Steps in Purchasing a Home

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Steps in Purchasing a Home

Step 1: Pre-qualification

Get "pre-qualified" for a loan. This means the lender (or preferrably a real estate broker) will informally qualify you for a loan by getting basic information on your income, debts and credit. There should be no charge for this. By getting pre-qualified, you can usually estimate how much you could borrow for a home. Need a capable real estate broker? Realty Works would be happy to recommend ones to you.

Step 2: What kind of home and where?

Given your price range, decide what kind of home you want/need: size, location, special features (such as fireplace or fence), etc. You will also want to consider school districts and other factors that are important to you and your family. Consider your home as an investment. What will make your home attractive to purchasers when you are ready to sell? A couple without children would not be interested in local schools for themselves, but the quality of local schools may be an important factor when they want to sell the house. There are good resources available at bookstores, your library and through real estate agents on what factors are especially important for buyers and for sellers.

Step 3: Find a real estate agent

You may want to use a real estate broker/agent to help you with your search. This is the selling broker/agent. Interview several brokers/agents to find one you are comfortable working with, who will answer your questions and help you find a property that meets your specifications. A listing broker lists the property for sale and actively markets the property. The selling broker or agent shows the house to the buyer. Sometimes, the listing and selling brokers are the same agency. The fees for the listing and selling broker/agent are generally paid by the seller, usually as a percentage of the purchase price.

Step 4: Begin house hunting

Allow time to see a number of houses, so you have a good basis for making a final decision.When you find a home you like, carefully give it your own personal inspection. You will also want to tour the neighborhood and perhaps see the house at different times of day or on weekends to check traffic patterns and other amenities that may affect your decision.

Step 5: Find a Real Estate Attorney

The use of attorneys for real estate transactions varies by state. In Connecticut, you’ll need to hire an attorney to prepare the documents and conduct the closing. As with all transactions involving legal documents, it’s important to read and understand any documents your are asked to sign. If you are unsure about the meaning of any documents, it is a good idea to consult an attorney who specializes in real estate transactions. Need a capable real estate attorney? Realty Works can give you names of attorneys who offer successful closings.

Step 6: Make an offer and sign a Purchase Contract

If you're comfortable with the home, make an Offer to Purchase, including an "earnest money " deposit. You should make sure the Offer allows you to get your money back if a professional inspection reveals problems with the house, or if you aren't able to get approved for a mortgage.

Step 7: Get professional inspections

Your Purchase Contract will permit you to have various professional inspections and will govern your rights if the inspections show problems. Before you make an offer and sign a purchase contract, ask your real estate agent or attorney which inspections are best for your area. For example, standard purchase contract forms often do not provide for radon inspections. Have the necessary inspections included as a contingency for your offer. Need a capable professional inspector? Realty Works can give you names of local inspectors who offer great service.

Step 8: Select and apply for a mortgage

Mortgage interest rates, fees and other terms can vary widely. Research what is available by calling several mortgage lenders or using the internet. When you have selected the mortgage terms that are right for you, apply for a mortgage loan at a bank or other lending institution.

Step 9: Final Walk-Through

A day or two before closing, do a final walk-through of the property to make sure there are no new problems. This may be a good time to have the seller show you how to operate major systems and appliances.

Step 10: Closing

Close the loan (also called "Loan Settlement "). This is also when you make the rest of your down payment, pay loan fees, sign all necessary legal documents, and get the keys to your new home.