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Reach out to an agent first
Most buyer’s agents will schedule a one hour buyer consultation with you for free. You will have the opportunity to ask questions and get a feel for the agent. The agent is also sizing you up to see if you are really ready to purchase a home. Once you choose an agent work exclusively with him/her. Most agents work with a few lenders. If you don’t already have a lender the agent can supply you with the names of at least three for you to call.
Pre-approval with a direct lender
Critical first step in looking for a new home. What can you afford? What’s your credit score? Are you ready and able to purchase a home? As a buyer, you need to know how much home you can afford in order to secure a mortgage loan. This requires a Lender to look at your credit, liabilities and assets in depth. Cooperate with the lender and get them paperwork quickly
Get your financial house in order
You need to plan for purchasing a home. Purchasing a home is a major life event that requires lots of planning. Have you maintained your credit to qualify? Do you have money saved up for a down payment? Do you have savings for once you are in the home and something needs fixing or updating?
No large purchases while in the loan process
You have a ratified contract for your new home. You have been thinking about how to decorate the home and start looking at furniture advertisements. There’s a sale at your favorite furniture store. STOP! Don’t do it…don’t make any large purchase, apply for credit or spend any of your savings. The lender provided you with a pre-approval based on your credit at the time of application. Don’t do anything on credit. This means no new car or motorcycle. You can of course pay down debt but under no circumstances should you acquire new debt. Also, if you pay debt off do not close the account until after you settle on your new home. And no new credit cards thinking it won’t show up for 30 days or so…the lender will pull your credit a week or so before your actual settlement date. This may disqualify you from loan approval.
Don’t change jobs while in process
Stability is key here. If you have a chance for a new position making more money hold off until you have settled on your home. The lender is looking for a minimum of 2 years of employment with your current employer.
Have a home inspection
This step is extremely important. You have a ratified contract, and you think this is the house for you. Your loan is in progress. Have a home inspection to insure the home doesn’t have any “surprises” that you will have to deal with. Expect that the home will have a few needed repairs but you want to have some assurance that the roof isn’t going to fail as soon as you move in or that the HVAC system will stop working. After the inspection, your agent will draw up an addendum with a list of the repairs needed to present to the seller. The seller has three choices, agree to the addendum 100%, agree to parts of the request or deny it all. If the repairs are minor like leaking faucets and a stopped-up tub you can feel comfortable moving forward. However, if there are electrical issues, past flooding issues, or cracks in the foundation you may want to move on to another house. In any case you will be made aware of existing issues and can make an informed decision.
Make sure that your agent includes a contingency clause for the inspection and a time frame in which you can void the contract without losing your earnest money deposit if an agreement cannot be reached by both parties. Getting a home inspection can assist you in making a good decision.
In summary, this is a very short list to give you a glimpse into some of the actions needed to purchase a home.