For many people, purchasing a home is one of the biggest decisions (emotionally & financially) of their life. It can provide comfort, stability, financial security, and so much more. However, it can be a very involved, daunting process! Today my goal is to clear it up just a bit by sharing 8 key steps to buying a home.
Keep in mind that every individual and their situation is different, and laws/processes can vary state by state, so these steps might fluctuate slightly.
1. Connect with a real estate agent
When you Google ‘how to buy a house’, you might see this step listed more towards the middle of the process. Personally, I see SO much benefit in making this connection as soon as possible. And that’s because if you choose a great agent, they will be there to guide you through all of the following steps through (and even after) the day you get the keys to your new home. Your agent should provide advice, guidance, context, education, resources, and more when needed. For example, a crucial part of purchasing a home is obtaining the financing necessary to do so. If the thought of applying for a home loan is overwhelming and you don’t know where to start – this is normal! Your agent can connect you with trusted local lenders who should explain all of it to you in detail.
2. Get pre-approved for a home loan
If you’ll need to get a mortgage to buy a house (as most people do) then you’ll want to work with a lender to get pre-approved for a home loan before house-hunting seriously. It is fairly standard to include a pre-approval letter from a lender with any offer you make on a home, which is why it’s a good idea to have it before you start looking. You’ll also have a better idea of what you can afford this way. Scrambling to get approved at the last minute can be doable but isn’t very fun! Note that a pre-approval is one step further than what’s called a pre-qualification because the information is actually verified. You can read about the difference in more detail here!
When you work with a lender they will look at your employment history/status, tax returns, assets, debts, credit score, retirement accounts, etc. They’ll review that info as well as current interest rates, how much $ you have for a down payment/closing costs, and more to let you know the maximum loan amount you qualify for (and therefore the maximum purchase price). Different mortgage lenders have different mortgage options, so some people like to talk to a few different lenders.
3. Determine your main home criteria
Spend time thinking critically about what you want out of your future home AND neighborhood. Choose roughly five “must-haves” – the elements you can’t live without. Maybe it’s a garage, a large yard for your dogs, at least two bathrooms… you name it. Then pick five “nice-to-haves” – ex: a view, open floor plan, hardwood floors, etc. Keep in mind which items can physically be removed/added/changed semi-easily and which can’t (your agent should be able to help you figure this out, or find contractors/vendors who can). Most importantly, realize that it’s a game of compromise. No home has it all!
Also think about your lifestyle. If you’re someone who hates yard work and doesn’t want to pay a landscaper, consider a townhouse or a home with a small yard. If you want to be able to walk to and from dinner, think about looking for a home close to restaurants and shops. Planning on having kids at some point? Maybe research the quality and reputation of the school district. Take things like this into consideration so you don’t end up making a choice you regret!
4. Start the search
Time for the real fun to begin! Although there’s a pretty good chance you’ve already been checking Zillow/Redfin like a hawk, you can now search with more confidence. Your agent should also be able to set up a search for you within the local MLS (Multiple Listing Service) where homes are listed for sale by listing (seller’s) agents. I always get my buyers setup with auto-emails from the MLS immediately after our initial meeting so they have the chance to see what comes on the market before it filters out to Redfin and other sites. It’s a great way to get a head start!
5. Visit open houses + tour with your agent
The next step in the buying process is to go out and actually tour the homes that catch your eye. You can visit open houses on the weekends as well as tour with your agent as needed. In the greater Seattle area, most listings currently require buyer’s agents to make an appointment to privately show the home to their clients. This was initiated more strongly during COVID and it’s looking like it might stay this way for awhile. Your agent could take you on a tour of around 4-8 homes in a day, show you one at a time, or do a combo. It’s whatever works with your schedule!
6. Conduct due diligence (research + inspect)
In my opinion, it is absolutely crucial to fully understand what you’re signing up for when you buy a home. Your agent should provide you with context/guidance at this stage so you know what to look at/for. That said, the liability and responsibility ultimately falls on buyers to do their due diligence (at least in Washington).
A few items you might review include the property history, environmental impacts (is the home in a flood zone?), easements (is there a shared driveway?), local school info, and any liens against the home. If it’s a condo or co-op, check out the HOA information, bylaws/rules, budget, and meeting minutes. A professional home inspection is strongly advised, mainly so that you’re aware of any issues with major systems like the foundation, roof, electrical, and plumbing.
I have this listed before the offering step because in the type of market we’re in now it’s common for it to play out in this order. Many buyers are doing their research and getting a home inspection prior to offering, so that they can waive all of those contingencies within their offer. This is a competitive approach because it lowers the risk that they’ll back out before the sale closes, therefore making the seller feel more comfortable. On the flip side, in a market with more inventory (or in a situation where a home has less buyer competition), you’re more likely to have success including an inspection contingency in your offer.
7. Offer + (hopefully) reach mutual acceptance
When you find a home that you love, your agent will work with you to create a strategic offer. You’ll weigh factors such as how much competition is expected, what the sellers are looking for/what their motivation is, what price other comparable homes in the area have sold for recently, and more. This is where your agent should really do some digging so that you have the best odds of winning the house!
After your agent submits your offer, one of three things (usually within a day or so) will happen. 1) It could be rejected and you’d go back to the drawing board. It’s ok if this happens! Sometimes buyers have to offer a few times before finding success. It just means there’s a better home out there – trust me. 2) The seller could accept your offer as-is, signing it and therefore creating a mutually accepted purchase and sale agreement. If that happens – hooray! Or 3) the seller might send a counteroffer, altering some of the terms that you initially proposed, and then it is up to you to reject/counter/accept that counteroffer.
8. Close + get the keys!
After mutual acceptance is reached the house goes into “escrow” – the chunk of time it takes to complete the remaining items in the buying process. During this time leading up to closing (usually around 30 days after mutual acceptance), the escrow company (a neutral third party that holds all money and documents) and your mortgage lender will work together to make sure everything is in order. Your home loan will need to be officially funded, you’ll send funds for your down payment and any additional closing costs, sign lots of paperwork, and maybe do a final walkthrough of the home. When the county has recorded the sale and any proceeds are available to the seller, it’s deemed closed and the keys should be yours! When you move in is up to you. Congrats!!
If you have any questions at all about this post or buying a home in general, please don’t hesitate to reach out! Whether you’re wanting to buy now or six months from now, I’m here to help buyers in the Seattle-Tacoma area and beyond in anyway I can.
Sorelle Hardin | Residential Broker
Windermere Real Estate Co.