Lois Marris | RE/MAX Results | Rochester Minnesota
Buying a home can be an exciting time but the process can be a bit overwhelming even for the experienced buyer. Here is an overview of the home buying process in Minnesota. This handy list will get you started and you can visit our website (www.RochMnHomeSearch.net) for additional helpful tips on each and every step of the process.
1. Get started
a. Determine your monthly income
b. Determine your monthly debt payment
c. Determine debt-to-income ratio
d. Get your credit score to 630 or above (700s if possible)
e. Save for a down payment
f. Estimate your closing costs (estimate 3% of sales price of home)
g. Estimate how much home you can afford
Read more on how to do each of these steps here
2. Hire a real estate agent
a. Interview several agents and pick the one you feel is most qualified, trustworthy and with whom you are most comfortable.
b. Meet with your agent of choice to develop your timeline, goals, needs, etc.
3. Visit a mortgage lender
a. Different banks have different loans and different qualifications for borrowers. Find the one that has a loan program that works for you.
b. Get pre-approval letter
c. Possibly apply for your mortgage. Your mortgage advisor will counsel you on the best time to officially apply for a mortgage, lock in your interest rate, etc.
4. Go shopping for a home
a. Look online, at open houses and with your agent.
b. If you look at multiple homes, keep a top 3 list.
c. Revisit your top 3 list to help determine your first choice
5. Make an offer
a. Get a Comparable Market Analysis (CMA) to help you determine the value of your first choice home.
b. Review the home’s disclosure statement
c. Determine real estate market climate. Are you in a buyer’s market (more room to negotiate) or seller’s market (less room to negotiate)?
d. Write an offer based on the CMA, condition of home and current market climate
6. Negotiate offer and come to an agreement
a. Your agent will present your offer to seller or seller’s agent
b. Offer will be accepted, rejected or countered
c. If you receive a counter offer, you can accept it reject it or counter back.
d. Come to an agreement on the house or go back to step 4 and your second choice of homes.
7. Get a home inspection
a. Get a basic home inspection
b. In Southern Minnesota, consider a radon test as well
c. Your home inspector may suggest further inspections such as furnace, foundation, roof, etc.
8. Negotiate for repairs
a. If the inspection report identifies costly repair or safety related items you may choose to negotiate with the seller to do the repairs at their expense.
b. Keep in mind that you are in negotiations again and you can lose the house if negotiations are not successful.
c. You do not have to ask for any repairs. You can simply remove the inspection contingency and move forward with the purchase of the home.
9. Get an appraisal and proceed with mortgage process
a. Continue the loan application process with the lender now that you know you will need a mortgage
b. Your lender will likely order an appraisal once the inspection contingency is removed. This is done to assure the bank your home is worth the amount of the mortgage.
10. Get title work done
a. In Minnesota, buyer and seller have their own title companies preparing the paperwork for closing
b. The buyers Title Company will do things such as make sure the seller has the legal right to sell the home, discover unpaid real estate taxes or mechanic liens, etc.
11. Get home insurance
a. Compare different insurance company rates for home hazard insurance.
b. In Minnesota, pay special attention to clauses regarding sump pump failure, basement seepage, etc.
12. Transfer utilities and mail service
a. A couple of weeks prior to closing, contact each utility company and have utilities transferred into your name effective the day of closing
b. Visit www.usps.com to have mail forwarded to your new address effective the date of closing
13. Do a final walk through
a. The day before or the day of closing, walk through the house
b. Make sure the home is in the same condition it was the day you came to an agreement on your offer
c. Make sure the home owner has removed all personal belongings and disposed of their unwanted items and trash.
14. Attend Closing
a. Bring your photo ID
b. Bring any money needed at closing in the form of a cashier’s check or arrange for a wire transfer
c. Plan on about one hour for closing
15. Move in!
a. You will likely get a key to the home once your mortgage company has funded the sale
b. Take three things with you for moving day: water, snacks, toilet paper (you’re welcome)