Homebuyer’s Guide – Seven Steps

Am I ready to purchase a home? There are many reasons people choose to own a home. They may want to plant roots for their family, create major design decisions in their living spaces, or utilize their own outdoor space for children, gardening, or entertaining. Along with home ownership comes great responsibility.

Different from renting, homebuyers should look realistically at financial expectations that accompany home owner-ship. That can mean variable electric bills, lawn maintenance, property taxes, and home repairs that can range from fixing a hot water heater to replacing a rooftop. Conversely, once these expenses are responsibly established into a household budget, many homeowners express a feeling a great freedom with home ownership—a freedom that takes shape through establishing roots in the community and the autonomy to structure their living space just as they desire.

If you’ve arrived at a decision to purchase a home, what should you do next? There is no one right way to buy a house, but you are starting in the right place by educating yourself about the home-buying process. We have provided the general steps most people take when purchasing a home. Your circumstances may be different—which is why it can be helpful to partner with your Starkey Mort-gage representative to review your personal situation and tailor the process to fit your needs. Here are the main steps you should encounter during your home-buying process:

STEP 1: Pre-qualify for a Loan

Pre-qualifying for a loan puts you steps ahead in the home-buying process. This means the lender or real estate broker will informally qualify you for a loan by asking you basic information about your income, debts and credit. Pre-qualification allows you to determine your ideal price range when screening potential homes.

STEP 2: Partner with a Real Estate Agent

You may want to use a real estate broker, agent, or Realtor® to help you with your search. This person is also known as the selling broker or agent. Interview several agents to find one you are comfortable working with, and who will answer your questions and help you find a property that meets your specifications.

A listing broker lists the property for sale and actively markets the property. A selling broker or agent shows the house to the buyer. Sometimes, the listing and selling brokers are the same person or agency. The seller usually pays the fees for both the listing and the selling agent; those fees are usually determined through a percentage of the purchase price.

STEP 3: Determine Type of Home and Location

Given your price range, decide what kind of home you desire and need, taking into consideration factors your family finds important such as location, style, features (i.e., basement, fireplace, fenced yard), and move-in condition. You will also want to consider school districts and other factors that are important to you and your family.

Consider your home as an investment. What will make your home attractive to purchasers when you are ready to sell? A couple without children may not be interested in local schools for themselves, but the quality of local schools may be an important factor when they want to sell their house. There are good resources available at bookstores, the local library, and through real estate agents that can shed additional light on a home’s sale ability.

STEP 4: Begin House Hunting

Allow time (up to several months) to see a number of homes so you have a good basis for making a final decision. When you find a home you like, carefully give it your own personal inspection. Take notes or pictures so you can revisit your selection at will. Consider touring the neighborhood and seeing the house at different times of the day or on weekends to check traffic patterns and other amenities that may affect your decision. Don’t be afraid to chat with your potential new neighbors if you see them out and about while you are inspecting a potential home. They can provide you with great detail based on first-hand experience living in the community you are considering.

STEP 5: Make an Offer and Sign a Purchase Contract

If you find a home you would like to make your own, make an Offer to Purchase, including an "earnest money" deposit. You should make sure the written offer stipulates that you receive your money back if a professional inspector reveals undisclosed problems with the house, or if you are not able to get approval for a mortgage. Remember that negotiation of home prices is a commonly accepted practice. Work with your agent to submit a practical figure based on factors such as how long the home has been on the market, the condition of the home, and whether or not the home’s asking price correlates with comparable local listings.

STEP 6: Hire a Real Estate Attorney [Varies by State]

The use of attorneys for real estate transactions varies by state. In some states, you will not need to hire an attorney to assist you with purchasing your home since your real estate agent will be trained to prepare the necessary contracts, and the closing will be conducted by a title insurance or escrow company.

In other states, you will need to hire an attorney to prepare the documents and conduct the closing. As with all transactions involving legal documents, it is important to read and understand any documents you are asked to sign. If you are unsure about the meaning of any documents, it is a good idea to consult an attorney who specializes in real estate transactions.

STEP 7: Conduct Professional Inspections

Your Purchase Contract will permit you to have various professional inspections and will govern your rights if an inspection uncovers a problem. Before you make an offer and sign a purchase contract, ask your real estate agent or attorney which inspections are best for your area. For example, standard purchase contract forms often do not provide for radon inspections. Have the necessary inspections included as a contingency for your offer. You may also want to negotiate certain repairs on the home based on inspection findings before you agree to close.