10 Step Checklist for First-Time Home Buyers
BY KAPINA LANSDALE
For most, purchasing a home is one of life’s most valued accomplishments. Buying a home, on the other hand, can be a stressful process. ESPECIALLY as a first-time home buyer.
That’s where I come in…
Hey, I’m Kapina and I’m a licensed REALTOR® in Hawaii. I specialize in helping first-time home buyers purchase their first home while educating them through the process.
Having gone through our own first-time home purchase back in 2015, I know first-hand how daunting and chaotic the process can be. Especially if you aren’t educated by your agent.
That’s why I’ve made it my MISSION to educate my buyers through the entire process.
Knowledge = empowerment in my eyes. And every first-time home buyer deserves to feel empowered in their decision.
I firmly believe that everybody should have easy access to this kind of information. So, I’ve created a checklist specifically for first-time home buyers.
So, let’s get started!
“That’s why I’ve made it my MISSION to educate my buyers… knowledge = empowerment in my eyes.“
PREPARING TO BUY A HOME
A question I get asked all the time is “When should I start looking for a home?” Truthfully, it depends on your situation (which I know is not the answer you’re looking for). However, in an ideal world, you should contact a real estate agent or lender at least 3 months MINIMUM before you need to be in your new home.
It generally takes 45-60 days to close on a home depending on your loan option or type of property, while a construction loan can be anywhere from 2 to 4 months. So, that gives you an additional month to month and a half to get pre-approved, start home shopping, and submit an offer on one you love. (We’ll go into this in more detail later.)
There are also several factors to consider in preparation of purchasing a home:
- What size of home are you looking for? Do you need a specific number of bedrooms or bathrooms?
- What price range or monthly payment amount are you most comfortable with?
- Are there specific amenities you’re looking for in your home? Such as a pool, garage, finished backyard, etc.?
- How much money do you have to use as a down payment, if any?
STEP ONE & TWO: FIND AN AGENT + LENDER
Depending on your first move, you could really be doing one of two things: finding a real estate agent or a mortgage lender.
In my opinion, it really doesn’t matter which one you do first because you can’t move forward without completing both of these steps. If you find an agent first, they’ll likely help you find a lender that fits your needs and vice versa.
We will start off with choosing your lender. You will want to get a pre-approval letter before you start shopping for homes.
So right now you might be asking yourself, well what’s the point in having a pre-approval before you shop for a home? Well actually there are a couple good reasons as to why you should get one.
- – It gives you an idea of the amount that you can lend up to. This will come handy in the home search process so you’re not wasting your time looking at homes out of your budget.
- – It gives you the ability to place a solid strong offer and shows sellers that you’re a serious buyer. Your agent will include the pre-approval letter in the offer.
Remember, a well informed agent can also help connect you with a lender that meets your needs.
Secondly, choosing an agent. I like to meet with my clients before we start home shopping for a consultation to assess their needs. Taking a consultation approach is key to finding the right home for you. During this time we will exchange information and go over things like:
- – What you’re looking for in a home.
- – The area of town you’re most interested in.
- – What your buying timeline looks like.
- – If you’ve been pre-approved by a lender yet.
- – And if we’d be a good fit to work together.
If you’re in another state where I can’t help you, I highly suggest you request a face-to-face consultation with the real estate agent you’d like to work with. You want to be 100% sure that your agent can make you a priority and get you through the process as seamlessly as possible.
STEP THREE: START HOME SHOPPING
Once you’ve met with your agent and have a pre-approval letter from your lender, it’s time for the fun part, SHOPPING! WOOHOO!
At this point, if you were a client of mine, I’d have you set up on a personalized, online MLS home search. Taking the gathered information from our consultation, I will create a list of potential properties that meet your criteria. This is sent to your email so you’re not spending countless hours searching on twenty different sites trying to research properties.
A great advantage of this personalized search is that it will send you everything that is new on the market, properties that have been price reduced into your price range, everything that matches your criteria and even properties that have come back on the market from a deal that has fallen through.
You will then go ahead and pick out what you like, say no to what doesn’t fit your needs and schedule a day to walk through these homes. Typically, I don’t show more than 6 homes in one day to my clients because after 6, they’ll all start to blur together and it becomes counterproductive.
Other agents may do something different, however, this is what I’ve found to be most effective.
Viewing properties are also going to be on your schedule. Some real estate agents, like myself, work 7 days a week. I want to work around your schedule and be available when you’re ready.
After you’ve found the perfect home for you, your agent will write and submit a purchase offer to the seller’s agent. The seller’s agent will then present the offer to the seller’s who will decide to either accept the offer as-is, counter your offer with different terms, or completely reject the offer.
STEP FOUR: OFFER ACCEPTED- UNDER CONTRACT
The seller’s accepted your offer! HOORAY!
Once the offer is accepted, the home immediately goes under contract and the documents are sent to the Title/Escrow company who is a neutral third party and will make sure the contract is executed exactly as it’s written.
