By Matt Modesitt, Redfin agent in East Montgomery County, MD
Buying a home can be intimidating, especially for the first time. However, when you have the information you need to make informed decisions, you can lower your stress. That’s why Redfin offers regular classes that cover the various aspects of the home buying (and selling) process. Here are the basic home buying steps I discuss in my classes, but if you want to dig in further, consider joining one in your area.
Know the process
There are four big phases in the home buying process: research, search, offer, and closing. Some parts are more detailed – like home inspections and mortgages – and we hold separate classes on those topics. Understanding this basic timeline of buying a home will help you get organized and will set your expectations.
Assess your needs and research
You might have friends or family encouraging you to buy, but evaluate what is going on in your life. Are you planning to stay in a home for at least five years, and have you saved up at least 3.5 percent for a downpayment and up to 2 percent for closing costs? Discuss your financials with several mortgage brokers as you shop for the best rate. It is best to decide on a lender and get a pre-approval letter before you begin house-hunting in earnest. Finally, interview agents and choose one who you’ll enjoy working with and who understands your needs.
Start using a real estate site and download home search apps to stay up on all the latest homes for sale. Use a local brokerage site like Redfin that has access to the Multiple Listings Service (MLS) feeds. Brokerage sites show new listings seven to nine days faster than national portals and correctly remove homes no longer for sale. Utilize features like searching by school, home affordability calculators, and instant email alerts to help you see listings faster and to search for criteria that are important to you. Once you see some homes you like, schedule tours with your agent to see them in person.
Make an offer
If your tour goes well, discuss the details of an offer with your agent. Your agent will pull neighborhood comparables (or ‘comps’) to assess whether the price seems high, low, or fair for the neighborhood. Then, decide on an offer price and begin to draft the offer documents. It is common for the seller to counter, particularly if you offer below asking price. If all goes well with the negotiations, you and the seller will eventually agree on the offer details, resulting in a mutual acceptance.
Close the deal
Once you and the seller have agreed on the offer details, there is still a lot of paperwork to be done. First, you will transfer earnest money to the seller’s escrow account. Then, schedule your home inspection (if you waived your inspection, you probably already scheduled this before you submitted your offer). A title company will also review the home’s title history to make sure there are no outstanding liens on the property. Upon finalizing your loan application, your lender will order an appraisal of the property to ensure it is a sound investment before giving you financing approval. After that comes the fun part: signing the closing documents and getting the keys to your new house!
If buying a home sounds complicated, don’t fret. You will learn as you go, and you will have a dedicated agent helping you. Sign up for a Redfin class in your area: they offer a lot of great information, are free, and include dinner and drinks! See you in class!