What are the Steps of the Home Buying Process?

Many buyers, especially first-time home buyers, are hesitant to start the home buying process simply because they don’t know where to begin. In this article, we’ll walk through the home buying process from start to finish.

1. FIND A REALTOR®
   The very first step in the home buying process is to find a REALTOR® like myself. You’ll want to make sure your REALTOR® is credible, reliable, trustworthy and has experience buying and selling Real Estate. Since Illinois is an attorney state, you’ll also want to start thinking of a Real Estate attorney you’d like to use at this point in time (typically around $500-$600). If you don’t know of a Real Estate attorney, your REALTOR® will have plenty of recommendations for you.

2. GET PRE-APPROVED & SET YOUR BUDGET
   If you’ll be using a home loan (a mortgage) to purchase your home (as opposed to paying for the home in all cash), The next step in the home buying process is to get pre-approved with a reputable lender- your REALTOR® will have plenty of recommendations for you. Contrary to popular belief, pre-approvals do not impact your credit score. A pre-approval is simply a soft credit pull in order for a lender to see what you could financially qualify for when it comes to purchasing a home. A “hard” credit pull doesn’t occur until you’re under contract on a home and are actually applying for your home loan.

3. START YOUR HOME SEARCH
   Once you’ve found your REALTOR® and you’ve been pre-approved for a home loan, it’s time to start searching for homes! I personally set my client’s up on what’s called an MLS Auto-Search, which essentially sends my clients homes that fit within their search criteria as soon as they are listed in the MLS system, not when they finally show up on 3rd party websites like Zillow, Redfin, Realtor.com etc hours later. You’ll also have access to privately listed homes when you’re set up on an MLS Auto-Search! That’s right, there are loads of privately listed homes out there that aren’t displayed publicly on 3rd party websites such as Zillow, Redfin, Realtor.com NOR will these privately listed homes have a sign in their yard!

4. MAKE AN OFFER & GET IT ACCEPTED
   You’ll work with your REALTOR® to put together an offer on a home that you want. IMPORTANT: keep in mind the market you’re in when putting together an offer! Right now, we’re in an extreme seller’s market given the lack of inventory available, so you’ll want to put your best foot forward when submitting an offer.

5. ATTORNEY REVIEW/INSPECTION PERIOD
   Once your offer has been accepted, you’ll have 5 business days to complete an inspection on your new home. Your REALTOR® will be able to provide you with home inspection companies to use if you don’t know of any (typically anywhere from $400-$600). You can review your inspection report with your REALTOR® and as long as the offer wasn’t submitted in as-is condition, decide if you’d like to request any repairs or remediation credits to be used to fix anything found in the inspection after closing. IMPORTANT: keep in mind the market you’re in when requesting any kind of repairs or remediation credits! Right now, we’re in an extreme seller’s market and if you ask for too much, the seller reserves the right to cancel the agreement (just like you do) during this period of the process.

6. OBTAIN HOMEOWNER’S/FLOOD INSURANCE
   You’ll want to contact an insurance company (such as Geico, Progressive, State Farm etc.) to purchase home owners and/or flood insurance. Your lender may also have some options for you as far as home owners insurance goes.

7. APPRAISAL
   If you are using a mortgage to purchase the home (as opposed to paying for the home outright in cash), your lender will set up an appraisal to be complete on your new home. The appraiser will be doing a check to make sure the home is valued at the price you’re intending to purchase it for.

8. LOAN APPROVAL
   You’ll work with your lender to apply for and obtain your mortgage.

9. CLOSING

   YAY! You’ve made it! It’s closing day and you’ll officially get the keys to your new home. Pop the bubbly and celebrate! Oh, and don’t forget to change the locks on your new home and reset the garage code ;)