Buyers are often curious, especially if it is their first time purchasing, how the home buying process works. Luckily for them, we have a great flowchart showing most of the major steps that buyers go through. Check it out!
The Home Buying Process
The first step in the home buying process is going to be getting pre-approved for your financing. Your lender will need your last few tax returns, bank statements, pay stubs, etc. Usually, within a few hours, they can tell you whether or not you are approved for a loan. If approved, they will also let you know the size of the loan. This will help you determine what type of search you should set up in the MLS. There is no reason to be looking at houses beyond your price range! Now, you will be able to start the online search and eventually tour some homes in person. When you start looking at the homes in person, you will figure out what is realistic in your home search and what trade-offs you are going to have to make with what you can afford.
You will eventually find a house that meets most of what you want, at a price you can afford, and you will write an offer! Currently, in our market, houses are receiving multiple offers. This is now always the case. If you do not get the first house you write an offer on, write offers on two to three more and you will get something under contract.
Once Under Contract
Once under contract, you should hire a property inspector. They will do a detailed property review to double-check everything is the way it should be and make sure the house is in good condition. If there are any deficiencies, they will give you a list of things that may need to be fixed. If there are any significant problems, you and the seller, with the help of your realtor, will negotiate an inspection resolution. This means you will figure out what the seller will fix and what will be your responsibility once you close on the house.
Once you are through your inspection, it will be time to call your lender! Say, “Hey. We found a house. Here’s the contract. We are through the inspection. We like it. It’s time for us to order an appraisal.” The lender will handle the appraisal for you. It usually takes about seven days. The appraisal makes sure that the price you offered in your contract is in good alignment with market reality, so the lender can ensure they are making a good loan. While you are waiting for the appraisal, you can do a couple of things. Like, take over the HOA and set up the insurance.
Meanwhile, your lender will be finishing off the underwriting. They will get the appraisal back, and it will be time to draw up the documents! A few days before the closing, you will get your document packet to review. Once at the closing, you will sign your name about 600 times, and then the house is yours! Typically, the entire process from when you go under contract to closing takes about 30-40 days in Colorado.
If you have further questions about buying or selling, please do not hesitate to reach out to an agent on our team as soon as possible. We also offer up to 40 free classes a month to our agents and their clients. There are in-person and/or virtual formats available. Check out our training calendar for the most up-to-date offerings. Be sure to check out this video with our founder, Lon Welsh, for more details on the home buying process!