September 23, 2016 | Joe Kubelka
Navigating the process of home buying can be an intimidating process for first time buyers as well as those who have purchased in the past. If you’re already familiar you know how fast the process can go, especially during the beginning stages of the transaction. This guide is meant to be a simple introduction to the home buying process for those new to real estate as well as those who are just looking for a refresher.

The specifics can vary from market to market but for the most part the basics are generally going to be the same across the country. This guide is being written assuming you will be purchasing your home with a loan and not a cash purchase.

That being said, the first step is find out how much you can afford by speaking to a loan officer to get prequalified for a loan. There are different types of loans available so your loan officer will be able to help guide you through figuring out what type of loans you’re eligible for as well as what terms and conditions are most favorable for your situation and what you’re trying to achieve with your purchase. Your loan officer will ask for all sorts of information from you. Tax returns and pay stubs are common items so you’ll want to make sure you have all your records in order. They are going to be asking a lot of questions and digging deep into your finances to make sure the information you provide them is accurate so they can, in turn, give you a realistic idea of how much they can loan you.

During the pre-qualification process the amount of money you plan to put down will also be established. It’s important to remember that even if you qualify for and plan to use a first time homebuyer loan or VA loan with 0% down there are still costs at closing. In the Hawaii market the buyers and sellers split the closing costs. The amount can vary but I tell my clients to plan on having 1.5-2.0% of the purchase price available in cash for closing costs, taxes, etc. You should ask your loan officer and escrow company for your estimated closing costs early in the transaction.
Now that you’ve got your loan figured out and you’re armed with the knowledge of how much you’re able to spend you can start the fun part! Choosing and agent and searching for your property!

There are plenty of resources these days for finding available properties. Obviously the internet is everyones goto resource so I always like to give my clients a little bit of background on how the internet searches work. Whether your using Zillow or Trulia or an agent’s individual website site like, they are all using a feed from the local MLS (multiple listing service) to provide you with the active listings in your area.

Once you’ve chosen your buyer’s brokerallow them to reach out to listing agents to make appointments to view properties! That’s what they’re there for! When an agent is representing a buyer the buyer pays nothing to the agent. When a person lists a property for sale there is an agreement between the listing agent and the seller. So, lets say they have agreed on a 6% commission to sell the house, when the property sells and the title has been transferred to the buyers names that 6% commission will, typically, be split evenly down the middle and each agent will get a 3% commission upon closing. So don’t be afraid to ask your buyers agent to find our more information and set up showings for you. Let your agent show you their level of service, as it will be reflected throughout the transaction.
Now that you’ve been looking at properties and have identified one you’d like to make an offer on your agent should provide you with a CMA (comparative market analysis) which will contain information on recent sales in the neighborhood or condo complex you’re interested in. You and your agent will be able to use this information in conjunction with the listing price of the property you’re interested in to come up with a reasonable offer. Every market is different. In some areas of the country homes are selling for over asking price and in other areas sellers are expecting to get a certain percentage under their asking price so it’s important to be aware of what is happening in your market.

Your agent will then write up an offer and ask your loan officer for a pre-qualification letter. Both of which will be submitted to the sellers agent for their clients review. Sellers are typically looking for the strongest and cleanest offer with the least amount of contingencies. A contingency can be something like needing to sell another property in order to have enough money to buy the new property, for example. When dealing with a loan a 45-60 close is common in order to give enough wiggle room to account for any unforeseen circumstance that may arise. A standard contract will have a portion stating how much time the sellers have to respond and then you wait!

Please keep a look out for Part II where I will be covering the second half of the process which happens with an accepted offer!

In the meantime, download our Buyers Guide or I’d be happy to print out a copy and mail it to you. All of this and more is covered and is valuable information for buyers!


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