Behind the scenes: buying the house

Hey again, home lovers, buyers, and curious readers! In case you’ve missed it (which I highly doubt, since I can’t stop writing or talking about it), my husband and I just made the biggest purchase of our lives—our first home.

I previously posted about the beginning steps of home buying, such as budgeting, saving, talking to a lender, and choosing and meeting with a realtor (steps 0 – 3).

Here’s my continuation of that guide, which includes the more technical steps of the homebuying process, and what to expect.

Step 4: Look at Houses

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After meeting with your real estate agent, they will put together a list of homes for you to look at in-person. We looked at three homes before finding our final match.

When looking, there’s a lot to take in. Be sure to ask questions and take notes as you go, otherwise things can blend together. Talk openly about what you like and dislike, so that your agent also is aware of your preferences. Usually the owner isn’t there, so you’re free to be vocal with your opinions. Sometimes, though, they are around (ours was), so we were careful to be complimentary—sellers are always free to reject contracts if they’re rubbed the wrong way.

Our experience was overall unique with COVID restrictions. Masks, limited touching, distancing practices, and lots of hand sanitizer became our new normal. When touring our now-house, our pregnant realtor was unable to join us inside out of caution. Be prepared to adapt as you go.

Step 5: Put in an Offer

If you’ve fallen in love with a home, the next step is to put in an offer.

Step 6: Under Contract

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As soon as you go under contract with your home, there are a new set of deadlines and tasks to do before you close and can officially call the house yours. Usually your realtor will have a calendar with important due dates and will help you as you go through this process. The average amount of time to be under contract is anywhere between a week and two months, according to Realtor.com.

Earnest Money

The first big purchase is earnest money, which is essentially a security deposit. It confirms the contract, and is usually made out to the title company and is due within the first couple of days. It’s usually about 1-5% of your total home offer, and is kept by the seller if you have to get out of the contract for any reason.

Title Commitment

We received a title commitment from our title company, pretty much just stating that they’d provide title insurance for our home down the road. This can come in different names, so check out this helpful article for more information.

Disclosures

The seller will provide you with a document of disclosures about the home. It goes over all of the quirks and facts known about the house—from broken windows to appliance dates, and everything in between. Some sellers are detailed, others are pretty brief. It’s meant to give you a better idea of the shape of your home.

Inspection

The inspection takes it up a notch so you can truly find out the condition of the home, from an expert. You’ll hire a company and pay out of pocket (ours was about $300) for them to come and inspect your home, inside and out. We went with a nice local company that could come right away, recommended by our realtor.

This is where you really get to know what’s up with your home, and any potential issues and necessary repairs. A poor inspection has lead some buyers to back out of the contract, just knowing that the home’s issues aren’t worth the future costs. In some cases, like ours, things were very positive with very little problems.

Usually the inspector will come to the house for several hours, and invites you to join when they’re almost done to do an overview and walk you through things. A few days later, they’ll send you a full, official report with photos.

Inspection Objection

After you have the official inspection report, you can create an inspection objection—where you ask the seller to fix or correct things that came up.

For example, we asked our seller to put latches on all the windows and paint a patch of our back exterior, and he agreed. If he had any disputes, we’d go back and forth through our realtors. It was pretty low-key for us, fortunately.

HOA Review

If your home has an HOA, you’ll be sent all the covenants and documents to review. This is definitely something to pay attention to—you don’t want to break rules and get fined, or realize that you’d be going over budget with crazy monthly fees.

Mortgage Documents

So, remember last time when I talked about applying for a loan? The process continues. There will be more documents and back and forth, things to sign, and likely more pay stubs to submit. They’ll contact your employer, an underwriter, and there might be an online educational class to take. You’ll talk with your lender about locking-in an interest rate, and if you’re in the middle of COVID, you’ll probably have to sign stuff about that, too.

Appraisal

Different from an inspection, an appraisal assesses the value of your property. It’s ordered and set up by your lending company, and you pay for it (ours was $500). They hire an unbiased professional to come and analyze the home and neighborhood.

The appraisal takes a lot into consideration, including a visual inspection, recent nearby sales of similar properties, current market trends, and aspects of the home (floor plan, size, amenities, etc.) to assess value.

They’ll also send you a report when it’s done. The lender will have access to this as well, and it will better inform if they are willing to issue a loan for the property (if the appraised value is way less than the loan amount, it doesn’t really make sense for them to pay more than its worth).

Homeowner’s Insurance

You’ll also have to get a homeowner insurance policy. I recommend going with your existing agent and reaching out to ask for a quote to add-on; your lender will need to know your policy number.

Final Walk-Through

A few days before closing, you’ll have the opportunity to walk through the home one last time before the purchase. Usually, the house will be empty and you’ll be able to see it up close and personal before signing all the papers.

Step 7: Closing

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You made it! After closing, the home is officially yours.

You’ll go to a neutral location (ours was at our title company), likely with your agent, lender, and representative of the title company. I say “likely,” because ours looked nothing like this. We dealt with COVID restrictions, which meant masks, our own pens, and only one other person in the room with us. Some people have social distanced in parking lots. It was surreal, but also very safe.

At closing, you’ll sign the final loan documents. You’ll need to bring your ID with you, along with a cashier’s check for the rest of your deposit. Several days before closing, you’ll be told how much exactly.

There will pages and pages of signing. Feel free to ask your agent any questions to go over the paperwork, as they are binding; however, you’ve likely seen most of the lending documents before.

After your hand has adequately cramped, it’s over! Just like that, you’re typically given the keys. As long as the seller has also officially signed, you’re welcome to head on over to your new house. It’s officially yours!

The Next Chapter

Now that the title is officially in your name, there’s lots to look forward to: a monthly mortgage payment, various DIY projects, renovations, and repairs, and transforming the space from a house into your home.

Enjoy, and congratulations!

 

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