Homebuyer's Roadmap

  1. Determine wants/needs based on personal evaluation and plans for the future.
  2. Send away for a free credit report. Address any issues that may arise from report.
  3. Get prequalified by a lending institution to determine borrowing ability.
  4. Contact an exclusive buyer agent (see FAQs for more on buyer agents). Working with an experienced exclusive buyer agent will ensure that you have a real estate professional whom you can trust, and who will be a knowledgeable advisor throughout the homebuying process.
  5. Begin looking at houses with your buyer agent. Keep in regular contact with your agent, calling for example if you see anything of interest in a printed ad or Real Estate Book, or an open house advertised in the paper that looks promising, or a For Sale by Owner lawn sign (jot down the phone number and the address).
  6. In the meantime, shop around for a bank or mortgage company with the most favorable rates and terms. Your buyer agent can give you advice on this. If you are a first-time homebuyer, you may qualify for the Soft Second Mortgage or other first-time homebuyer programs. But do not apply to more than two banks for a full preapproval, for too many credit checks will send up a red flag for subsequent credit checks.
  7. Make an Offer to Purchase on a property, based on your buyer agent's evaluation of the property and your own intuitive sense of its fair value. You'll need to provide a deposit check for $500 made out to the listing agency (this will be kept in escrow and will be returned to you if you are not satisfied with the results of the inspection or if your mortgage application is not approved). It strengthens your offer if you also provide a copy of your prequalification or preapproval letter from your lender. Your buyer agent will give you guidance on negotiations and will negotiate on your behalf with the seller's listing agent.
  8. If the offer is accepted, your buyer agent will provide the names of home inspectors and real estate attorneys he or she has worked with. It is important to set up the home inspection as soon as possible, since you generally have only ten to fifteen days from the day the offer is accepted to get any inspections done. This will cost about $500. If the property has a well, a water quality test should be taken ($135 for basic test). You should also get a radon in air test done, especially if the basement has a dirt floor or if there is a crawlspace ($150). If there are any new discoveries or new issues turned up by the inspections or tests, your buyer agent may recommend that you ask the seller to share the cost of these items if they are costly (e.g., new furnace, new roof). In most cases, we ask the seller to absorb half the cost of such issues by adjusting the sale price downward.
  9. Contact a real estate attorney as soon as you have an accepted offer in hand, to negotiate the Purchase and Sale Agreement, which is the official agreement between the buyer and the seller, and which supersedes the Offer to Purchase. Your attorney will also work for your lender, handling all the bank's documentation at the closing, and will also do a title search of past deeds on the property, to ensure that the property is free of encumbrances or clouds on the title. Many attorneys farm the title search out and charge extra for this. Ask about this when you call. The attorney's fee is usually about $800, so long as no out of the ordinary work was necessary. It's usually best to have your buyer agent draw up simple extensions and other minor documents, as this will add to the lawyer's fee.
  10. Apply for a mortgage on this specific house. The lender will send out an appraiser to appraise the fair market value, to ensure that you are not paying more than it's worth. The mortgage application fees vary from bank to bank. The cost of the appraisal is usually passed on to you in your closing costs.
  11. Sign the Purchase and Sale Agreement and make your second deposit (usually 5 percent of the sale price, minus the $500 you've already put down, but less of course if your downpayment is less than 5 percent). A personal check is fine for this deposit. This also will go into the listing agency's escrow account. If you don't get financing for some reason (loss of job for example), you will get all these deposits back.
  12. Get a mortgage commitment letter from your lender.
  13. Your buyer agent will remind you a week or two before closing, to get homeowner's insurance (about $40-$50/month). You can get this at virtually any general insurance agency. You will need to pay the first year's premium upfront and provide proof of this payment at the closing.
  14. Your agent will also remind you to set up your utility accounts, which should begin the day of closing: electricity, heating fuel, telephone, cable. The water bills (if it is town water) will be transferred to your name automatically by the town clerk.
  15. Do a walk-through inspection with your buyer agent either the day before the closing or an hour or so before, to ensure that all is cleaned out properly (broom swept at least and free of junk and furniture), that all the appliances and fans that should remain are there, and that no new damage has been done to the property. If there are issues, your attorney can hold money back from the seller in escrow to address them after the closing. It should not affect the closing, unless it is something major.
  16. Go to the closing, which will usually be at your attorney's office. Your buyer agent will probably be there and the seller and the seller's attorney may or may not be there (today the parties sometimes sign separately). You'll need to bring your binder from the insurance company and a cashier's check for the balance of your down payment and closing costs. The latter are often 2 percent of the mortgage amount, and much less if there is no mortgage.
  17. You'll get keys at the closing, so you can move in immediately.

David Hopkins 2019