Tools for Buyers
The Homebuying Process
For many people, a home is the largest single purchase they will make, and one of their biggest assets. A smooth homebuying process takes planning and the right professionals Real estate agents, lenders, lawyers and others will be part of your process.The buying process involves several steps, from finding a REALTOR® to making an offer to closing the deal.
Buying and selling real estate is a complex matter. It involves contracts, inspections, financing, valuation, pricing a property to sell, and negotiations. Reduce your risk and chance of complications by hiring an expert. NEXUS REALTORS® know the local area. Find one to help in your home search today.
You’ll have more success getting sellers to accept your offer when you prove that you have the financial ability to go through with the transaction. "Preapproval" means a loan officer has reviewed your credit files and believes you can readily qualify for a given loan amount. The lender will provide a preapproval letter, which shows your borrowing power. You can visit as many lenders as you like and get several preapprovals, but keep in mind that each one carries with it a new credit check, which will show up on future credit reports. Although not a final loan commitment, the preapproval letter can be shown to listing brokers when bidding on a home. Search a list of NEXUS affiliates who offer mortgage financing.
There’s a lot to consider when finding the right home – amenities, neighborhood, school districts, commuting distances, lot sizes, tax costs, interior dimensions, and exterior finishes. It’s important to identify your priorities and discuss them with your REALTOR® so they can help you find the best fit. For most, a home purchase is long term. It’s important to think ahead to what you’ll need in several years. If you'll need a larger home, maybe now is the time to buy a bigger house rather than moving or expanding in the future. Search for homes in our area.
Negotiating an offer on a home is one of the most complex, personal and variable aspects of the homebuying process. A REALTOR® is key at this stage. They know the local market and have the experience to negotiate the best deal for the home you want.
How it Works: A seller places their home on the market at an established asking price as well as other terms. In effect, this is an offer. At this point, you have three choices:
(1) accept the seller's offer and create a contract;
(2) reject it and not make an offer; or
(3) suggest different terms and make a counter-offer. If you choose this last option, the seller may accept, reject or make a counter-offer.
How to Make an Offer: In a typical situation, the REALTOR® will present your offer to the owner and the owner's representative. Your offer includes price and terms such as closing date, number of inspections, etc. Terms have financial implications so don’t overlook them. Seller’s Actions: The seller now has the option to accept the offer, reject it or make a counter-offer. Because counter-offers are common (any change in an offer can be considered a "counter-offer"), it's important for you to remain in close contact with your REALTOR® during the negotiation process so that any proposed changes can be quickly reviewed.
Unless you’re paying cash for your home, you’ll need to finance the purchase. There are thousands of loans available from a variety of lenders. The mortgage you choose will likely be determined by at least several key factors:
- How much down payment?
- How's your credit?
- Are you a first-time buyer?
To obtain a loan you must complete a written loan application and provide supporting documentation, including recent pay stubs, rental checks and tax returns. During the prequalification procedure, the loan officer will describe the type of paperwork required. Search our list of NEXUS affiliates who offer home financing.
Homeowners insurance will be mandatory if you finance your purchase. It also protects you in the event of catastrophe. There are various forms of insurance associated with home ownership, including these major types:
- Title insurance. Purchased with a one-time fee at closing, title insurance protects owners in the event that title to the property is found to be invalid.
- Homeowners' insurance. Homeowners' insurance provides fire, theft and liability coverage.
- Flood insurance. Generally required in high-risk flood-prone areas, this insurance is issued by the federal government and provides as much as $250,000 in coverage for a single-family home plus $100,000 for contents.
- Home warranties. With new homes, buyers want assurance that if something goes wrong after completion the builder will be there to make repairs.
Home warranties for existing homes are typically one-year service agreements purchased by sellers. In the event of a covered defect or breakdown, the warranty firm will step in and make the repair or cover its cost.
Search our list of affiliates to find an insurance company.
The closing process, which in different parts of the country is also known as "settlement" or "escrow," is increasingly computerized and automated. In many cases, buyers and sellers don't need to attend a specific event; signed paperwork can be sent to the closing agent via overnight delivery.
What to expect: Settlement is a brief process where all of the necessary paperwork needed to complete the transaction is signed. Closing is typically held in an office setting, sometimes with both buyer and seller at the same table, sometimes with each party completing their papers separately.
What you need to do: Before closing, buyers typically have a final opportunity to walk through the property to assure that its condition has not materially changed since the sale agreement was signed. At closing itself, all papers have been prepared by closing agents, title companies, lenders and lawyers.
This paperwork reflects the sale agreement and allows all parties to the transaction to verify their interests. For instance, buyers get the title to the property, lenders have their loans recorded in the public records and state governments collect their transfer taxes.
Congratulations, you’re a homeowner!
For most owners a home is the largest single asset they hold, so it makes sense to protect that asset. Many owners take a photo or video record of the home and their possessions for insurance purposes and then keep the records in a safety deposit box. Your insurance provider can recommend what to photograph and how to secure it. You want to maintain fire, theft and liability insurance. As the value of your property increases such coverage should also rise. Again, speak with your insurance professional for details.
Lastly, enjoy your home. Owning real estate involves contracts, loans, and taxes, but ultimately what's most important is that homeownership should be a wonderful experience. Enjoy!
REALTOR® is a brand trusted by consumers across the country. REALTORS® are members of the National Association of REALTORS® and are held to a higher level of conduct that other real estate professionals. REALTORS® adhere to a strict code of ethics and conduct.
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