Steps to Buying a Home

Once you've determined your needs and wants, researched neighborhoods, toured houses and narrowed it down, you're ready to take the next steps.

Step 1: Before You Make an Offer

Get your credit reports from national credit bureaus, clear them up, if necessary.
Pre-qualify for a loan with one or more mortgage loan officers. Shop around to get the best terms and rates.
Determine the amount of cash you have available for a down payment.
Work with a real estate agent to represent you as a buyer. This should be no cost to you — the seller typically pays the full commission which is split between selling and buying agents.

Gather your financial records so a lender can start the loan approval process.
Ask lender for a pre-approval letter. Indicate your your interest in that particular property.
Check the value of homes similar to the one you want. Ask your agent to do a market analysis to help determine a fair price.
Fill out a purchase agreement (PA). Your real estate agent can do this using electronic forms and signatures.
Remember, this is a legally binding document! Add contingencies, if necessary. Inspection and Financing are the most common.
Determine the amount of earnest money you will put down (typically 1-2% of the offer price). This will become part of your down payment.
Decide if you will ask the seller to help pay your closing costs (typically up to 3% of the sale price). You may want them to pay, however, covering your own costs will strengthen your offer — especially important in a seller's market.
Determine a closing/possession date. Typical closing periods last 30-45 days from time of acceptance. The date of closing can be amended later if necessary.

Continue working with your lender to complete the loan process.
Pay earnest money. Your agent will help facilitate this payment.
If you have an inspection contingency, hire a reputable inspector to examine the condition of the home you want to buy. The inspection period starts the day following final acceptance of the offer and usually lasts 7- 10 days, depending on your PA.
If repairs are necessary, negotiate with the seller about what they are and who will pay for them. Your agent will negotiate with you.
Select a closing agent and open the line of communication between closer and lender. Your real estate agent may recommend someone but ultimately it is your choice as their customer.
Stay in touch with your loan officer while awaiting your loan approval. Have your records handy during this time.
Begin making arrangements to pack and move.
As the closing nears, contact all utilities and give notification of your move.

Prior to closing day, request to view closing documents. Get a copy of the “Closing Disclosure” (CD) which lists all closing costs. Contact the closing agent with any questions or concerns regarding listed fees.
Do a “final walkthrough” of the property with your agent just before closing (or night before).
Get the deed to transfer ownership of the home from the seller (your closer will facilitate.)
If financing your purchase, sign a promissory note stating that you’ll pay back the mortgage loan with monthly payments at a certain interest rate (your lender will facilitate.)
Pay the balance of your down payment along with closing fees.
Pre-pay taxes and insurance to your escrow account if the terms of your loan require this.
Get the keys, door openers, etc. at the closing table.

Take your deed and social security number to the courthouse to file for homestead tax status, if applicable.
Move into your new home at the time you and the seller agreed upon, typically immediately after closing.
Put all utilities in your name — electric, gas, water, trash, recycling, etc.

Reference: Minnesota Attorney General's Office, www.ag.state.mn.us