Purchasing a home can be one of the most rewarding experiences in your life. However, the process is not without pitfalls and mistakes may cost you money and valuable time. Following the 10 steps below will put you on track to buying the home of your dreams and help you avoid the aggravation associated with the home buying process!

#1 Get pre-approved or pre-qualified for a loan
 

The first thing you should do when shopping for a home is become pre-qualified, or better yet, pre-approved, for a loan. The process is typically free and involves filling out a short application. To expedite the process, many lenders allow this application to be submitted over the phone or even on-line!

The lender will use the information you submit to determine how much you are able to borrow. This information is very helpful because you will know what homes you can afford and you won’t waste time looking at homes you can’t afford.

In addition, the lender will provide you with a pre-approval letter upon acceptance of your application. This letter will show the seller that you are able to purchase their property and you are not simply wasting their time. Many sellers will not enter negotiations without a pre-approval letter, so be sure you do not skip this step!

   
#2 Determine what you want and what you need
 
Before you begin searching for the home of your dreams, take the time to sit down and decide what you are looking for. Write down a list of things that are important to you such as minimum number of bedrooms and bathrooms, style, location, price, features, etc. When you complete this list, sort it into “need to haves” and “want to haves.” This will help you focus on what is important when viewing properties.
   
#3 Searching for Property
 

Your REALTOR® will help you locate homes that fit your wants and needs. Be sure to include your budget and location concerns as well. Finding the ideal home is a process of elimination. A REALTOR® is your ally in making certain that you only view the homes that meet your requirements and that you don’t waste time with properties that are not a match.

Start your search on-line at your agent’s website or your local MLS website. Browse through newspapers or real estate magazines. Stay organized by listing the homes that appeal to you. List their pros and cons and see how they match up to the requirements you wrote down in Step 2.

When you are ready to view your prospects in person, ask your REALTOR® to make appointments for you to visit those properties.

   
#4 Making an Offer - Negotiating Terms
 

When you have decided on the home of your dreams, your REALTOR® will help you determine a fair offering price by preparing a CMA (Comparative Market Analysis) comparing similar sold properties and active properties on the market. Your REALTOR® will make certain that your offer isn’t too high or too low. This will increase your chances of a successful negotiation.

When your offer is accepted, the final offer becomes an executed contract and includes the buyer(s) and seller(s) signatures. If you prefer you can have your attorney review the contract prior to signature.

A “good faith” deposit may be required to accompany the contract. This deposit will be credited toward the purchase price upon closing and is non-refundable unless otherwise stated in the contract. Your REALTOR® will advise you of the amount required and will help you determine which contingencies should be included in the contract to protect your best interests.

   
#5 Appraisal and Inspections
 

Your REALTOR® should include a contingency that the property will appraise to value in the contract. If you are using a loan to purchase the property, your lender will arrange for the appraisal.

In addition, your contract should include a contingency for a Home Inspection for which you should be present. A standard Home Inspection will analyze the condition of the heating system, central air conditioning system, interior plumbing and electrical systems, roof, attic, visible insulation, walls, ceilings, floors, windows and doors, foundation, basement, and other visible structures of the home as found by a visual inspection. Ask your REALTOR® to recommend a reliable Home Inspector.

   
#6 Get Homeowners Insurance
 
Upon acceptance of the contract, you should secure a homeowners insurance policy form your insurance company. Homeowners insurance covers your physical property and possessions against theft and damage from recognized risks and perils. These include theft, fire and lightning, smoke, frozen pipes, and ice and snow. Under some circumstances, you may be required to purchase additional flood insurance. You will be required to have Homeowners Insurance in order to close on the property.
   
#7 Get Title Insurance
 
To protect yourself from the debts or obligations of the previous owner(s), you will be required to purchase Title Insurance. Title Insurance guarantees clear title of the property you are purchasing and also provides protection against financial loss in the event that the title is in a condition other than how it was insured.
   
#8 Apply for your mortgage
 
When the contract is complete and has been accepted, it is time to formally apply for your loan. You will be required to fill out an application and provide pay stubs, bank statements, income tax returns and any other documents requested by the lender. To avoid negatively affecting your credit rating, avoid making any large purchases during this period.
   
#9 Final Walk Through
 
A final walk through of the home will permit you to see any major damage that may have been hidden before the home was emptied. This event is usually scheduled on the day before the closing will take place. If the previous owner(s) agreed to leave anything behind as stated in the contract, check that they did so. Verify that all appliances are in the same condition as they were when the property was viewed and inspected.
   
#10 Closing
 
At the closing, the final contract will be signed. You (the Buyer), your REALTOR®, the Seller(s), the seller’s agent, the attorneys representing the buyers and/or sellers (if applicable), the title company’s representative and the lending company’s representative will attend the closing. Make certain all parties signing the contract have their driver’s license or a photo ID at time of the closing. When all the documents have been signed, you will receive the keys to your new home and may move in immediately. Congratulations! You have just made one of the most rewarding purchases of your life!