Select a lender and apply for a loan. There are many factors that will determine the type of loan you are able to get and what interest rates will be offered to you. Additionally, some lenders, banks or credit unions are able to get approval for loans that others are not. Rates may vary between different institutions. For that reason, you are able to shop around without penalty. You may apply with as many lenders as you would like within a thirty day period, it will only show up once on your credit. Keep in mind it is important to select a lender prior to shopping for a property. In todays market, offers are submitted with pre approval letters! Also, you should be settled on you lender prior to entering into a contract to purchase a property, changing lenders after that point may cause complications.
Shop properties! It is important to define what type of home you are looking for (size, location, condition). Your real estate agent will work with you to find properties that fit within your parameters.
Disclosures will be provided to you upon acceptance of your offer. This may include the sellers property disclosure, in which the seller will provide known information about repairs or defects with the property. If you are purchasing a property with an HOA, all applicable documents will be ordered and provided to you by your agent.
Order and conduct inspection(s). Your agent should have great referrals for inspectors. You will have the opportunity to conduct a general inspection, and specific inspections such as a sewer scope and radon test. Typically the buyer is responsible for paying for all inspections. If the inspection reveals conditions that are unacceptable to you, you will have the opportunity to ask that the conditions be improved. This is a negotiation point in the contract. The seller may or may not agree to any specific item. If no resolution can be reached the buyer is able to terminate the contract and walk away with their earnest money.
Order a homeowner's insurance policy. You will be responsible for insuring your new home. It is a good idea to order the insurance well before the deadline stated on your purchase contract. Ordering your policy early will prevent any last minute complications, should something unexpected arise (for instance the prior home owners claims will affect your rate and ability to insure the property).
Your lender will provide you with a Loan Estimate Form. This is a preliminary breakdown of the total costs you will incur when purchasing your home.
Appraisal will be ordered by your lender. In some cases the lender will cover the cost of the appraisal, in others the buyer may be responsible for paying for the appraisal. You will receive a copy of the appraisal. Appraisers are responsible for forming an opinion of market vale of a property. Their determination may be higher, lower or exactly the same as the sale price. If the house appraises below the agreed upon sale price, this becomes a negation point. Lenders will not exceed a property's appraised value when considering your loan. If the house appraises below the sale amount, and no resolution can be reached, the buyer is able to terminate the contract and walk away with their earnest money.
Congratulations, it's time to close! In most cases, once you close on the property it is yours (unless otherwise specified on the purchase contract). You will typically get your keys and your deed at closing and will be able to move in that day if you so desire. The title company will record your deed for public records.
Submit purchase offer once you find a property that is right for you. Since the market is currently very competitive, it is very likely that there will be multiple offers on most properties. Your real estate agent should be familiar with different options to make your offer more competitive. Be prepared to negotiate or to walk away at this point. The sellers have the option to counter your offer with a change in terms, timeline and/or price. Be firm with your budget, you know best what you can afford!
Your lender will provide you with a Closing Disclosure Form, this will give you with the final figures prior to closing. (It will correspond closely to the Loan Estimate Form provided by your lender prior). The Closing Disclosure form will provide you with the total amount you need to bring to closing. Once you have this form, you should make arrangements to bring whatever funds necessary. Typically your lender will wire funds for your loan amount and you will be responsible for wiring or bringing a cashiers check for your downpayment (cash at closing) amount. Make sure to communicate with your lender and your agent to verify how your funds will be expected.
The final walk through of the property will typically occur 24 to 48 hours prior to closing, as agreed upon by the buyer and the seller. The final walk through is your last opportunity to look to property over and to make sure the condition of the property has not changed (for instance, if damage occurred when the seller was moving). It will also be your final opportunity to verify that all items agreed upon, during inspection negotiations, have been completed.
Make arrangements to have power and utilities switched over to you. You can make these arrangements prior to closing. If you are unable to determine your specific provider, ask you real estate agent!
Earnest money is due upon acceptance of your offer. Earnest money is a deposit of good faith, it is most often held by the escrow or title company. The amount of earnest money due is determined by the seller and seller's agent prior to listing, it can vary greatly, but is often 1%-2% of the listing price. Should a problem come up with inspection, appraisal, lending or insurance you will be able to walk away from the contract and the earnest money will be returned to you. If everything goes well, and you close on the property, the earnest money will be part of your cash at closing.
Select a real estate agent that you can trust and will feel comfortable working with. It's your agents fiduciary responsibility to advocate for your best interest. As a buyer, you will not typically be responsible for paying your buyer's agent, it's the seller that typically pays all agent fees. That said, read your contact carefully, some agents will require that the buyers pay brokerage fees unpaid by the seller. Your agent will also have useful advice about lenders and the loan application process, so it does not hurt to contact an agent first.