Deciding to buy a home is one of the biggest purchases that most people will ever make in their lifetime.  As such, it is important that you become well-informed on what are the homebuying steps so that you:

• Can be well prepared
• Are not caught by surprise during the process
• Have a smooth escrow/homebuying process
• Greatly reduce the anxiety and stress

Before you take any of the homebuying steps, though, you will need — at the minimum — a two year work history working either at the same company or in the same industry if you have changed employers or two years self-employment in the same industry.

Next, know your credit profile.  You can check your credit at experian.com or annualcreditreport.com for free and without lowering your score.

Review your credit to know your score, check for inconsistencies, errors, lates, collections, etc. Once you know your credit situation, work on removing any negative items, if that is even possible or an option.  Although you can do this on your own, there are credit repair companies who will help you with this if you wish to go this route. 

Although some lenders will accept a 580 credit score, most lenders will require a 620 score or higher.  Of course, the higher the score, the better terms and interest rate that you will receive. 

If you have a fair to excellent credit score, the two years work history in the same or similar line of work, and savings for a down payment, you can now begin to take the steps to buying  home.

The Homebuying Steps & Process

Know What You Want

Write down where you want to live, how many bedrooms and bathrooms you need, proximity to shopping, freeways, fixer upper or ready to move in, etc.  Knowing exactly what you want in your next home will help you and your realtor as you begin searching and visiting  homes.

Contact a trusted real estate broker/agent.

A knowledgeable and professional real estate agent will help you navigate the homebuying process by answering your questions, referring mortgage lenders, inspectors, and guiding you step-by-step until you become a homeowner.

Contact your mortgage lender or ask your real estate professional for a recommendation

The lender will provide you with a loan approval letter after they review your credit report, assets(savings), income and debt. This letter will be required when you begin to submit offers on homes because it shows the home seller that a lender has reviewed your overall financial situation, credit profile and has determined that you are a good credit risk.  

Go Home Shopping

With the loan approval letter in hand, you and your realtor can take action on one of the most fun homebuying steps —  visit homes and make offers. Once an offer is accepted, the escrow/buying process begins and the clock starts ticking. So, make sure that you respond right away to requests for information/documents via emails, text messages and voice messages. There are deadlines that you must meet in order to close on time and, ultimately, protect your earnest money deposit (or EMD as us realtors call it). The EMD is the good faith deposit that you provide to escrow to show the seller that you mean business.

Conduct your home inspection & appraisal

Conduct the general home inspection (and any other inspections that may be necessary) and have an appraisal completed. The appraisal is conducted by the bank to ensure that the amount that you offered is not more than the market value of the home. 

Prepare to close

Once the home inspection and the appraisal have been completed and everything turned out fine, now you can prepare to close.  Prior to closing, though, you will have to purchase homeowners insurance. 

Conduct the final walkthrough

Conduct the final walkthrough at least 5 days prior to close of escrow to make sure that the home is in the same condition as when you first visited it and that all negotiated repairs have been completed by the seller.

Sign closing documents.

Congratulations! You are now a homeowner.