If you are looking to buy a home anywhere in OR or WA, I would love to help YOU.
Ashley Christianson
Co-Owner & CEO
Brantley Christianson Real Estate
Broker in Oregon & Washington
(360) 624-4793
ashley@bcrenw.com
10 Steps to Buying a Home
Interested in buying a home and not sure where to start?
We specialize in guiding home buyers successfully through the home buying process.
Step 1: Start Your Research
Figure out your true wants and needs for the house you are looking to purchase. Prioritize the items that are a MUST have and also decide which cards that you are willing to fold.
Step 2: Determine The Right Loan Product & Get Pre-Approved
Before starting the home search, determining how much you can qualify for and what you are comfortable spending per month is key. Having a conversation with a mortgage banker or lender is the best way to understand the various loan programs, estimated monthly payments, and how much money out of pocket you will be bringing to the table at closing. To get pre-qualified, you will need to provide some financial information to the lender; income, the amount of savings and assets you have. The second step to that process, and actually becoming "pre-approved" vs "pre-qualified," is the credit check and providing the supporting documents; W-2's, pay stubs, bank account statements, etc. The lender will then be able to review the information and verify your financial status. With all of that documentation, the lender will suggest loan products that best fit your needs. They will also be able to clearly outline the path to the end and final goal; owning a home. This step will give the clearest answer to the two main questions that home buyers have: how much home can I afford and what will I be on the hook for?
Step 3: Finding The Right Home
Now that you have determined the price range and loan product that is the best fit, the home shopping begins. Real estate agents are important partners, whether you are buying or selling a home. We will be able share all of our knowledge and experience in the home buying process, and real estate market, while representing you and your best interests through every step of the process. There are many hurdles that can derail a transaction, and we are committed to successfully navigating through those to get you to the finish line. Best of all, it doesn't cost you anything to use an agent as a buyer; as the commission is paid by the seller of the property. We can provide access to any home on the market; regardless of who the home is listed with. As your buyer's agent, we are tied to you and not the home. Our main goal is to help you find the best fit and deal possible.
Step 4: Writing The Offer
Once we have located a home that fits all of your needs and you would like to pursue, the next step is determining the fair market value and writing an offer. We will provide a full current market analysis for the neighborhood, so you will be able to understand the surrounding comparable sold properties. After determining the purchase price that we will be submitting on the offer; the rest is pretty simple. All of the documents of the purchase and sale agreement can be signed electronically, via email. We will be able to help explain any areas of the contract that you may have questions about in this step too. Once the offer is completed and signed by all purchasers, it is sent to the listing agent/seller for review. If they agree to the terms we have presented, the home becomes "in escrow." Escrow is the period of time it takes to complete all of the remaining steps in the home buying process. The sellers also have the option to counter; which terminates the original offer we submit. If we do not like the countered terms, you still have the ability to walk away and continue the home search. Also, if the seller opts to take another offer, you are freed from the offer previously submitted as well. All offers have expiration dates, and very rarely do we encounter a seller who fails to respond before expiration. With that said, always keep in mind that the deal has to make sense for both parties for it to work.
Step 5: Offer is Accepted - Home Inspection and Earnest Money
After coming to an agreement with the seller, and having a signed around contract in hand, we move to the next step; scheduling the home inspection and depositing earnest money. The day following the receipt of the signed offer is day one of the ten day "inspection period." This gives us the ability to put the house through it's paces and uncover any and all facts about the property. We work with several home inspectors and can provide referrals, if needed. Any licensed home inspector can provide a full inspection and report; which we then use to request the necessary repairs. We also use this time to go over the full title report for the property; to discover any possible encumbrances or issues. The two days following the receipt of the signed offer (back from the seller) is also the window to deposit earnest money. Earnest money is your refundable deposit that is applied at closing. It is typically 1% of the purchase price of the home, and indicates to the seller that you are a serious buyer. The contract is written to protect this money; if anything is to go sideways in the deal. The money is deposited at the title company who is assisting in the transaction. This office is also where you will be signing all of the documents at closing.
During this 10 day period, we also have the right to walk away without penalty, (and receive the earnest money back,) if any of our findings are not risks that we want to inherit. Theoretically, the most amount of money lost in this step (if you choose to walk away) is the cost of the inspection; which is always a buyer paid expense. Home inspections can range between $300-$800, depending on how extensive the services are. Most are around $400.
Step 6: Continuing the Negotiation
As mentioned in Step 5, the inspection report is used to request the necessary repairs, called out by the inspector. Most sellers are willing to repair minor items or provide a partial credit towards any glaring issues; this is how we continue to negotiate and better your position in the deal. Some sellers choose to sell the property "AS-IS" but they must make that known, prior to coming to terms. If this is the case, we still recommend that you have a home inspection and use that information for your own personal knowledge. Sellers also have the option to say "no" to any request we put forth, but most are pretty reasonable and are willing to work towards the end goal of selling their home and closing the deal.
Step 7: Ordering the Appraisal
Once we have come to agreement on the repairs, notifying the lender to order the appraisal is the next step. According to the National Mortgage Alliance, an appraisal is: "...a written estimate of a property’s market value completed by a licensed appraiser. The value is based upon a market analysis of recent sales prices for similar properties in the area, and the property’s physical condition. The appraisal is performed by an appraiser, an objective third party whose job is to give their professional opinion of the market value of a home." The report is very similar to the full current market analysis that we provide, prior to writing an offer, (referenced in Step 4.) The appraisal is the bank's version of this report, and protects your financing. If the appraisal does not come in the at value written on the offer, the loan will not fund and the deal will not close; ensuring the buyer does not overpay for the home. To overcome this situation, the purchase price must be addressed. Most times, the seller must come down to the appraised value, as the appraisal stays with the home indefinitely. The seller has several options; lower the purchase price, request a reappraisal (at their own cost) or terminate the deal. Very rarely do sellers simply terminate the deal. Again, most are reasonable and would also like to get to the finish line, and sell their home. Buyers also have the option to bring more cash to close, if all other options are exhausted.
Step 8: Final Underwriting
Upon meeting the appraisal requirements, the loan file will head into final underwriting. This is where we will gain final approval, and then move to closing. Lenders may also ask for final documentation that they need at this point. Once final approval is attained, loan documents are drafted and sent to the title company; where you will sign all closing documents.
Step 9: Signing Docs & Closing
As referenced in Step 5, all of the closing docs will be signed at the title company in which the earnest money was also deposited. Once the lender has sent the loan documents to the title company, a signing appointment is scheduled. It typically takes about an hour to go over and sign all of the documents. Both parties (buyers and sellers) sign at the title company. Once all docs are signed by all parties, the title company will submit the documents to the county for one last final approval. We then wait for their green light; usually a phone call saying "we have recorded." This means the transaction has officially recorded with the county, and the house is almost officially yours!
Step 10: Getting Keys & Moving In
The contract is written to give the seller until 9pm on the day of closing to remove all of their items and to vacate the premise. Most sellers are out prior to recording, so keys are typically given upon notice of recording/the transaction has closed. The other final steps of the transaction include switching the utilities over to the new owner's name, which can be done on the phone, or online.
Following these ten steps will not only help you understand the true process of buying a home, but will also ensure greater success in getting to the finish line. As always, we are here to assist and answer any and all questions you may have throughout the process. Other things to keep in mind; the escrow period (the time in which Steps 5-10 are completed) varies based on your loan program. You can plan to account for roughly 30-45 days for a conventional loan, 45-60 for FHA programs. Knowing and understanding the time lines upfront are also very important.