Your inspection period also begins shortly after the offer is accepted.
STEP FIVE: ESCROW OPENED + LOAN PROCESSING BEGINS
I know these sound like big, fancy, complicated processes, however, they basically mean that the title/escrow company and mortgage lender are starting to work on your home purchase.
The title company will start researching to make sure the sellers of the home are the actual owners. They’ll also ensure that there are no other funky things going on with the home that will affect you as the owner later on.
At this point, your agent will instruct you on where you need to deposit your earnest money. Earnest money = “I’m serious money.” Think of it as a deposit on an apartment lease, it just shows the seller how serious you are about closing on the home.
The title/escrow company and lender will also start requesting documents from you as they start processing. Just make sure you’re checking your emails, texts, and calls often so you don’t miss anything. Turning in all requested documents in a timely manner will ensure your transaction is closed on time.
STEP SIX: INSPECTION PERIOD
As a buyer, you have a certain number of days [which is outlined in the contract] to hire an inspector to perform an inspection on the home.
There are several different types of inspections:
- >General Home Inspection
- >Roof Inspection
- >Pest Inspection
- >Pool Inspection
- >AC Inspection
- >And more…
You should chat with your agent about which ones are most important to have completed. It typically depends on your home, the location, and the year built to determine which ones you should have done. They will also be able to recommend inspectors to hire.
Keep in mind, you will need to pay the home inspector from your own pocket. You can confirm with your agent or the home inspection company on pricing before you schedule the inspection(s).
I will also note that you can waive the inspection period and move forward with the process, HOWEVER, I would highly discourage you from doing this.
The house may look like it’s in good condition, when in reality, there may be mold, non working items, and pests in places you really don’t want them.
Once you’ve had your inspections completed, talk with your agent about what items [if any] you’d like to ask the seller to fix. This could be anything from a broken garage door, exposed wires, plumbing leaks, etc.
STEP SEVEN: LOAN PROCESSING + UNDERWRITING CONTINUES
After the inspection period, your lender is going to order/hire an appraisal on the home. An appraiser will go to the home, assess it’s value, and share their report with the lender.
Pretty much every lender is going to do this because they want to make sure the home is actually worth the amount of money they’re lending you to purchase it.
Depending on whether the appraisal price comes in above or below the purchase price, additional negotiations may need to take place.
At this time, you may also need to provide more documents to the title company and/or lender.
STEP EIGHT: LOAN APPROVAL + SINGING DOCUMENTS
Your loan has been approved! YASSSS!
Your lender will send the loan approval and documents to the title/escrow company. Then, the title company will arrange a signing/closing appointment with you. This appointment is usually 45 minutes to an hour long.
Prepare for carpal tunnel after signing sooooo many documents. Haha!
Personally, I like to be present during the signing just in case any questions may come up that I can assist with and for moral support to give your extra confidence!
STEP NINE: FINAL WALK-THROUGH
Once you’ve signed your life away [or at least that’s what it feels like], your agent will coordinate a final walk-through of the home before the actual closing.
The final walk-through is important because you want to make sure the seller didn’t do something crazy like remove the appliances if they were supposed to stay or paint the house a funky color. You’re also going to want to make sure any unwanted items were removed and if there were any repair request that those were completed.
You’ll also want to make sure the utilities are switched to your name as of your closing date. You can work with your agent to figure out who the providers are for your new address.
STEP TEN: RECORD + CLOSE
Now that the funding of your loan has taken place and you have signed all your closing documents a few days prior we move into the final step, Record and Close.
All the documents gathered by title/escrow are sent and must be received at the Bureau of Conveyances located Honolulu at least a day prior to closing for recordation. Once the file and documents have been brought down to the Bureau of Conveyances, the day prior to recording, it would be set to record the following day. Hence, the reason that everything needs to be finalized 3 to 5 days prior to the actual closing date.
On the final day, the closing day escrow will notify both parties agents, usually first thing in the morning around 8:01AM letting us know that all documents are recorded.
You’ll then receive KEYS and YOU’RE NOW A HOMEOWNER! Pop the champagne and light the fireworks!
WELCOME HOME!
See, I wish I would’ve known this when we were purchasing our home in 2015. Even just having an overview of the entire process from start to finish is extremely insightful.
Keep in mind, some things may vary but I feel this is a pretty general timeline.
Did you learn something about the home buying process? Share your biggest takeaway!
Do you live in Hawaii and need some real estate help? I’m your girl! Send me an email here or start your home search here.
You can also download my entire home buying guide for FREE here.
I hope you’ve found this checklist helpful. It’s my pleasure to Educate + Empower first-time buyers [or really anyone] out there!
Looking to Buy a Home?
If you or someone you know is looking to buy a first home, please Contact me. I would be honored to help make home ownership a reality. For more helpful tips and island information Join my Newsletter and be the first to get notified on new updates.