buying a home

What are the steps in a home purchase?

Once your finances are in order, start the process by making a wish list of things you want in your new home and neighborhood. How much space do you need? What’s more important to you, good schools or a short commute? Does the dog need a big yard?

Start scouring listings sites like Realtor, Trulia and Zillow. Create an account to save properties you like, or collect them on a Pinterest board.

Once you zero in on a neighborhood that works with your budget, find a real estate agent. Ask family and friends—that’s how 42% of buyers find their agents—but don’t stop there. Interview at least three about their availability, negotiating strategies, and knowledge of the market where you want to buy.

At the same time, start shopping for a mortgage lender. Ask your current bank or credit union about customer discounts. Check websites like Bankrate to see which lenders offer the lowest rates. Compare fees carefully: Some costs, such as local transfer taxes, are fixed, but others vary from lender to lender.

Once you’ve found a home you want, your agent will help you make an offer. Expect a couple rounds of counter-offers. You’ll plunk down a deposit, from $500 to 5% of the purchase price, to show the seller you’re serious. This “earnest money” goes into an account to be applied to the purchase price at closing time. The contract will include the agreed-upon price, financing terms and an estimated closing date.

After you and the seller have signed the contract, loan processing begins, including the lender’s appraisal. You’ll order an inspection to make sure the home is in good condition. You and the seller will decide how to handle any problems—the seller may pay for repairs or shave some money off the sale price.

Finally, you’ll close the deal amid a flurry of paperwork (be prepared for last-minute requests from the lender, such as updated bank statements). Then all that’s left is to collect the keys and move in!

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