After you find the house or condominium you want, you’ll need to make an offer. Your real estate agent will help you develop the offer and present it to the seller.
The asking price and selling price of homes are often different. When you make your offer you will propose a purchase price, the time frame in which you’d like to take ownership, the amount of your down payment and any conditions that must be met prior to sale (such as required repairs or inspections).
You will be required to make a partial down payment deposit often called an “earnest money” deposit to show your offer is a serious one. Your agent will be able to advise you on how much of a deposit you may need to make.
Sometimes an offer is accepted immediately. Sometimes you may need to negotiate. Your real estate agent will be your go-between with the seller’s agent during negotiations.
When your offer is accepted by the seller, you reach a sales agreement. This means that both you and the seller have defined the price and terms for the sale and a sales contract is drawn up. Once you and the seller sign it, the contract is a legally binding document. This process is referred to as “going into contract.”
Have a reputable professional review the terms and conditions of the sales agreement before you sign. Ask questions about anything you don’t understand. Never sign a contract that’s blank or incomplete.
After your contract is signed, your next step is to arrange for a home inspection to identify any repairs the home may need. You’ll want to know as much as possible about the condition of the house. Major repairs can become a negotiating point with the seller.
Your real estate agent will be able to provide you with a list of professional home inspectors who can offer you their opinion. Your agent can also advise you about arranging any special inspections that may be needed for things like termites, lead paint, or soil contamination. Make sure your new home will be healthy and safe for your family.
Some sales agreements specify that the offer is “subject to inspection” — giving the buyer the opportunity to back out of the deal if the inspection results are not to their satisfaction.
Your lender will have the home appraised to determine its fair market value. This is to confirm that the home is worth more than your loan amount.
The official notification from your lender that your home loan has been approved, including a confirmation of the amount.
Finalizing the sale, also known as closing, is the last step in your home purchase. At your closing, ownership of the property is transferred from the seller to you. It’s a formal meeting with a closing agent, a professional who prepares the official documents related to the sale. Depending on where you live, this individual is usually an attorney or title agency representative. Your real estate agent and the seller’s agent may also attend.
When you are ready to schedule your closing date, all involved parties will be contacted to arrange for the closing to take place at a convenient time and location. The closing procedure and associated fees vary depending on where you purchase. You will be notified of the exact amount you need in order to close and any additional documents you may need to bring.
Read about typical closing costs