Home Purchase ProcessReal estate purchase can be daunting to a first-time buyer, and even those fairly experienced in house purchase can find the process of buying a home a bit scary. Let’s examine the main steps involved in buying real estate and put them into perspective so that each step in the whole procedure makes sense and is easily understood.

1.  Mortgage Loan Pre-Approval

It is not essential to get your mortgage loan approved in advance, but it certainly helps to know how much you can afford to offer for your new home. Approach your lender and inform them of your intention to purchase real estate.

They will then get you pre-approved for the loan that best fits your needs, and give you a figure they are prepared to lend you, assuming that the appraisal is positive (more on this shortly.) By doing this in advance you can save a lot of time, because it can take a few days to check your credit-worthiness and make you the loan offer.

2.  Buying a Home: Make the Offer

Having found a property you believe could be your new home, you should make an offer and sign a real estate contract.  The terms of this contract may change, since there are several factors that could enable you to reduce your offer or even leave the contract altogether. Among these are the property inspection, appraisal, confirmation of mortgage loan and so on.

3.  The Disclosure

The disclosure is an important aspect of real estate purchase. The seller must inform you of any negative aspects of the property, such as any known geological or environmental hazards (earthquakes, floods, mine shafts), leaks, dry or wet rot, and any other flaws. The seller must also reveal any work carried out without the necessary local authority permits, and any ongoing problems with the HOA.

If there is something included here that you were not informed about prior to signing the contract, you can leave the contract without prejudice to yourself.  Sellers tend to be honest in their disclosure.

4.  The Real Estate Inspection

The process of buying a home enables you to thoroughly inspect the property. You should never purchase a new home without having it professionally inspected. You should contract a qualified inspector to check over the property from roof to basement and report on any flaws.  You can accompany the inspector if you wish.  Any specialists needed can also be called upon, such as electricians and gas and heating engineers.

Any issues arising from the inspection can then be raised with the seller. Perhaps a heating service is overdue, or there is no sump pump in a basement prone to flooding. The seller can either rectify the problem or you can offer a lower price.

5.  The Appraisal and Final Loan Approval

Your lender will appoint an appraiser to value the property. No real estate purchase involving a loan will go ahead without an appraisal which is a fundamental component of the process of buying a home. Your mortgage loan will be approved or denied on the basis of the appraisal. The vast majority are approved.

6. Inspect the Property Again

You should always check our (almost) new home once more immediately before final closing.  You can make sure that there have been no changes, or that no fittings and fixtures have been removed since your last visit. You should also check it is clean.  If there are any problems you can insist that seller resolve these before you agree to sign the closing documents.

7.  Real Estate Purchase: Closing the Deal

This is the final process of buying a home, and makes the real estate purchase a legally binding transaction. This is when you pay your deposit and when the bank or building society will pay their share. The lender will hold the deeds until you have paid off the loan.

Once the papers are signed you cannot back out, even if you find the property not to your liking. The process of buying a home has been developed and refined over time and usually runs smoothly.  However, there are many potential problems along the way which is why a mortgage advisor is recommended if you want your real estate purchase to proceed problem-free.

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