The Home Buying Process 101
Buying a house requires a lot of time and effort, but these 10 steps can help make the home buying process manageable and help you make the best decisions possible.
Step 1: Start Research On What You Can Afford
Most homebuyers obtain home loans to purchase homes. If you're buying a home with cash or the equivalent, you can skip this and Step #2. Otherwise, start by searching for a mortgage calculator or mortgage affordability service online or contact a lender or mortgage broker.
Lenders generally recommend that people look for homes that cost no more than three to five times their annual household income if the home buyers plan to make a 20% down payment and have a moderate amount of other debt. These are not necessarily required. Other things to consider are loan type, closing costs and fees, property taxes, association fees, and insurance.
You should make these determinations based on your own financial situation in conjunction with a trusted lender. If you need recommendations for lenders in the area just let us know. We suggest you contact no less than three companies before selecting one of them.
Step 2: Get Prequalified and Preapproved
Before you can make any offers on a home, you will need a prequalification letter from a lender. To get prequalified, you just need to provide some financial information to your mortgage bankers, such as your income and the amount of savings and investments you have. Your lender will review this information and tell you how much they can lend you. This will tell you and your Realtor the price range of the homes you should be looking at. Later, you will provide your financial documents (W-2 statements, paycheck stubs, bank account statements, etc.) so your lender can verify your financial status and credit.
Step 3: Find the Realtor, The Procopio Group is #1
We at The Procopio Group are important partners when you're buying or selling a home. We are full-time experts in walking you through the home buying process, providing you with helpful information on homes and neighborhoods that aren't accessible to the public. Our knowledge of the home buying process, negotiating skills, and familiarity with the area you want to live in are extremely valuable. Best of all, it doesn't cost you anything to use us we are compensated from the commission paid by the seller of the house.
Step 4: Shop for Your Home and Make an Offer
Start touring homes in your price range and communities. It might be helpful to take notes on all the homes you visit. You will see a lot of houses! It can be hard to remember everything about them, so you might want to take pictures or videos to help you remember each home.
Make sure to check out the little details of each house. For example:
Test the plumbing by running the shower to see how strong the water pressure is and how long it takes to get hot water Try the electrical system by turning switches on and off Open and close the windows and doors to see if they work properly
It's also important to evaluate the neighborhood and make a note of things such as: Are the other homes on the block well maintained? How much traffic does the street get? Is there enough street parking for your family and visitors? Is it conveniently located near places of interest to you: schools, shopping centers, restaurants, parks, and public transportation? Take as much time as you need to find the right home.
Step 5: Make an Offer
We'll work with you to negotiate a fair offer based on the value of comparable homes in the same neighborhood. Once you and the seller have reached an agreement on a price, the house will go into escrow, which is the period of time it takes to complete all of the remaining steps in the home buying process.
Step 6: Get a Home Inspection
Typically, purchase offers are contingent on a home inspection of the property to check for signs of structural damage or things that may need fixing. We'll help you arrange to have this inspection conducted within a few days of your offer being accepted by the seller. This contingency protects you by giving you a chance to renegotiate your offer or withdraw it without penalty if the inspection reveals significant material damage.
You will receive a report on the home inspector's findings. You can then decide if you want to ask the seller to fix anything on the property before closing the sale. Before the sale closes, you will have a final walk-through of the house, which gives you the chance to confirm that any agreed-upon repairs have been made.
Step 7: Contract Review
In Illinois, home buyers, and sellers typically review contracts with their lawyers. We have trusted referrals for attornies who specialize in real estate transactions.
Step 8: Work With a Lender to Select Your Loan
Lenders have a wide range of competitively priced loan programs and a reputation for exceptional customer service. You will have many questions when you are purchasing a home, and having one of our experienced, responsive mortgage bankers assist you can make the process much easier.
Every homebuyer has their own priorities when choosing a mortgage. Some are interested in keeping their monthly payments as low as possible. Others are interested in making sure that their monthly payments never increase. And still, others pick a loan based on the knowledge they will be moving again in just a few years.
Step 9: Home Appraisal
Your lenders will independently arrange for an appraiser to provide an estimate of the value of the house you are buying. The appraiser is a member of a third-party company and is not directly associated with the lender. The appraisal will let all the parties involved know that the property has been appraised at or higher than the agreed purchase price.
Step 10: Analyze and Close the Sale
As you can imagine, there is a lot of paperwork involved in buying a house. Your lender and attorney will arrange for a title company to handle all of the paperwork and make sure that the seller is the rightful owner of the house you are buying. They will also set a closing date that works with everyone's schedule.
At closing, you will sign all of the paperwork required to complete the purchase, including your loan documents. It typically takes a couple of days for your loan to be funded after the paperwork is returned to the lender. Once the check is delivered to the seller, you are ready to move into your new home!