agents prepare each other for exactly what to expect along the way. The following points should be covered and fully understood during this meeting:

  • Exactly what your needs are (number of bedrooms, baths, etc.), in which areas you're looking, what price range you are comfortable with, and what your time line is. It takes generally takes 30 to 45 days from purchase to closing.
  • How often you are available to look and what you expect from your agent in terms of availability and communication (e-mail, phone updates either daily or weekly).
  • Your agent should give you copies of all the paperwork you will be expected to sign throughout the process and briefly explain what each form is for.
  • Your agent should explain buyer brokerage vs. seller's representation, and you should sign a buyer broker agreement.

3. Look at homes

This is the fun part. It is important to limit the number of homes you're looking at in a day. If you look at too many homes, they begin to run together, and you can't remember one from another. It's a good idea to use a checklist form to help you track the properties you have seen. It is also helpful to actually begin to narrow down the properties after each visit. For example, if house #3 was better than house #2, immediately eliminate house #2. Remember, communication with your agent is crucial. It's important to let your agent know which houses you like and why, as well as which houses you don't like and why. Sometimes it takes going out and looking one time before you and your agent really have a good grip on exactly what you're looking for. Call your agent, and have him/her do the research on any advertised properties that look interesting to you. That's what agents get paid for. If you should become interested in a for-sale-by- owner, ask your agent to contact the seller before you do, to see if he/she will cooperate (pay a commission) with a buyers' agent.

4. Select a home
Once you've narrowed your search down to one or two homes that you really like, your agent will do whatever research necessary to help you make your decision, but the decision will ultimately be yours. And surprisingly enough, it's going to be a pretty easy decision to make. Buyers are welcome to call the local chambers of commerce for any statistics in which they might be interested. Local zoning and planning offices are a good source for future road plans, etc. Once you've selected one home to focus on, your agents will do a comparative market analysis on that property. This involves determining "fair market value" by looking at what other buyers were willing to pay for properties similar to yours in the same neighborhood or area.

5. Making an offer & negotiation
When making an offer on a property, it is important to decide ahead of time how much you are willing to pay at what terms for the house. You already know what fair market value is. Now you have to decide what price you will offer; how much deposit you will offer; what personal property you wish to have convey (everything is negotiable); when you plan to close; and what inspections you plan to have conducted.

When negotiating with any seller, it's best to remember not to take anything personally. Also, try to put yourself in the seller's shoes. Figure out what's not negotiable to you, and be willing to give a little on the things that are negotiable. A good agent should be able to give you tons of advice about how to structure your offer. Once your offer has been presented, the seller will either accept your offer outright, reject your offer outright, or counter your offer. The counter process can go back and forth many times. It's important for all parties to keep their cool and focus on the goal.

6. Get inspections & remove conditions
If, as part of your offer, you asked for time to be allowed to have inspections conducted on the property, you should have written what is called a conditional offer. Offers can be conditional upon financing, inspections, the receipt of acceptable condo estoppels certificates, the sale of property, and many other conditions. It is important that all deadlines be met and that all conditions are removed exactly the way the contract describes. Your agents are responsible for making sure this is done correctly.

7. Select a notary

If you do not have an attorney already then your agent or mortgage broker can help you find one that specializes in real estate transactions at a very reasonable price.

8. Walk-through
Most sales agreements will give the buyer the right to one pre-closing inspection. This is your last chance to find any problems and have the seller correct them. Read the contract carefully, but most contracts read that all electrical systems, plumbing, appliances, heating, and air conditioning need to be in working order at the time of closing. These are the items you checking for at walk-through.

You are also checking for any other items the seller previously agreed to fix or replace. If anything is found to be defective or missing, you have several options: The seller can remedy the problem prior to closing; the seller can credit you the amount of money it would take to hire someone to remedy the problem; or the seller can promise to correct the problem and place into escrow with the attorney the amount of money you will need to pay someone else if the seller does not perform as promised.

On new-home purchases, the process is a little different. The builder will generally do a walk-through with you approximately one to two weeks prior to closing, resulting in a "punch-out list." Hopefully, they will get everything on the punch-out list completed prior to settlement. If not, most new-home contracts allow the builder to complete whatever minor items have been noted in a "reasonable" period of time.

9. Closing on your home
This is the day you "sign your life away," as most clients say. Not really. You will be signing all of the mortgage documentation, which can seem never-ending. The lawyer conducting the settlement should be able to explain every document to you in a satisfactory manner. Do not ever feel intimidated. If you don't understand, don't sign. Your lawyer will help your understand everything. If you like, you can request blank copies of the documents you will be signing in advance so that you can carefully review them. You will have to present whatever down payment and closing-cost funds you were expected to pay. This check must be certified; personal cheques usually are not accepted.

10. Moving day
This is the last and probably the hardest step in the home-buying process. A little bit of planning and forethought, though, will make for a much smoother move. You will want to make arrangements with a moving company as soon as you can. Call at least two in order to get competitive quotes. They will usually ask to come to your home to get an idea of how much they will be moving and the distance they will need to travel. Be sure to change your address with the post office, your banks, and any creditors at least 30 days in advance. To avoid late payments, it's a good idea to actually call and verify receipt of the address change whenever possible. Call to order your utility hook-ups approximately 10 days prior to your move. Be aware that some utility companies will keep you on the phone for a long time.

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