Introduction to the Home Buying Process:

Process Street - Home Buying Process

Buying a home is likely one of the biggest purchases you'll make, so it's important to approach it with a clear process. 

There are a lot of factors to consider when purchasing a home. This checklist aims to guide you through each one by one to make sure you've accounted for everything you need to. 

You can run this checklist from the moment you decide you want to investigate moving and follow it until the purchase is complete.

You can watch this short video for an intro to the home buying process.

Home Buying Process

Choosing Your Home:

Assess your budget

For a purchase of this size, you will need to determine what kind of price range you'll be able to work within. 

You need to consider what you can afford and what size of mortgage a bank is likely to lend you.

To help assess your budget, you can use the Process Street budget template.

Use the form field below to note your range.

Find an agent

Working with an agent will help the process run smoothly and avoid legal complications

An agent will have a good knowledge of available properties on the market while also being able to tell you important information about the neighborhood. 

The agent can show you a range of recommended homes which suit your budget and wishlist. 

Research local weather and environmental concerns

If you are buying by the coast or near a body of water you, should always check for flooding potential. 

The same is true for less obvious environmental and weather concerns also. 

Take the time to do your due diligence into the local area. 

Meet the neighbours

If you think you've found the right place, be sure to meet the neighbors.

You're going to be living alongside them for a number of years to come. Treat this as an opportunity to save yourself from years of potential misery.

You can watch the 2014 film Neighbors as a warning.

Bad Neighbors

Check rules for street parking

Find out what rules apply to parking in your new area. 

Even if you have sufficient space on the drive, there may be occasions when you have visitors and street parking becomes a concern.

Visit more than once

It's always important to have multiple visits to your new place.

You may discover new things on a second or third visit which force you to change your mind. 

Making Your Offer:

Make your initial bid

The conventional wisdom is that you should bid low on your initial offer. 

Agents are required by law to pass on any and all bids to the seller, so you can aggressively low-ball if you want.  

In advice from the Home Owners Alliance, a bid of 5-10% below the asking price is a good way to start negotiations. 

Be clear with what you want included

Agree on a written list of what you want included with the property.

This will act as part of the agreement later in the process, but some items on your wishlist may be ones the buyer does not want to part with. Be flexible on your negotiations.

Upload the agreed list below.

Know when you could move in

Find out a range of time where you are able to move in to the new property.

This will help you understand what your timeframe is for sorting out the financing and legal aspects of the purchase.

Use the form fields below to record this information.

Request the seller purchases home warranty

A home warranty simply covers for problems which may arise in the property.

This generally covers for when appliances or major systems within the home break.

Request that the seller purchases the home warranty. They will typically buy it to cover the first year, and then you are able to renew that warranty year on year afterwards. 

Read more about home warranty here.

Getting a Mortgage:

Check what down payment you can make

Assess your budget to understand what size of down payment you can make on the property. 

It is recommended to make a large down payment to reduce the sum on which you will be paying interest.

Shop around for multiple offers

As with any other purchase, you should seek multiple offers before deciding on which mortgage you will choose. 

Different organizations will offer varying payment plans with fixed or variable interest arrangements. 

Click here to read a more in-depth article from Money Saving Expert on what kind of payment plans might suit you.

Inspecting the House:

Hire an accredited inspector

To make sure the inspection is carried out to the highest standards you should hire an accredited inspector. 

This person will be able to advise you on any further specialist inspections which may be required. 

They should provide you with an overview report which details structural information about the property plus any fixes which they recommend need taking care of. 

You should also do your own home inspection as part of this to double check. For this, you can use the Process Street home inspection checklist.

Obtain written estimates for any fixes

Once you have received your report, you can work through the list of required fixes and hire contractors to assess each task. 

With the full pricing of any fixes required, approach the seller to negotiate these fixes be deducted from the sales price.

Appraising and Insuring:

Hire an independent appraiser

Home appraisal by an independent appraiser provides you with a fair price for the property to know whether you are overpaying. 

This will help bring both parties to an agreement in the negotiation of the final price. 

According to FIXR, you should expect to pay $300-400 for this service.

Purchase title insurance

In simple terms, title insurance protects your claim of ownership over the property

Title insurance is "generally 1% of the loan amount". Bank Rate have detailed 4 ways they think you can save money on your title insurance.

Closing the Deal:

Estimate total cost with interest

Be aware of the total amount of money you will be paying. 

On top of the price agreed with the seller, you have to calculate the expected interest you will pay on the mortgage plus any added closing costs.

Request an itemized breakdown of the closing costs so that you can work out this overall figure. 

Final Steps:

Check everything with moving parts functions correctly

On your final visit to the property before moving in, you want to check the condition of the home one last time. 

Check everything with moving parts is functioning correctly. This sounds vague but is a good rule of thumb.

You should check the plumbing and the heating particularly as these are potentially expensive systems to fix should further problems arise. 

Test every plug socket

Take a desk lamp or some other light electrical item with you to the house. You can plug this in to each socket to check they are functioning correctly.

Alternatively, you can use specialist tools like a multimeter to receive a more complicated breakdown of how the electrics are performing. 

Assess smoke and carbon monoxide detectors

You don't want to move into a new house which could put you and your family at risk. 

Smoke and carbon monoxide detectors are vital safety equipment and you should assess how many are in the home. Then check they are all functioning as they should do.

Visit on a cold day, if possible

Visiting your new home on a cold day can help you understand how well the central heating system functions. 

Some homes may have central heating which technically performs very well, but with high ceilings and poor insulation struggles to heat the home.

Investigate for vermin inside and out

Scan the house and outside space to understand what potential vermin problems may exist. 

Given all the checking and assessing which has been done previously, it is unlikely you'll find a serious problem at this point.

However, there could be small issues which may concern you. With knowledge of these issues, you can begin to combat them from day 1.

Sign all contracts and complete the purchase

Make sure everything has been signed and all parties are happy.

Congratulations! You are the proud owner of a new home!

New home!

Run the Process Street moving checklist

Now that you have completed your purchase, run the Process Street checklist to help you make the move. 

Simply click below.

Run the moving checklist.

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