The Buying Process

First, determine what you can spend on a down payment. Use our Mortgage Calculator to help!

A common myth when it comes to a down payment is that you need 20% of the purchase price - not true! 

The minimum amount you need to purchase a house for most common loan types is 3-3.5%. 

- Make sure you have extra cash for closing costs. Closing costs tend to be 2-4% of the purchase price for buyers.

- Make sure you have enough reserve to cover your first few months of mortgage payments; your lender might require this for their own assurance.

Consider pre-qualification to get a rough estimate of your budget before you start seriously looking. Note that pre-qualification won’t negatively affect your credit!

An agent is someone who will act on your behalf, in your best interests, to guide you through what can be a complicated process and ensure you have the tools you need each step of the way to make the best housing decisions. 

- Pre-approval involves a hard look into your credit and requires you provide more evidence to lenders than simple pre-qualification.

- Pre-approval also comes with a pre-approval letter, which sellers may ask to see so they can confirm you are able to pay for the house.

Your agent will guide you through shopping for different kinds of lenders and mortgage options

The fun part! 

Your agent can set you up with a OneHome portal through our local Washington MLS*, where you will be able to see a regularly updated feed of homes that match your criteria

Once you’ve identified a few of your favorite listings online, go see them in person with your agent! 

This part of the process is crucial; buyers are able to really narrow down their preferences when they’re actually able to walk through a home and see how it feels.

*Multiple Listing Service: an agent-exclusive site that shows all listings in our area with the most up-to-date information

Once you’ve found the home you want to buy, your agent will write a Purchase & Sale Agreement (PSA) contract for you. 

This contract will detail how much you’ve decided to pay, your earnest money, your expected closing date, any contingencies, and much more.

- Your offer may be accepted by the seller, in which case they will sign your offer and you will be under mutual agreement

- Your offer may be rejected by the seller, either by agent communication or by simply ignoring it

- Your offer may be countered by the seller, in which case they will send you back a new offer in hopes you will agree to some adjustments. At this point, the ball is in your court, and you can choose to accept, reject or counter yourself.

A bank wire is often preferred because it ensures it goes directly to the escrow agent* without having to pass a check through multiple hands.

*a third party that handles earnest money and other closing details

The inspection serves as a protection to the buyer; a good home inspector will take note of any physical issues with the house, from major problems such as roof leaks all the way down to minor issues like improperly spaced fencing.

If the inspection comes back and there are major foundation or leak issues for example, the buyer has the option to negotiate with the seller to make repairs, or terminate the contract altogether.

At this point, you have found a home, signed a mutual contract with the seller, and are satisfied with the inspection. 

Now is the point where most lenders will require you to acquire Homeowners Insurance - before the loan closes.

The Underwriting Process can be thought of as a final approval after you’ve been pre-approved; your lender will verify your income, assets, debt, and the details of your new house to ensure you can pay back the loan you require.

When finished, you should receive a Conditional Approval, which will congratulate you on your loan being approved, and may ask for a few additional documents (such as a specific pay stub or evidence of Homeowner’s Insurance)

Your lender will order an Appraisal, which involves a licensed home appraiser going to the home and assessing the fair market value of the home.

Banks can only lend up to the appraised value of the home, so if you are under contract to purchase a home for $500,000, but the appraisal comes back at $490,000, the bank can only lend you up to $490,000. 

If the opposite situation happens where you’re under contract for $490,000 but the home appraises for $500,000, the bank will always choose the lower of the two amounts.

The vast majority of the time, homes appraise at the purchase price. In the case that it doesn’t and you find yourself needing to come up with extra money to make up the difference, this is where the appraisal contingency can kick in, and the contract can be renegotiated to lower the purchase price.

Once the loan process finally comes to an end, you’ll receive a Closing Disclosure, which details your loan amount, interest rate, monthly payment totals, how much cash you need to bring to closing, etc.

- Prepare your cashiers check or bank wire to pay closing costs.

Attend the Final Walkthrough, usually the day before closing. This is done to ensure the house is still in the same condition it was in when you first went under contract

Between getting an inspection, appraisal, and waiting for loan approvals, it can be a month or so from the time you signed until the time you close.

Traditionally, closings take place with the buyer, seller, their real estate agents and an escrow agent all together around a table signing documents and exchanging funds. 

This is hardly ever the case in Washington. 

Typically, as a buyer, you will meet with the escrow agent on your own time and sign documents needed, or this may even be done remotely.

Your agent will have met with the listing agent to get your keys, and hand them over to you!