Buying a house can seem overwhelming, especially for First Time Buyers. Use our outline as a guide & take the process one step at a time.
How to Buy a House - Step by Step
Step #1 - Choose a Broker
When choosing a Seattle real estate broker, plan to meet with 2 or 3 different real estate brokers to find a person you feel comfortable with & confident in their abilities. You will be spending time with this person, so you need to trust and respect this person. They are helping you through a major financial transaction, so you’ll want to ensure they are capable & professional as well as have the support of their manager.
Here are a few questions you should ask a broker at your initial meeting:
How many years of experience do you have in this industry?
What is your selling experience in my community?
What services will you provide for me as my agent?
Can you please explain how you are paid?
What paperwork is involved now & throughout the transaction?
What is my contracted timeframe for using you as my agent?
Once you have chosen an broker, stick with them throughout the process as long as you see them working hard for you. Depending on the market, your financing & a variety of other factors, it could take up to 6 months to complete a real estate transaction. Establishing strong, specific criteria from the on set will ensure a positive, financially sound decision is made.
2. Research Mortgages & Pre-Approval
Plan to meet with at least 2 mortgage brokers, compare rates & terms and make sure you understand each thoroughly. Your Real Estate Broker can refer you to a few they have worked with in the past or ask friends or family for referrals.
Do your homework about loans, you will save time and money. There are thousands of loans out there to choose from; The loan officer will be able to serve you best if you know the answers to these questions:
How much do you have available for a down payment?
What is your approximate credit score?
Is this your first home?
Once you’ve determined what loan program is best for you, you’ll need to apply. Loan applications require specific financial documents including pay stubs, rental checks and tax returns. Get your documentation together & be ready to present the past 2 years financial statements for yourself & your spouse/co-applicant.
Once pre-approved, you know your price range. Keep in mind, just because you are approved up to a certain amount, does not mean you are required to spend that amount! It can be tempting, but you also need to attend to your lifestyle, your long term goals & your comfort level.
Further Reading on the Importance of Pre-Approval
Take your time to understand what's going on with your financing. Talk with your Mortgage Broker and your Real Estate Broker, understand your options, and the pros and cons of each option. Purchasing your home is one the biggest decisions of your life, there is no reason to rush… an extra 3 weeks is nothing in the scheme of things! Our next step is exploring neighborhoods.
3. Explore Neighborhoods
Its tempting to stick with the neighborhoods you know & love, but try to explore outside your comfort zone… just to see whats out there! Take into account your commute, how long you plan to live in the home & your longer term family goals. Check out crime rates & schools. Check city planning, are any trains, shopping centers, major highways, etc going in?? And more importantly how do you feel about that?
Walk around during the day & evening to get a true sense of the neighborhood. Check out the local parks, grocery store, restaurants, gyms, where ever you plan to go in your new neighborhood… better to figure out if you like the area before buying the house!
Further Reading on Location Diligence
Now you are equipped with a price range & location. Next, we’ll narrowing down your buying criteria.
4. Set Your Buying Criteria
This is usually the most exciting part. Sit down, alone or with your buying partner & determine what specifically the house must have. Common must haves are number of bedrooms, number of baths, lot size, garage, and amount of work needed.
Identify a few nice to haves. Items you’d like, but are not deal breakers if you don’t have them. Common items here are usually items you can build or purchase later to add to the home value such as covered patio, finished basement, garden boxes, etc.
Finally, define what the property must absolutely not have. The deal breakers; In other words, if the house has this, we are not buying it. These are generally items that are unchangeable, such as located on busy street, split level house or other layout configurations, etc.
Further Reading on Setting Buying Criteria
Okay. Now you know everything you want & are fully equipped. You are pre-approved, know your desired price range supports your lifestyle & long term goals, you know what neighborhoods you want to live in (for sure), AND you know what you must have, would like to have & what you will not consider. It’s time to...
5. Start the Hunt
Provide your final buying criteria worksheet (or worksheets) to your broker (chances are you’ve already been in conversations already). Your broker will set up a custom search for you, as soon as a property comes onto the market that meets your criteria, you will be notified via email. At the same time, your broker will be networking & searching for off market deals.
Set up regular day/times for showings, such as every Tuesday & Thursday between 4 & 6pm or whatever time works for your schedule. Your broker will research property history & schedule showings with the seller as appropriate. Having the set
day/time will save you both time by not needing to coordinate every week
While you are waiting for the right property to come along, get familiar with how a real estate transaction goes from Offer Submitted to Close. There are a lot of moving parts and often, events and communication happen very quickly. Be prepared for the big moment.
Further Reading on Making Real Estate Offers
6. Make & Accept Offer
It will feel weird, but the house will come up. It will be in your desired neighborhood, the right price range & meet all of your criteria. It sort of feels like magic, but trust us, it happens everyday.
Your broker will write up the offer for you & present to the listing agent and/or seller to
represent your interests. Keep in mind, every offer is not accepted & depending on the market, you may write many offers. Additionally, it could get accepted & you may be advised to back out due to the inspection or other concerns. There is an old saying, “don’t get excited until you have keys” This is a wise attitude.
Your broker will assist you with getting the property inspected & responding accordingly. This is the most nerve racking part of the process, stay patient & present. You’ve selected a rock solid team, know your criteria & are making a sound financial decision.
Further Reading on Home Inspections
7. Close & Celebrate
Once all contract items are agreed to & the bank has appraised & approved, your broker will ensure any repairs/ modifications are being addressed per contract. Funds will be released to escrow from the bank. You’ll be contacted by escrow to schedule signing & deposit your down payment.