One of the hardest parts of the home buying process is finding a home that works for you and your family, and deciding whether to put in an offer. Once you’ve finally made the decision, and you’ve put in an offer that you think is reasonable, you can take a moment to relax and breathe—but the process isn’t over yet. After that offer is sent, there are many things that need to happen before you can move in.
Negotiations and Selection
If the current homeowner is juggling multiple offers, they’ll usually start working with the highest available offer. If that offer isn’t yours, they may drop yours entirely or leave it as a secondary priority. If the current homeowner chooses to evaluate your offer more closely, they may begin a negotiation process. Though this is different for every homeowner and situation, they’ll usually come back with a counteroffer, somewhat higher than your original offer. From there, you can employ negotiation tactics with your agent to try and settle on a price you both agree to.
The Home Inspection
Let’s assume you’ve settled on a price, and the current homeowner has formally accepted your offer. The vast majority of contracts allow a home inspection to take place before the deal is finalized; this is your chance to have the home inspected by a professional, to detect structural problems or defects that might otherwise affect the value of the house. The average home inspection will set you back a few hundred dollars, but it’s more than worth it—without this inspection, you could end up buying a damaged home without even knowing it.
Depending on what your home inspection finds, there may be further negotiations. If there are a few things wrong with the house, you may demand repairs before the deal is finalized. If the current homeowner doesn’t want to fix them, the negotiation may reopen, dropping the price even further as compensation for the existing problems.
At some point during this process, usually after initial negotiations but definitely before full mortgage approval, your lending institution will want to conduct a formal appraisal of your home. During the appraisal, they’ll look inside and outside the home, comparing it to the value of similar homes and the value of homes in the area. Note that this is distinct from a home inspection; the goal here isn’t to uncover defects, but rather to accurately assess the value of the home, to make sure the loan amount is justified.
Full Mortgage Approval
Assuming the bank is satisfied with the home appraisal and negotiations have closed, you’ll then need to get full mortgage approval for whatever portion of the purchase price you aren’t covering with your down payment. If you’ve already been pre-approved for the loan, and your personal finances haven’t changed, you will likely be approved quickly. However, if the appraisal is low, if you’ve made major financial changes, or if you haven’t been pre-approved, this process can take a few weeks.
Paperwork and Closing
Once formally approved, you can start going through the final documents on your closing date. These will include things like the deed of the home, the bill of sale, the affidavit of title, transfer tax declarations, the loan note, the mortgage, and other documents. Your real estate agent and loan officer will help you understand and complete these documents.
The Final Walkthrough
Usually during the exchange and finalization of documents, but sometimes on a separate day, you’ll do a final walkthrough of the home. This is mostly a formality to ensure that nothing major has changed during the course of events leading up to this point. As long as everything looks intact and your requested repairs have been made, the place is yours!
How Long Will It Take?
There are many stages of this process, and therefore many factors that can affect the timeline in which it unfolds. For some homes, which don’t require much negotiation and are being bought with a large down payment, the process may be completed in the span of a few weeks. For others wrought with complications (including major repairs by the current homeowners), it may take several months. Take your time through the process to make sure you’re getting the best value and doing your due diligence, and soon you’ll be in the home you’ve always wanted.