Steps to buy your home in 2021
Step 1: Write down your needs and wants
Like most big purchases, it’s a great idea to think through what is important to you. When buying a home, you should list your needs vs. your wants. For needs, think about what you absolutely cannot live without, and for your wants, think about those nice to have items. Your needs vs. wants will be different from others. Think about what’s ideal for you for the next several years, or even the next 5-10 years if possible. Some items to consider: Bedrooms, bathrooms, functional spaces, green space, nearby communities and amenities, privacy, sunlight, and benefits of the town or city you’re interested in. As you explore homes, your needs and wants will become more evident. Pro Tip: Only allow those who will live at the home to control the needs and wants list. You can’t please everyone!
Step 2: If you’re getting a mortgage, get pre-approved
We get it! You see the perfect home online and your first instinct is to run out the door and take a tour. This would be the right move, but not unless you have a pre-approval in hand. Before you start touring homes, if you intend on buying your home with a loan a.k.a mortgage, it is imperative to get a pre-approval from a lender. This letter allows you to understand what you can afford so that you can spend time wisely on homes in the right price range. Pro Tip: Submitting an offer with a pre-approval is essential. Pro Tip: Simply get your pre-approval here.
Step 3: Tour homes, online and offline
We all do it, browsing through Zillow, Redfin, or Nuhom listings every morning. When you find a home you like, check out the details of the listing and do a 3D tour (if available). If your interest has peaked, schedule a private tour online. When touring your home, first try and envision yourself living there. Does it meet your needs and wants? This is your opportunity to note down what can be changed, renovated, modified, or painted over if needed. All of your findings can impact your offer decision-making as well. After that, feel free to unleash the Sherlock Holmes in you or lean on your Nuhom agent. Pro Tip: On average, Nuhom gives you back $7,500 in savings. Pro Tip: Take pictures and videos, especially of areas of concern you want to follow-up on. Pro Tip: Read any disclosures listed, they will help you learn more about the home.
Step 4: Strategize and make an offer, small deposit made
Everyone is different. In some instances you may find a perfect home within seeing your first few and decide to move ahead with an offer. Finding a home and preparing to make an offer can be both exciting and nerve-wracking, all at the same time! As long as your excitement is strong, this is OK! Once you’re ready, you can draft an offer and once you do you will be paired with a dedicated agent that has experience in your area and they will guide you the rest of the way. At the bottom of the Nuhom site, you can also request to receive a home evaluation to understand how to value the home you’re making an offer on. You will be asked to make a good faith deposit with your offer (which goes towards the purchase) and is only collected if your offer is accepted. Usually, this is about $1,000. Pro Tip: Make sure to upload a pre-approval. Also, a memo to the seller goes a long way in convincing the seller to accept your offer over others. Start your offer here. Pro Tip: Your Nuhom agent will work to get your offer accepted. Pro Tip: In a seller’s market, when the seller has much of the leverage, here are tips about how to proceed.
Step 5: Lock in your lender of choice
Congrats on your offer being accepted! You’ve achieved a big milestone in the process! Now you’ll want to decide on the best lender for you. You can choose the lender who provided you a pre-approval or you can learn about what others can offer. It’s important to ensure the lender can meet the dates in your offer, offer you a competitive interest rate, and has good control over the full loan process. Pro Tip: Feel free to talk with 2-3 lenders. Nuhom has a preferred list of them here. Pro Tip: Interest rates are at a historical low. This won’t last forever!
Step 6: Further due diligence and what to expect in a home inspection
While you’re deciding on a lender you should be conducting further due diligence and assessing the home. Your Nuhom agent will also look through further documentation on the property and conduct due diligence with the town or city as well. If your offer included a home inspection, you will set up a time to meet at the home. These last about 2 hours depending on the size of the home. The inspector will test appliances, look for plumbing and electrical concerns, foundational issues, exterior deterioration, and provide you with a list of any major safety concerns. If any major issues are found your Nuhom agent can renegotiate the terms of the accepted offer. Pro Tip: While experienced in what they do, your home inspector cannot see through walls! Pro Tip: Focus on safety issues when re-negotiating the offer with the seller. Pro Tip: Your Nuhom agent will check to see if there are any open permits or violations existing on the property.
Step 7: Sign a purchase and sales agreement, big deposit made
The Purchase and Sales Agreement (P&S) is a legally binding document that lays out the final terms of the sale. It will be negotiated between your attorney and the seller’s attorney and will supersede the offer and incorporate any agreed changes since. This is the who/what/when/where of the sale and contains the list of names of the parties involved, a description of the home being bought, the final price of the property, important dates to secure a mortgage, and closing information. Pro Tip: This may seem pretty complicated, but your Nuhom agent and the real estate attorney will guide you through this. Pro Tip: You will make an additional deposit at this stage, it will go towards the purchase of the home. Usually, this is 5% of the purchase price less your initial deposit made at the offer stage.
Step 8: Lender underwriting and mortgage approval
Congratulations on accomplishing the second big milestone: signing your P&S agreement. You will provide this document to your lender. Your lender will move forward to complete underwriting your application and request further documentation as they need it. Your lender will also have an appraiser walk through the property to ensure the price accepted is in line with the market. Pro Tip: Try to be at the ready when your lender requests further documentation. Pro Tip: Your lender will base your loan off of the purchase price or the appraisal whichever is lower.
Step 9: Your closing and official purchase
This is the final milestone! Congratulations, you are almost there. During the week of your closing your Nuhom agent, your lender, the seller’s team, and your attorney will finalize documents for signing and recording at the local registry. Your attorne