Here is a general overview of the process you take when buying your fist home.
First you need to decide to make the decision to buy a home. Living with the parents and sick of it? Tired of your nosey landlord inserting themselves into your life? Both great reasons to buy a home.
Once you know you want to buy, you will need a buyer's agent. Buyer's agents are realtors who work with buyers to buy homes. They are typically paid a 2.5 - 3% commission that comes out of the Seller's proceeds. You will want to work with someone that you like, trust, and works full time. You can shop for agents by attending open houses in the neighborhoods you are interested in. But you don't need to do that. Just work with me!
Now that you have your realtor, you need to meet with a lender for pre-qualification. If you do not already know which lender you would like to work with, ask your realtor. They will gladly offer a few referrals. Like your realtor, make sure it is someone who you like and trust. This makes the entire process smoother. Your lender will review your financial documents, answer any questions you have about mortgages, and pre-qualify you for a mortgage for a specific amount. Now you are ready to start seeing homes.
Now that you've assembled your team and know how much you can spend, you can begin your house hunt in earnest. Go to open houses, check out zillow, schedule showings with your realtor. Be prepared to make an offer. Depending on the market, homes may be selling very quickly.
That house of your dreams, it exists and you found it. Time to make an offer. An offer will have the following elements: price for home, earnest money, intended down payment amount, a pre-qualification letter from your lender, a suggested closing date, and sometimes a love letter (from you to the home). Ask your realtor for their advice before you make an offer. Things to consider: buyers vs sellers market, recent neighborhood sales, listing history, sellers' backstory, financing options, and many more things!
You made an offer and the Seller has accepted it. Congratulations! Almost done. You are now under contract. A number of timelines start the moment you receive your signed offer back. Now is when you pick your escrow/title company. There are two in Whatcom County: Chicago Land Title and Whatcom Land Title.
Every contract is different. But a 10 day inspection period for the buyer to inspect the home to be purchased is standard. During this period, you will hire a home inspector (about $600) to inspect the home. They will conduct a visual inspection, take a bunch of pictures, and then send you a report. They are paid by you, to find the warts of the property. If they find a serious issues, you as the buyer can break the contract or try to negotiate for repairs or money.
By now your Title Officer will have completed the title review on your almost property and sent you the title report. This report consists of a thorough review of the land. Are there easements, land use restrictions, mineral rights, etc.? If you are purchasing your land and want to do something specific with the property, schedule a meeting with your title officer. They can answer those questions. They will alert to you any potential issues.
Now the bank gets a chance to check out the property. They send an appraiser into the home to appraise the value of the home. They determine if the home is a sound investment for the bank. If a home cannot appraise for the value of the loan amount, then the loan will not be issued.
We are now a few days away from the closing date. The home has appraised. It is very important to answer any questions you receive from your title/escrow officers ASAP. They will provide you with a settlement statement. The statement tells you how much money you need to put into escrow. You will also schedule a time to come to their office, to sign final documents. Once you sign, the sellers sign. If all goes according to plan, the home closes on time.
If not negotiated else wise, you get possession at 9 PM on the day of closing. Pop a bottle of bubbly and relax. You are now a property owner! Expect to shortly develop strong opinions about property taxes and kids playing on your lawn.