Many times buyers, especially first time home buyers, are interested in a brief overview of the process of buying. This article attempts to outline the steps of the home buying process from beginning to end.

Step 1: Find A Real Estate Agent – I firmly believe that smart, successful people surround themselves with smart, experienced experts that can help guide them to a well thought out decision. If you don’t buy and sell Real Estate every day all day for a living, how could you possibly understand the Real Estate home buying process and all of the nuances and intricacies of the available inventory, purchase contract, title insurance and mortgage process? How could you possibly know what a good deal or a great deal looks like? You can’t! Get referrals from friends, use Google to search, go to open houses and keep looking until you find someone you feel has the experience, resume and personality to represent you and your interests. It costs the home buyer NOTHING and can save you a great deal of stress in the long run.

Step 2: Get Preapproved – Getting a preapproval or prequalification should always be the very first step when preparing to purchase Real Estate, but not surprisingly most home buyers begin searching for homes before they really know what they can afford to spend. I made getting preapproved step 2 of the real estate home buying process only because many times the best lender recommendations will come from your real estate agent. The housing market crash has created an ever changing lending environment that is difficult for even full time real estate professionals to keep up with. Lending requirements change, PMI and MIP charges increase, loan limits increase and decrease, condos become unwarrantable and interest rates fluctuate every day. The only accurate way to have a realistic idea of your borrowing power is by getting preapproved by a reputable lender. Remember too that just because you can afford to spend a certain amount does not mean you have to spend that amount. Determine a monthly payment you are comfortable with and only look at homes with prices that fall into that monthly payment range.

Step 3: Create A Hierarchy Of Needs and Wants – Most buyers of real estate are not sure what they ultimately want other than they know they want a great deal. Buyers should consider all of their needs and wants before looking at any homes. Items up for consideration are: price, monthly payment, beds/baths, square footage, outdoor space, school district, parking, location, walkability, floorplan and neighborhood. Be realistic about what you can afford and then determine what features are essential, and which would be nice but are not deal breakers. Be prepared to decide if you would rather have your dream home in your second or third favorite neighborhood or a nice home in your favorite neighborhood.

Step 4: Search For Real Estate – If you’re working with a Real Estate Agent he or she should be searching the MLS for new listings on a daily basis. You shouldn’t have to send properties to your agent; your agent should be emailing you properties. If you have a proactive, hands on personality and you want to be involved in the search process there are numerous local and national real estate websites that offer free access to the entire MLS. I recommend www.CenterCityTeam.com. Pay careful attention to all of the home’s details, not just the price. Variables like real estate taxes, condo fees, HOA fees, building maintenance fees (co-ops) and amenities like a pool, gym, and parking can affect affordability considerations and must be carefully compared between properties.

Step 5: Submitting An Offer – Submitting an offer can seem intimidating, especially to first time home buyers, but if done correctly there is little risk involved. The standard Pennsylvania agreement of sale includes contingencies that allow the buyer to terminate a signed purchase contract without penalty under certain circumstances. The usual contingencies are for a mortgage, inspections, and an appraisal but there many others that can be included to protect the buyer if needed. If you need to sell a home before making a purchase let your agent know that you will need a home sale contingency. Be open and honest with your real estate agent so he or she can make sure you are 100% protected by the purchase agreement. Research relevant comparable home sales and try to determine a fair price range to pay for the home. Find out what the average asking price to sale price ratio in the home’s neighborhood has been for the past 3-6 months and make sure your initial offer makes sense. Finally, try to make your offer as appealing to the Seller as possible without compromising any of your interests or goals.

Step 6: Accepted Offer – Time to celebrate right? Wrong! Getting your offer accepted is the beginning of the due diligence process, not the end. The contingency periods allow you to inspect the home, shop around for mortgages and perform all of your due diligence on the home. Make sure that the home and all of its systems are in the condition they appear to be. Talk to two or three reputable lenders and make sure you can obtain a loan with an interest rate and fees that you can afford. Contact an insurance company and get quotes for home owner’s insurance and a title insurance company to order title insurance. The lender you select will hire an appraiser to perform an appraisal of the property. Your real estate agent is responsible for overseeing the transaction, coordinating with the lender, the title insurance company, the homeowner’s insurance company and providing any recommendations you need along the way.

Step 7: Settlement – If your real estate Agent has done his job well settlement will be a fun and relaxed atmosphere. Prior to settlement you should perform a pre-settlement walk through to make sure the home is in the same condition as when you signed the purchase contract. Make sure all agreed upon repairs were completed and that there is no new damage to the property. Prior to settlement you should also contact the utility companies that provide electric, gas, and cable/internet. In this means you will contact PECO, PGW and Comcast. The title company will handle the transfer of water and sewer. All you will need to bring to settlement is a check for the amount needed at closing and your state issued identification. Once all the paperwork is signed you can relax and celebrate. Now you are officially a home owner!