Finding information about the home buying process online can be daunting because you might find everything to be very fragmented. We wanted to collate all the steps as a high level for you to understand easily so that if you wanted to read more about each step, you would be able to do so.
Search
The home buying process begins with searching for the right home. We’ve talked about how the role of an agent is changing and how the emergence of tech in real estate have changed how one would approach the search process. Before, an agent’s primary role was to inform you about which properties to consider, but a lot of this information has been made accessible on search sites like Zillow, Redfin, Realtor.com, etc. By filtering for your needs using criteria like a neighborhood, number of bedrooms, distance from public transportation, you can easily create a list of properties you’d want to visit.
Open Houses
The next natural step is to want to visit these homes to take a closer look at them. You’d want to consider how the homes look in comparison to the pictures posted online, whether you like how convenient it is to get to if the neighborhood park they mention is one that you like etc. In most cases, you would contact your buyer’s agent to help you schedule, or might directly reach out to the seller’s agent to check if there’s an open house available.
With Hutsy, we let you schedule directly online from the list of properties you’ve saved while searching.
Financing
Around this point, you’d want to consider how you will be financing your purchase. If you’re looking to make a cash offer, the rest of the process also becomes a lot easier. If you’re looking to find a mortgage (and most people do), you would need to find a lender you’re willing to work with and get a pre-approval letter. Usually, your buyer’s agent will recommend lenders in the area for you to take a look at. There are also online alternatives like Better.com.
Hutsy’s process recommends the best lenders in your neighborhood for you and directly integrates with them so your process is much smoother and simpler.
Offers
With the pre-approval limit issued by your lender, alongside an offer package that you would prepare with your buyer’s agent (or by yourself), you would place an official offer on the properties you’re interested in purchasing.
This process can be as simple as winning your first offer or can ensue with a ton of negotiating and back-and-forth, depending on the property, your offer and the market at that time.
Offers can, and usually do, include contingencies, namely an inspection contingency and a financing contingency (assuming a mortgage financing). A contingency is an option for the buyer and seller to back out of the offer in the case that the inspection report comes back nasty, or if the buyer’s mortgage financing falls through.
Hutsy helps you easily create and manage all your offers so you can stay on top of your process.
Closing
Earnest Money
At this point, you would have won an offer, and will be entering the closing process. In order to put weight behind your offer and commitment, you would transfer earnest money to the seller/title company (a deposit that will be applied to your closing costs if the process goes through. It may or may not be returned to you if the process falls through, depending on how you negotiate for it). This amount is usually 1%, or $1,000, whichever is larger.
Title Search/Policy
The title search process is an important one, to determine if there are any liens (dues with regards to the property) or ownership disputes with the property. As a buyer, you would want to make sure that the title search comes back clean to prevent any future legal hassle (in the case that there ARE ownership disputes and the property gets sold to you, and the seller gets off the hook but you are now responsible for dealing with such disputes).
In the case of mortgage financing, the lender will almost always insist on a title search, as well as title insurance. Title insurance insures the owners of the property against future ownership disputes.
The title search and insurance can be shopped around for different levels of service and prices.
Inspections
The seller usually would want to get inspections done, to ensure that they can justify the price of their home, but in the case that they haven’t already arranged for this, it is in your best interest to get an inspection done. An inspector is an independent third party who holds no vested interest in the transaction (and therefore usually charge a fee based on the size of the home), that checks the home manually and generates an inspection report listing any defects with the property.
Usually, your buyer’s agent will recommend a couple of options for inspection companies/inspectors for you to choose from. At Hutsy, similar to the financing step, we recommend at least 3 of the best inspectors from your neighborhood and integrate directly with them to make this process very simple.
Final Closing
At this point, a bunch of documents will be signed, transferred amongst the different parties, your lender will underwrite your mortgage loan, and if all goes well, you will have keys to your home shortly after.
Since this is the final step, you would want to make sure everything is in order. You would pay the remaining closing costs (ranging from property insurance, HOA fees, and mortgage insurance to flood insurance).
You would want to keep all your documents well organized and in a safe place, as you would need them for a refinance, or when you were to sell your property.
At Hutsy, we help you easily navigate and manage the whole closing process (and the entire transaction), starting from searching for properties and scheduling open houses, to creating, viewing and signing documents, to make your home buying process stress free!
