Whether you are buying your first home or your tenth you go through the same basic steps when buying a home.

1. Gathering information

Most people now start the home buying process by gathering information online. In fact, 96% of home buyers used the Internet to search for homes in 2016. This process often starts months, and sometimes even years, before moving on to the next step. Buyers are better prepared than ever, but so much information can also be confusing. Having a real estate professional working with you to sort through it all and guide you through the process is more important than ever. In 2016 88% of buyers purchased their home through a real estate agent.

2. Selecting a Realtor – signing documentation
3. Selecting a Lender – getting pre-approved for financing

These two steps often happen pretty close to the same time. When you are ready to move forward you should have both…a Buyer’s Agent to represent you and help you find a home, and a lender to help you determine how much home you can afford and provide the financing pre-approval you need when you make an offer.

More than half of buyers last year found their Realtor through a referral from family and friends or used an agent they had worked with in the past. Realtors usually have trusted relationships with lenders they refer to their clients… and vice-versa, sometimes buyers start with a lender referred to them by family or a friend, who in turn connects them with a Realtor.

Buying a home is likely one of the biggest purchases you will ever make, and it is important to work with someone you feel comfortable with and can trust. That’s the reason so many people ask family and friends for recommendations. People are also using the Internet more and more in the selection process… getting to know something about different agents before meeting them in person, sometimes through testimonials or blogs such as this one. We have had new clients contact us saying they had been following our blog for some time, were ready to move forward and wanted us to represent them… they felt they already knew us!

4. Finding your home – identifying wants & needs, looking at homes

It is important to identify your wants, needs and priorities in a home as you start your search process to find the perfect home. How long it takes is different for everyone… it may be the first home you see or it may be the 40th. The typical homebuyer in 2016 searched for 10 weeks. However long it takes, most people search with their heads but buy with their hearts. You will usually know when you have found the right home for you… you will just feel it is right and know it’s time to move on to the next step.

5. Making an offer – negotiating & submitting earnest money if coming to an agreement

Your written offer to purchase a property will include such things as how much you are offering to pay, how much earnest money you are submitting as a deposit to be held until closing, how you plan to finance your purchase, when you want to close and take possession, and what contingencies your offer may have.

In a traditional transaction the seller usually responds to your offer within 24 hours and negotiations can involve multiple counter offers back and forth. If banks are the sellers it can take longer and they do not always negotiate…they may simply accept or reject your offer. With bank owned foreclosures you will usually have a response within a few days. With short sales you negotiate first with the seller as in a traditional sale, but it then must be submitted to the bank for approval that they agree to accept less than the mortgage amount due as full payment. That process usually takes 60-90 days but can take much longer, especially if there is more than one bank involved… the longest I have experienced is five months.

6. Inspection – usually takes place within a week of coming to an agreement

If your offer is contingent upon an inspection, you will schedule an inspector of your choice within the specified time frame and pay for it at the time of the inspection. Buyers usually go through the house with the inspector, it’s a great learning experience. You can also include radon, sewer and fireplace inspections as part of your inspection process. After the inspection you can accept the property as is, request that the seller fix or give financial compensation for certain items, or cancel the purchase agreement and have your earnest money refunded. In foreclosures and short sales you are buying the property in ‘AS IS’ condition, which means you usually have only two options… move forward or cancel your purchase agreement.

7. Underwriting – final mortgage loan approval & preparing for closing

Many steps take place after coming to an agreement, including property appraisal, title work and final approval of your loan… all of which are managed by your lender. You are responsible for locking your interest rate, securing property hazard insurance and arranging for certified funds or wire transfer of funds for closing.

8. Closing – usually 4-6 weeks after coming to an agreement

Your closing date is set as part of your purchase agreement. While closings usually take place as scheduled, know that there are some exceptions and it’s more common with foreclosures and short sales. In foreclosures, if the buyer causes closing to be delayed the bank charges a per diem penalty… if the bank causes the closing to be delayed, it’s just ‘too bad’!

Shortly before closing you will do a final walkthrough of the property with your Realtor to assure it is in the condition agreed to in your purchase agreement.

Closing is when you bring your money and sign the papers assuming your mortgage (if any) and transferring title to you… it’s when you get the keys to your new home! Traditionally present are the buyer, buyer’s agent, buyer’s closer, sometimes the lender, the seller, seller’s agent and seller’s closer.

Sharlene Hensrud, RE/MAX Results Buyer’s Agent

HomesMSP Team- SharleneJohnAngela Minneapolis-St. Paul Realtors


About Sharlene Hensrud

I love what I do! Highly insightful, analytical and creative, there is nothing I love more than helping you find the right solution for your real estate transition. My mission is to serve my clients with honesty and integrity, exceeding their expectations in service and support… and to help others by donating a portion of every transaction to Habitat for Humanity.

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