10-Step Home Buying Process

STEP 1 - Wants vs. Needs

What is your current situation? Are you a first time homebuyer, currently renting or wanting to move to a bigger or smaller home? Make a list of features you absolutely have to have in your new home and a list describing your perfect home. This will help both you and your agent find the house of your dreams.

STEP 2 - Pre-approval vs. Pre-qualification

Knowing how much you can afford will help to streamline your home buying process. Pre-qualification is a relatively short process where your mortgage provider takes into account basic financial information and qualifies you for a certain amount. Pre-approval is generally conducted after pre-qualification and when you find the property you want to make an offer on. Your mortgage provider conducts a thorough investigation on your current financial status and all relevant information is used to determine the amount of loan you will be eligible for. Many sellers now look for a mortgage pre-approval letter to accompany the offer as evidence of the buyer's ability to finance the purchase.

STEP 3 - Neighborhood Information

In your "needs vs. wants" list, list the neighborhood(s) you would be willing to consider. This will again streamline your searching and will allow your agent to conduct thorough searches using all available resources.

STEP 4 - Home search

Using our customized search database, you will be able to search the entire Chicago area MLS and the neighborhood you have selected. Your agent will set up your web page according to the search criteria you have selected, and will continually send you updated information of new property.

STEP 5 - Making an Offer

Once you have found the ideal home, it's time to make an offer. Your agent will do a comparative market analysis of the property and assist you in determining the terms of your initial offer. Initial earnest money is offered to the seller at this time.

STEP 6 - Negotiating to Buy

Negotiating until a final price is agreed upon is common practice in real estate. Keep in mind that almost anything is negotiable including price, earnest money, time allowed for attorney review and inspections, as well as the closing date. Your agent's expertise in this process is a great advantage to you.

STEP 7 - Vendors & Attorney Review

Once your offer has been accepted for the property, several processes begin:

You need to select an attorney to review the contract right away. If the property has a homeowners association, your agent will help to get declarations, by-laws, and budgets for you to review with your attorney. Many associations require a move-in packet to be completed for their management company as well.
It is strongly recommended that you have an independent home inspection completed prior to the expiration of the attorney approval period. A new Illinois statute requires that home inspectors be licensed by the state and your agent can help you with such referrals.<.li>
Your lender will also need a copy of the contract and will conduct and appraisal to insure that your investment is sound. Depending on the lender, type of loan, or local zoning requirements, additional special reports like termite or radon inspections may be required.
Your agent can provide referrals and will coordinate with the different vendors to make sure that everything necessary is completed in a timely and legal manner.

STEP 8 - Pre-Closing

Once the seller and buyer attorneys approve the contract and the balance of earnest money has been paid, the attorneys will be ordering all of the documents needed to complete the transaction and schedule a closing with the title company. During this time your lender will be completing the underwriting process to finalize the loan as well.

If you are purchasing a property with a homeowners association, the association will provide proof of hazard insurance for the building to your lender and attorney. If there is no association, your lender will require that you provide an insurance binder showing that you have secured hazard insurance for the property at this time.

Here again your agent's assistance in providing referrals and coordinating the activity to insure an on-time closing is invaluable.

STEP 9 - Closing

This is the process where transfer of ownership takes place, from the seller to the buyer. Your attorney will guide you through every step and your agent will be there to answer any questions that arise regarding the property.

STEP 10 - Post-closing

Congratulations, you are now a new homeowner. You will need to set up local utilities and your agent can provide you with a list of local utility vendors.