Home Buyer Checklist

Apr 10

Everything You Need to Know Before Buying a House

Whether you’re buying a home for the first time, or 10th, the process can be exciting, but it can also feel overwhelming. Between credit scores, down payments, inspections and loan approvals, there is quite a bit to manage. That’s why this checklist was created. It guides you step-by-step through the homebuying process, so you can feel more confident in moving forward.

Maybe you’re months away from making a move, or just starting to dream about homeownership. Either way, this checklist will keep you on track from start to finish.

Get Your Finances in Order
Obtaining a loan is not a “one size fits all” process. The good news is your lender will work closely with you to make sure you have everything you need and give you a game plan if needed.
Check Your Credit Score
The higher your credit score, the better options you may have regarding your loan selection. While some loan programs accept a lower score, you should aim for a score of 620 or higher. Your score is determined by several factors:
Payment History - on-time and late payments
Amount of Debt - what do you owe in student loans, credit cards, car loans, etc
Length of credit history - how long have you had the accounts, and how long since you’ve used them
New Credit - have you opened several accounts in a short amount of time
Credit Mix - types of credit (credit cards, car loans, mortgages, etc)
Tip: You can check your score using free apps or through your bank. Note that third-party apps may not be as accurate as when the lender pulls your credit.
Start Saving
One question I frequently get asked is “How much down payment do I need?” The good news is that we are past the time where 20% of the purchase price is not always required. There are loan programs available that require as little as 3% down payment, and even better, there are loan programs that require NO down payment at all. Your selected lender can help determine the best program which may include grants or down payment assistance programs.
Additional out-of-pocket expenses to plan for are:
Earnest Money - typically 1% of the purchase price (can be more or less)
Home Inspection - can start around $300 for a basic home inspection. Additional services could increase the price
Appraisal - can be at least $500. Some lenders require this to be paid during the process, while some may allow it to be paid at closing
Closing Costs - plan for at least 2% of purchase price. These costs include title company fees, lender fees, money to start escrow account for homeowners insurance and property taxes.
Get Pre-Approved for a Mortgage
Getting pre-approved shows the seller that you have spoken to a lender and that you have the ability to purchase a home. A few documents the lender may want to see are:
Pay Stubs
W-2s or 1099s
Bank and Retirement Statements
Tax Returns
Tip: Not all banks and mortgage lenders are created equal. Compare interest rates, fees and loan options to make the best decision for you.
Find a Real Estate Agent You Trust
Your agent will guide you through the entire process. They will advocate for you, explain each step, and do the best they can to help you avoid costly mistakes.
Tip: Communication is key. Make sure the agent you select is truly able to work well not only with you, but with other agents, lenders, title company representatives, inspection companies, appraisers, and anyone else that may play a role in getting your deal to the finish line.
Start House Hunting
Now the fun begins - finding your new home!!
Create a Wants vs Needs List
List out your must-haves (e.g., 3 bedrooms, school district) and nice-to-haves (e.g., big backyard, updated kitchen).
Research Neighborhoods
Visit areas at different times of day, check commute times, and look into crime rates and school ratings.
Attend Open Houses and Tours
Keep notes on each property you visit. It’ll help when it comes time to make a decision.
Tip: While all homes are not perfect, there is a perfect home for you. Do not rule out a home only based on pictures, everyone doesn’t use a professional photographer, and not all photographers take great pictures.
Make an Offer and Negotiate
Once you’ve found “the one”, it’s time to craft a competative offer.
What to Consider:
Price
Earnest Money deposit
Inspection and Appraisal contingencies
Closing timeline
Negotiation Tips:
Stay calm
Know your max budget
Trust your agent’s advice
Get a Home Inspection
This step can save you thousands. An inspector will evaluate the home’s condition. They will check: Roof and foundation, plumbing and electrical, HVAC systems, appliances, and structure
Red flags like mold, termites, or major structural issues could lead to renegotiation of the contract or walking away
Finalize Your Loan and Prepare to Close
Underwriting Process:
The lender will double-check your financials during the process. During this time, avoid making big purchases, opening new credit lines, or co-signing on loans for others.
Final Walkthrough:
Do a last check of the home to ensure any agreed-upon repairs are done
Closing Day Checklist
It’s important to be prepared for closing.
Time - Plan to be at closing for an hour. Depending on the terms and documents needed, the time to complete paperwork can take more or less time
Valid ID - have a valid, unexpired driver’s license or other government issued photo ID
Cash to Close - Have a certified check or wire transfer for any money due at closing. Amounts of $10,000+ will require wire transfer