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Getting Started, First Time Homebuyer, Homebuying 101

What Are the Steps to Buying A Home? Part 2

What You'll Learn: What Is Involved in Each Step in the Homebuying Process


We’ve already covered several steps involved in buying a home in the first part of this three-part article series. If you haven’t yet read Part 1, you may want to do so before reading Part 2.

The previous article covered:

  • Understanding Your Housing Needs & Wants
  • Start by Checking Your Credit Score
  • Knowing What You Can Afford
  • Understanding the True Cost of Homeownership
  • Creating & Sticking to Your Budget
  • Maintaining a Stable Job History
  • Saving for a Down Payment
  • Start Shopping & Understanding Different Types of Mortgages
  • Getting Preapproved for a Mortgage

Let’s move onto some additional topics that will help you on your journey of buying a home.

How Do I Find the Best Real Estate Agent?

You may initially consider choosing a real estate agent simply because the realtor is the listing agent on a house that caught your eye. Their name is on the “Home for Sale” sign, and you call them for more information.

Here’s something to know about realtors. There are typically buyers’ agents and sellers’ agents. Just like it sounds — buyer’s agents represent the buyers. And seller’s agents represent the best interests of the sellers.

Generally, as a buyer — you won’t want to use the same agent as the seller. You’ll want an agent that is representing your best interests.

Whether you’re buying or selling, it's essential to meet and interview multiple real estate agents until you feel comfortable with your choice. You may spend a good deal of time looking at dozens of homes. Ensuring that your agent understands your needs and wants from the beginning will save everyone valuable time during the home search.

One thing to make sure of is that your realtor is available to show you homes at times that are convenient to you. An agent who isn’t available because they’re too busy with other clients or is part-time can be a source of frustration, especially in a competitive market — so choose wisely.

A real estate agent referral from a friend can be an excellent place to start. But before you agree to work with an agent, it’s wise to meet and interview several before making your final choice.

Real Estate Agent’s History

Review the agents’ history of buying and selling. Ask questions about their experience and their knowledge of the area.

Look at this process like a job interview. The agent you choose is going to be working for you and your interests. Understand their qualifications and ask them why they would make an excellent agent for your needs.

Lastly, it's also very important to choose a real estate agent who is very familiar with the neighborhood you are looking to buy in. They’ll know a good deal when it comes up, and on the reverse side — they’ll recognize when a home is overpriced. Their experience and knowledge will help you in crafting a good offer.

How Do I Find the Best Mortgage Lender?

Just as important as choosing the right real estate agent is selecting the right mortgage lender. Working with a loan officer requires trust — you are going to be giving them all of your financial and personal data. You want to make sure that you make the right choice.

Also, if you know you’re going to apply for a particular type of loan — for example, a VA loan, it’s important to work with a lender who has experience with that type of mortgage. For example, when it comes to VA loans, the best lenders understand the guidelines like the back of their hand, and they know how to move a VA loan along as fast as possible.

What Are My Housing Priorities?

When purchasing a home, there are multiple things you need to consider. Here are a few points to think about when you start viewing properties.

  • Are you focusing on a single-family home, a condo, a townhouse, or a duplex? Does the property have additional homeowner association dues?
  • Would you like to live in a gated community? If so, what special rules do they have?
  • What is the commute to and from work, and what does that look like during rush hour in terms of time and congestion? Make the trip during rush hour before you put in an offer to test this out.
  • How much property are you looking for? Do you want a large yard for kids and pets? Be sure to understand the upkeep, maintenance costs, and workload.
  • Do you have pets? Take a look at the yard, the proximity of area parks and any condo, homeowners’ association (HOA), and municipal restrictions before you finalize your buying plans.
  • What are the schools like in the neighborhood? Many people choose their communities by the quality of the schools.
  • What is the home’s proximity to parks, downtown (in an urban or suburban area), events, and other recreational and entertainment venues?
  • How much privacy are you looking for, and does the home afford you what you need?
  • Is the neighborhood quiet, or is there street or other noise that could be a problem?
  • Does the neighborhood have ample streetlights, sidewalks, and other safety features?
  • Do the neighbors keep their homes in good repair, or is the area rundown?

How Long Does It Take to Find a Home to Make an Offer On?

According to Trulia, it can take anywhere from four weeks to six months to find and close on a home. How long it will take you will vary depending on the market's temperature, the price range you’re shopping in, and many other factors.

The main point to keep in mind is that it can take months, so patience is essential. Many buyers put in several offers before they end up finding the home they purchase. So, as you’re shopping, don’t lose heart. If you don’t give up, you’ll find a home you want to buy.

Do You Want a Newer Home or One That Needs Some Updating?

Another point to consider is if you want a 100% move-in ready home that you won’t have to do any upgrades on. Or would you be open to purchasing a home that might need some updating?

That choice might come down to your other obligations and whether you have any construction skills yourself.

How Do You Tell If a Home Is Priced Right?

According to, the best way to tell if a home is priced right is by looking at the comps over the last 6-months. And that’s for homes sold — not the prices homes are currently listed for. Often, especially in a hot market, a seller might put their home on the market for a high price just to see if they can get it.

If there aren’t any offers, the seller will start lowering their price. That’s especially true when winter is around the corner. So don’t be fooled by a high-priced home, step back and see what happens. It’s important not to overpay because, after all, a home is an investment.

Making an Offer in a Seller's Market

When it’s a sellers’ market, that means that there are more buyers than homes for sale. So, in that case, the sellers have the upper hand. They will probably be less willing to help with any buyer’s closing costs, fix deferred maintenance, or lower their price.

Making an Offer in a Buyer’s Market

On the other hand, every home shopper hopes for a buyer’s market. In that case, there are more homes for sale than buyers. It comes down to supply and demand. When there are few buyers, the sellers who want to sell their home are willing to lower the price, help pay for some buyer’s closing costs, and often make repairs the buyer is requesting.

How Do I Make an Intelligent Offer on a Home?

As stated above, choosing the best real estate agent can go a long way to crafting and understanding what kind of offer you should make. You don't want to make such a low offer that it’s insulting to the seller. Yet you also want to make an offer that provides you with the lowest possible purchase price.

Working with a smart and skillful agent, you can craft offers that could be a win-win for both buyer and seller. For example, you may have a very strong preapproval from a lender, and excellent credit, but you might lack cash up front.

In this case, the offer might be closer to the asking price, but your real estate agent could work with the seller’s real estate agent to arrange for the seller to pay some of the closing costs. This is an example of the benefits of doing your homework and choosing the best real estate agent for your needs.

In Part 3, you’ll learn the following:

  • What is a home inspection, and why do I need one?
  • What is the best mortgage loan for me?
  • What is a home appraisal, and why do I need one?
  • How much paperwork is involved in buying a home?
  • What do I need to know about home insurance and utilities?
  • What is involved in closing on a home?

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Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5