The home buying process – a brief, step-by-step overview

If you’re like most people, buying a home represents your single biggest investment – and debt. As such, the home buying process can be one of the most exciting, but sometimes also stressful, experiences you ever go through.


This may be true whether you’ve bought many homes or you’re looking to buy your first, whether you’re in the market for a new primary residence, an investment property or that perfect vacation getaway. Moreover, never has the real estate market offered more great opportunities, or been fraught with more risks, than now.

There are many factors to consider and many decisions to make. That’s why, when buying, it’s crucial for you to have all the available resources necessary to make a well-informed decision, together with the time required to make complete use of them. That’s also why you should enlist the help of a trusted REALTOR® who’ll be able to provide you with expert consultation at each step of the buying process. Generally, finding and purchasing a home includes the following steps, some of which are examined in more detail throughout this page:

Contact me: 609-802-3564 or

*See our ready to print: Things to Consider When Buying a house

  1. Define Your Goals, Research Your Options, Make Your Plans


Given that buying a home is such a big step, it’s all the more important for you to

educate and prepare yourself as much as possible in advance. This means clearly

determining why you’re buying and what kind of home you’re looking for. And

because buying and financing a home are so closely related, it also means

examining your current financial situation and projecting how much you can

afford. Once you’ve answered these questions, even tentatively, you’ll be in

a better position to research your housing and mortgaging options,

as well as create an action plan and timelines for moving forward. You

may want to do this yourself, but you may also benefit by consulting an

experienced REALTOR® right from the start.


2. Contact A REALTOR®

Buying real estate is a complex matter at the best of times, given

that there are so many factors to consider and no two homes or

transactions are alike. However, with all the unique opportunities and

potential pitfalls of the current market, it’s even more important for you

to contact a REALTOR® once you’ve definitely decided to buy.

In choosing a REALTOR® to guide you through the property search,

financing, negotiation and transaction processes, you should consider

their local market knowledge, experience and track record.

3. Get Pre-Approved For A Loan


Generally, it is recommended that you get pre-qualified for a loan before you

start viewing homes with the serious intention of buying. The pre-approval

process involves meeting with a lender and authorizing them to examine your

current financial situation and credit history. On the basis of this examination

the lender will provide you with a document that details how much you can

borrow to buy a home. You may want to consider looking online to see what

different lenders offer, such as on, or contacting your local

bank or credit union.

The benefits of pre-qualification include:

• You’ll have information about what you can afford and be

able to plan accordingly

• As a qualified, motivated buyer you’ll be taken more seriously

when you make an offer on a home

• Lenders can tell you whether you qualify for any special

programs that will enable you to afford a better home

(particularly if you’re a first-time buyer)

Real estate financing is available from many sources, and an

experienced REALTOR® will be able to suggest lenders with a history

of offering excellent mortgage products and services.

4. View Homes And Select THE ONE


Simply put, key to the home search process is knowing what you’re looking for.

Among other things, that means distinguishing between “must-haves” and “like-

to-haves”. To help you to target your search and define your home preference

priorities, this guide* includes a Home Search Worksheet on page 28.

That said, here are a few recent facts about the search process that

might put your experience in perspective:

• Almost 90% of buyers use the Internet to search for homes.

• The typical buyer searches for 12 weeks and views 12 homes.

• 81% of buyers view real estate agents as very useful in the

search process*

There are many benefits to starting the search process at a real estate

website like®, the world’s most extensive source for

property information. You can view many homes and their details, take

video tours and access neighborhood info. However, it’s also important to

view homes in person. While their property details may seem similar online,

homes can actually be very different in terms of layout, design, workmanship and

other aspects. In addition, you should ideally view homes with the help of an experienced

and eagle-eyed REALTOR® who’ll notice things you might miss, provide expert analysis,

and act as an impartial sounding board.

*National Association of REALTORS® Profile of Home Buyers and Sellers, 2010

5. Make An Offer And Negotiate With The Seller

Now that you’ve found the home you’d like to buy, it’s time to make

an offer. Your local real estate association, working with legal counsel, has

developed the contracts that are used for transactions in your area. These

contracts enable you to specify a sale price and also include many clauses for

specifying various terms of purchase, such as the closing and possession dates,

your deposit amount, and other conditions. You should carefully review these

clauses with your REALTOR® to ensure that they express your desired offer. In

addition to drawing up the contract, your REALTOR® will be happy to address

all your questions about the offer process.* Once you’ve written the offer, your

REALTOR® will present it to the seller and/or the seller’s representative. At

that point, the process – given that a home’s eventual sale price is subject to

supply and demand– will depend on the kind of market you’re in. Generally

though, the seller can accept your offer, reject it, or counter it to initiate the

negotiation process. Successive counter-offers, with deadlines for responding and

meeting conditions, will be exchanged between you and the seller until a

mutually-satisfactory pending agreement is reached or the negotiations breakdown.

6. Secure Your Financing


Once you have a pending agreement, it’s time to go back to your chosen lender

to finalize your mortgage details so you can close the deal. This means finalizing

your down payment, interest rate, regular payment schedule and any other

financial conditions associated with the closing.

As noted in the section on loan pre-approval, if you’ve already been qualified

with a lender for a certain loan and home purchase, this phase of buying your

new home should be a relatively straightforward matter that centers around

finalizing the loan details and signing the mortgage papers. As the old saying

goes, ‘let the buyer beware’. Particularly in these times, when so many buyers are

suffering the consequences of having not fully understood their financing

decisions, it’s crucial for you to work with people you trust. In this regard, a good

REALTOR® can be a true friend for life.

7. Close The Deal


If you’ve efficiently taken care of everything connected with purchasing

your new home, the experience of taking ownership will be a positive joy with no

surprises. Key steps to the closing, also referred to as the “escrow” or

“settlement”, include:

• Getting a Title Search – an historical review of all legal

documents relating to ownership of the property – to ensure

that there are no claims against the title of the property. It is

also necessary to purchase Title Insurance in case the records

contain errors or there are mistakes in the review process.

• The Final Walkthrough – you’ll be given the chance to look

at the home to make sure it’s in the same condition as when

you signed the sale agreement.

• The Settlement – typically, on the Closing Date you’ll go to a

lawyer’s office to verify and sign all the paperwork required to

complete the transaction. The settlement will include paying

your closing costs, legal fees, property adjustments and

transfer taxes. At that point, you’ll receive the property title

and copies of all documentation pertaining to the purchase.

Oh, and one more thing – you’ll get the keys. In most cases,

Possession Date will fall within a couple days, at which point you’ll be

able to move into your new home.