The home buying process - A road map step-by-step...

Let's face it - many homebuyers don't have hundreds of thousands of dollars sitting around to purchase a home.  Many buyers will need to obtain a mortgage to purchase.  And it's important to know your purchasing power.  For that, you'll need contact a loan officer to qualify you on how much purchasing power you have.  It's helpful to get quotes from several different loan officers.  Transactions typically can run smoother with a local lender from our experiences.  From there, you can...

Don't leave this opportunity on the table if you are buying in today's market!  With a shifting market comes opportunity for buyers to be able to purchase homes and use grant funds.  Ask and research!  What grants do you qualify for?  What grants are available to you?  What type of down payment assistance is available to you?  Grants and down payment assistance can be used to do things like reduce your cash-to-close, reduce your monthly mortgage payment and buy down your interest rate.   Combining the first and second steps leads you to...

On your purchasing journey, you are going to need to assemble your purchasing "team".  The core of that team is going to be your REALTOR.  Your REALTOR will be able to help you assemble the professionals you will need to complete your purchase transaction - such as a home inspector, insurance agent, settlement agent, surveyor (if you choose to have a survey - it's HIGHLY recommended).  In addition - you and your REALTOR can set up a search on what you are looking for, based off of your purchasing power determined from steps 1 and 2.

Now you are ready to search for that home of yours!  And if you followed steps 1, 2, and 3, you are ready to write that offer knowing what you are getting into from the purchasing side (inspection side can be a little different).  Your offer will likely contain a deposit amount held in escrow - and this amount is one of several pre-paid items that you'll need to account for during the process.  When you write your offer, you should make it contingent upon a home inspection and a satisfactory termite inspection.  If the market continues to shift towards a buyer's market, things like a home warranty along with asking the seller to pay a certain dollar amount towards closing costs may not be out of the question either.  If you are able to negotiate some seller-paid closing costs, written correctly into the offer could allow you to do things like buy down your interest rate potentially saving you thosands of dollars down the road.  Assuming you are able to negotiate a home inspection period into your offer and get it under contract, the next step would be...  

If you are able to negotiate an inspection period into your offer, the next step would be to get the home inspected by a licensed home inspector (side note:   All home inspectors in the Commonwealth of Virginia are now required to be licensed).  Schedule your home inspector to do this inspection during the time frame allotted in the contract.  At the home inspection - BE ACTIVE IN THE INSPECTION.  Bring a flashlight, a note-pad, and don't wear your best clothes as you'll want to go everwhere the inspector goes!  Follow the inspector around as he/she is inspecting items in the home.  Ask questions about what they are inspecting.  Ask how certain systems function.  Ask about preventive maintenance items along with best practices.  Remember - the home inspector is working for you!  At the end of the inspection and assuming you negotiated a repairs request - you and your REALTOR will need to type up a repairs request addendum for presentation to the seller.  The repairs request is a negotiation item as the seller typically will have the option to fix the items, offer a repair credit, or refuse to fix the items altogether.  It's also recommended to get other inspections based on the home inspector findings and to also obtain a survey.  It's interesting what things can be found on a survey.  Every situation is going to be different.

Once your home is under contract, you will need to make formal loan application with your loan officer.  At this time, you will need to provide your loan officer (if you haven't done so already) tax returns, bank statements, paycheck stubs, and any other pertinent financial information.  You'll be required to sign a stack of loan documents as well.  You'll be given what's called a Good Faith Estimate (GFE) that will give you a breakdown of your costs, estimated monthly payment, etc.  At this time, your loan officer will likely collect fees from you for an appraisal, title search, and credit report.  These items (also prepaid items) can vary in costs, but your loan officer can give you an idea of what these items will cost if you ask ahead-of-time.

Depending upon your loan type, you will be required to pay for an appraisal on the property.  An appraisal is done by a qualified appraiser to determine the value of the property.  This valuation protects the mortgage company in terms of what they can lend on the property.  Certain loan types require the property to be in habitable condition (ex:  VA loans) and can have condition requirements as well that would need to be remediated if out of compliance (For example - Buyer obtaining an FHA loan and the home has chipping paint.  The chipping paint would need to be remediated prior to settlement for the loan to be in compliance with FHA lending standards.).

If repairs were negotiated between the buyer and the seller, the buyer would want to re-inspect the property to ensure the repairs are done properly.  Home inspectors can be hired to re-inspect to ensure the repairs have been completed properly.  Also - it's a great idea to do a re-inspection right before you go to settlement - to ensure that the property is in the same/similar condition.  During this final inspection, ensure that all systems (HVAC, water/sewer/etc.) are working properly just before you go to....

This is the final step in the purchasing process.  At this point, the buyer's loan has been fully underwritten/approved and settlement is ready to occur.  The settlement agent will make an appointment with you to come to their office (or some offices may do virtual closings as of now) for you to sign all of the documents that allow you to purchase the home.  You'll need a copy of your driver's license/ID card along with the settlement amount given to you by the settlement agent - usually in the form of certified funds.  As you go through the documents, the settlement agent will give a brief description of what you are signing.  Once you sign the last document - settlement is complete and unless there is language to the contrary in the purchase agreement, you are now a homeowner!