Buying Process

Make an Offer

So, you've found a house you want to buy. Congratulations! Now you need to decide how much you're willing to pay to make it yours.

Your real estate agent should be able to give you a list of similar homes nearby that have sold recently, and for how much. Although you can't directly compare the home you want with the homes on the list without ever having been in them, you can use the list of comparable sales to get a general idea of the neighborhood's price range.

In addition to sale prices for other homes, there are several ways you can determine a good amount to offer:

The condition of the house. Is the home in move-in condition, in need of paint and other cosmetic improvements, or a fixer-upper that needs some real work?The market. If you are in a buyer's market-where there are more homes for sale than there are people to buy them-prices are probably stable or falling. If you are in a seller's market-where there are more buyers looking for homes than there are homes for sale-prices are probably moving upward.Your threshold. If you've gotten a credit pre-approval, you know how much you can borrow for your home purchase. Of course, you may not be comfortable paying as much as you've been approved to borrow, so think carefully about your financial situation before making an offer.

Get a Home Inspection

When you are making what is likely the largest investment of your life, you should know as much as possible about what you are buying. That's why it's a good idea to have a home inspected before you make your purchase.

At a minimum, the inspector should examine the following:

  • Exterior structural components, including the foundation, roof, siding, and chimney.
  • Interior structural components, including the basement or crawlspace, attic, flooring, and ceilings.
  • Major systems, including heating, cooling, plumbing, and electrical.

You should make every effort to be present during the inspection so that you will have an opportunity to ask questions and see first-hand what the inspector looks at. You should receive an inspection report with descriptions, and possibly photographs, of any problems with the home.

Close the Deal

You've found your home, agreed on a price with the seller, had the home inspected, and now you're ready for the closing, where you will officially take ownership of the property. Welcome to the end of the home buying process-and the beginning of your homeownership journey.

When to schedule your closing

The closing date will depend on when the seller is ready to move out, when you are ready to move in, and when all of the mortgage details have been finalized. You may want to request a closing date near the end of the month in order to minimize the amount of interest you have to prepay on your mortgage.

What happens at closing

Despite all the new technologies that are streamlining the mortgage process, the closing phase remains very paper-intensive. You will have to review and sign a hefty stack of documents, some of them in duplicate and triplicate. You will also have to pay for any closing costs, including:

  • Lender fees, such as origination points and discount points
  • Third-party fees for services not provided by your lender, which may include a settlement fee, title insurance, appraisal fee, credit report fee, and attorney's fees
  • Prepaid items that must be paid to your lender in advance, such as prepaid interest, hazard insurance, and deposits to set up an escrow account