When you know what to expect, the home buying process can be made much simpler. Here’s a handy guide to the typical home buying process:
Step 1: Prequalify For Your Mortgage
The first step in the process will be to prequalify for your mortgage. In fact, most real estate agents will require you to prequalify before you can even being seriously looking at a new home. By knowing how much home you can afford, how much you will need to close escrow, and what your monthly payments will be, your mortgage consultant can help you to clear the way for a smooth home buying experience – collecting necessary documents and clearing up loan conditions that could slow or impede the process.
Step 2: Find a Realtor
Once you have prequalified for your mortgage, unless you plan to purchase a “For Sale By Owner” home, you need to find a realtor. Finding a good realtor can make all of the difference in the world. Just like in all businesses, there are good realtors and bad ones so finding someone that you trust is key to having a positive home buying experience. If you don’t know any realtors that you would want to do business with, ask a family member of friend if they have had a positive experience with a realtor, or, ask us! We can direct you to several realtors with whom our clients have had excellent experiences with in the past.
Step 3: Find a Home
During your time house-hunting, you and your realtor will probably get to know each other very well. Your realtor will take you out and show you homes that match your needs, wants, and price range. It may only take a day to find the home of your dreams, but be prepared for it to take longer.
Step 4: Sign a Purchase Agreement
Once you’ve found the house you want to make your home, your realtor will negotiate the price of the home on your behalf. Once a sales price and terms have been worked out, a final contract will be completed.
Step 5: Final Approval
Once the contract is ready, your mortgage consultant will order an appraisal and title report on the home you’re purchasing. Once these have been received by the mortgage consultant and the final conditions of your mortgage have been cleared, all that’s left to do is to wait until the Close of Escrow date.
Step 6: Going to the Title Company
Once all of the paperwork is done and your mortgage has received final approval, the mortgage documents will be drawn and delivered to the title company. Within a few days of your close of escrow date, you will go down to the title company, where you will spend a while signing an inch or two of paper.
Timing and Variables
While the exact timing of the entire process depends on important variables, the whole process generally takes between 30-45 days. These variables can include:
Prequalification Variables: 1-2 days.
Be wary about lenders that say they can qualify you in five minutes. While is sometimes possible, don’t count on it being a certainty. It’s always better to have a longer, more thorough prequalification done for you; that way you won’t be set up to be let down. All too often, with these “quick-and-easy” prequalification lenders, a prospective homebuyer receives a prequalification for more house than they can really get approved for. Getting a less-than-thorough preapproval is setting you up for a potentially huge disappointment.
Realtor Search Variables: 1-2 days.
Remember, the key to selecting a realtor is finding one that you TRUST. If you meet with a potential realtor, and you have a bad feeling, that’s probably a good sign that you should try and find another one.
Find a Home Variable: 1-100 days.
This is the biggest area for variability. This is a big purchase, and it’s okay to be picky – you and your realtor will work together as a team to find the home that’s right for you.
Contract Variable: 1-30 days.
Sometimes, negotiations go very quickly and your first offer may be accepted. Then again, your realtor may need to do a lot of negotiating and this time period can be drawn out. Your realtor’s job is to get you the best price and terms, so give them the chance to do what they do best! Your contract will usually be written with at least a 30-day Close of Escrow, in order for the seller to move out, and find a new place to live. Once the contract is written, it can be upwards of 20-days before you own your new home.
Final Approval Variable: 10-20 days.
While you are finding a home and negotiating the price, your mortgage consultant will be doing all the work that is necessary to move toward final approval. The speed at which they can work, is 100% dependent on your cooperation – so be prepared to work with them! If they need some paperwork, be quick to provide it. If they call you, call them back as soon as you can. Once your final approval is received, all that’s left is to wait for your Close of Escrow date.
Your mortgage consultant and realtor will be able to provide you with a more accurate timeline, once they’ve had the chance to speak with you and get to know your specific situation and needs.
Ready to start the mortgage and home buying process? Reach out to us or apply now!