You’ve found the home you can see yourself living in, now what? There are several stages of the buying process you will go through before you can officially call it your own including:

STEP 1 – Find Your Realtor

Hiring a Realtor is the best thing you can do to ensure you find the right home, for the right price, and have a hassle-free transaction. A Realtor can help you:

• Understand the local market and current house prices
• Access the Multiple Listing Service (MLS) for available properties, expired properties, prices of comparable homes, and details about homes you’d like to see
• Find properties that aren’t available yet to the general public
• Organize and complete all the paperwork to make an offer and close
• Navigate the maze of offers and counter-offers to ensure you get the best deal

Meet with your Realtor to make sure you’re comfortable with them. Some good questions to ask a real estate agent are:

• How long have you been a real estate agent?
• Is real estate your full-time job?
• How many homes do you help clients buy/sell/build each year?
• What agency do you work for and how long have they been in business?
• How experienced are you in the area in which I’m looking to buy a home?
• What’s your plan to help me find the right home?
• How often and by what means will we communicate?

STEP 2 – Figure Out Your Financing

Before you can go out searching for a home, it’s necessary to narrow down the price range in which you’re looking. Meet with a lender–your Realtor should be able to recommend an above-board broker–and see what you qualify for.

Remember that being pre-qualified is different than being pre-approved. Pre-qualification is a bit looser and requires little or no documentation, while being pre-approved gives you a much firmer idea of what you may be able to purchase. Being pre-approved usually increases your chance of negotiating a better deal.

The biggest favor you can do for yourself when figuring out your financing is to keep one question in mind: “What do I want to pay for each month.” Ask your mortgage lender about monthly payments, not just the total loan amount.

Avoid the pitfall of thinking, “How much do I qualify for.” This method of “maxing out” your monthly income can tie you into a high monthly payment and leave little cash for you to spend each month.

Remember also that many things like monthly charitable contributions don’t even show up on a lender’s radar when they’re determining how much you can afford. Approaching your mortgage with a monthly payment mentality vs. a total loan amount mentality will help you find a house that will truly make your comfortable.

STEP 3 – Describe Your Dream House

What do you want in a house? Now that you’ve determined your budget, you can realistically describe what you’re looking for. Come up with a description of your dream house. Write it down, even. This will help your Realtor find only the houses that interest you most.
Some criteria to consider:

Home Features

• Square footage
• Floor plan
• Style of home
• Number of bedrooms/bathrooms
• Bonus rooms – home theatre, game room, sauna
• Acreage of lot
• Maintenance of home/yard
• Repairs needed
• Age of home
• Garage size
• Closet space
• View
• Guest rooms/guest house
• Ability to entertain
• Decks/patios/porches
• Hot tubs
• Fireplaces
• Furnace
• Air conditioning

Neighborhood Features

• Location – proximity to freeways, work, pubic transportation, local attractions
• Setting – neighborhood, quiet street, busy frontage
• Traffic
• Corner lot vs. middle of the street
• School boundaries
• Nearby parks
• Sense of community – seniors, young couples, mixed

Financial Features

• Price
• Homeowners’ Association fees
• Taxes
• Potential for home appreciations
• Value of nearby homes
• Frequency of home sales
• Time frame to complete construction

STEP 4 – Hit the Street

With your financial situation nailed down and your dream home description in hand, your Realtor will help you select some homes to view. Working with your schedule, they will set up appointments for you to tour some homes you’ve pre-selected as potential homes of interest.

Tour these homes and ask lots of questions. A good Realtor knows what to look for in a home–wiring, furnace age, roof condition, insulation, potential problems, and costly fixes in the future. An experienced Realtor also has a trained eye to point out quality construction or functionally obsolescent floor plans. If they can’t answer your questions themselves, they’ll contact the home’s seller to find the answer.

STEP 5 – Select a Home & Make an Offer

Once you’ve found the home you want, it’ time to make an offer. Your agent should have been through this many times, and they can walk you through the process. They can do comparable-home searches, help you find a good appraiser, and put together a good offer.

After you submit your offer, the home’s seller can either accept it, reject it, or make a counter-offer. There is a fair amount of paperwork involved from the offer stage through closing.

STEP 6 – Home Inspection

Before you buy a car, you take it for a test-drive. With homes you don’t have that luxury, but you can send in a pro to look under the hood.

A certified home inspector gives the home you’ve offered to buy a thorough inspection. He will look for everything from structural integrity to electrical wiring to plumbing and beyond. This is an important step in the home-buying process, and one that many buyers don’t take seriously. What’s that saying? An ounce of prevention…

If the home inspector reports any problems that give you pause, you may still proceed with your offer and include repairs as a condition of purchase. Or, you may have the right to withdraw your offer.

STEP 7 – Appraisal

Appraisals are designed to protect buyers, sellers, and lending institutions. They provide a reliable, independent valuation of a tract of land and the structure on it, whether it’s a house or a skyscraper.

The appraised value of a property is what the bank thinks it’s worth, and that amount is determined by a professional, third-party appraiser. The appraiser’s valuation is based on a combination of comparative market sales and inspection of the property.

If you appraisal comes in too low it can be a problem. Usually the seller’s and the buyer’s real estate agents respond by looking for recent and pending sales of comparable homes. Sometimes this can influence the appraisal. If the final appraisal is well below what you have agreed to pay, you can renegotiate the contract or cancel it.

STEP 8 – Closing

You’ve almost made it! After the final offer has been solidified and any conditions met, the home is ready for closing. Closing is the meeting where the transaction is finalized. This usually takes place at a title company. Here you will sign final documents to purchase the home and transfer title of ownership.

Closing is different than funding. You don’t actually take ownership of a property until your mortgage has funded and recorded; when the “check clears the bank” and it is recorded with the local government. In most cases, this occurs the first business day after closing, and this is when you get the keys to your new home.

Congratulations! You’re a homeowner.