Buyer's Guide

The buying process should be a fun and exciting time for home buyers but it can often be a stressful process.  When we work with clients, we try to make each step of the home buying process as easy as possible.  With doing that, we like to educate our clients so they fully understand the process.  To help understand the entire process, we've broken down the major steps of the home buying process.  The exact order of the steps might vary from transaction to transaction but the steps themselves typically take place in every real estate transaction.  If you would like to learn more about a specific step in the process or would like help buying your next home, reach out to us via the Contact Us tab at the top right corner of the screen.  Happy learning!

Get Pre-Approved

So while being pre-qualified is a quick way of finding out how much you roughly can afford, being pre-approved is the only way to prevent you from shopping for a home out of your budget.  Also, when you make an offer, we will submit it with your pre-approval letter from your financial institution to make your offer a lot stronger since the seller knows you can obtain a mortgage for the desired amount.  The four things you should know about getting pre-approved are: it's free, takes about an hour with a local lender, doesn't hurt your credit, and doesn't lock you in to using that lender for the loan. Getting pre-approved is a MUST in this market!  

Find A Great REALTOR®

So the term REALTOR® gets interchanged with real estate agent often, but did you know they are different?  A REALTOR® is a real estate agent who is a member of the National Association of REALTORS® and thus is held to a higher code of ethics where a regular real estate agent is not. 

When picking a REALTOR® to work with, find someone that has your best interest at heart and knows their way through the numerous contracts that need to be signed. A good agent will have a great understanding of the area you are looking to buy in and will know the market value of the property. 

Who you work with is so important in the DC Metro Area.  Most properties get multiple offers so it is imperative that you work with an agent who can give you competitive advantage.  Your REALTOR® will also be presenting the offer and doing all of the negotiation on your behalf.  Thus, your ability to win your next home and get the best deal is all up to your agent so pick wisely!  A good REALTOR® should also help you get the best loan product possible.  Most lenders don't give you the best rate possible so working with a REALTOR® who knows how the mortgage business works can save you a lot of $$$$!

It is normal for a REALTOR® to ask you to sign an Exclusive Right-to-Represent contract before showing properties.  It outlines the duties of the broker, the broker-agent relationship, and the obligations to the buyer.  This is your agreement to work with that agent in finding a home and ensures that the agent gets paid if you end up purchasing a home.

Here are some of our past client reviews that will explain further why it's important to work with a local expert who puts their clients in the best position possible in this tough market. 

Go House Hunting

Now you will be the star of your own House Hunters show, and find the condo/townhome/detached home that you have been wanting for so long.  The fun begins!

Make An Offer

Alright, so after the numerous houses that you visited with your REALTOR®, hopefully there will be one that will stick out. Now it is time for your REALTOR®  to do a comparative market analysis of the similar properties that have sold and are currently on the market. 

After determining if there are any major issues that need to be fixed, it is time to submit a competitive offer with an earnest money deposit (typically 1-3% of the purchase price).  An earnest money deposit is given to show the seller that you are a serious buyer. In Virginia, it has to be deposited in an escrow account within 5 days of contract ratification.  If the property is closed, it is applied towards closing, but if the contract is voided because of a failed contingency, it is returned to you.

In Northern Virginia and Arlington, the housing market is very competitive and it is typical that there are multiple offers. Thus, it is important to have a REALTOR® who understands the current housing market in order to make a strong competitive offer with your pre-approval letter.

Our client's have had great success in multiple offer situations because we establish great rapport with the listing agent and use this Washington Post Article to structure all our offers.  Give it a quick read!

Accepted Contract

As mentioned previously, there is usually negotiation that occurs and the first offer is typically not accepted.  Thus, negotiations will go back and forth until both sides come to an agreement.

Finally, the sellers will accept your offer and agree to the certain contingencies that you have set forth and both parties can sign the contract. Woot Woot!!

The house is yours, right? Well not exactly.  A lot has to happen in order for all of the requirements and contingencies to be fulfilled.  You will learn about the major contingencies in the below sections to come.

In Virginia, when you make an offer, you will receive a mandatory disclosure statement saying that the sellers do not guarantee the condition of the property and that it is your responsibility to get the appropriate inspections done.  Thus, it is important to do all of the right inspections to make sure everything is okay with home.

Handling the Contingencies

Since your home purchase is probably the biggest purchase you will make in your lifetime, it is typical to have certain criteria that the purchase contract is contingent upon.  Contingencies can quickly kill a real estate transaction from happening hence the importance of having a good REALTOR® to solve your contingency problems. Common contingencies include:

Home Inspection - Normally, ordered by the buyer, a home inspection identifies any major problems or structural issues with the property.  If there is a problem and the sellers refuse to fix it, the buyers can cancel the contract without losing their earnest money deposit.  This is discussed further in the Home Inspection section.

Home Appraisal - A typical requirement of the buyer by their lender, a home appraisal is performed by a licensed Appraiser to determine the market value of the property.  I will discuss it further in the Home Appraisal section.

Sale of Home -  In most cases, buyers have to sell their current home in order to afford their next home purchase.  Thus, this contingency ensures buyers can cancel a sales contract if their current home does not sell.  The length of time in order to sell the home is negotiated.  This is one of the worst contingencies to have in the eyes of the seller.  In multiple offer situations, your offer will most likely be quickly dismissed as this contingency is a huge risk to the seller.

Settlement of Home - Similar to Sale of Home, if you need the sale of your current home to pay for the new home, you will not be penalized if there is a delay in settlement of your first home.

Financing - For some reason if the buyer is unable to get proper financing from their lender, then the buyers are able to cancel the contract without losing their earnest money deposit. 

Contingent No Kick Out - The seller cannot accept any other offers and kick out the current offer.  This is very common in Virginia.

Home Inspection

​As talked about in the contingency section, the home inspection is a major hurdle to get through in the home buying process and almost always occurs.  It is the buyer's responsibility to pay for the inspection and it typically costs around $500-$800 depending upon the type of home and the type of inspections you have done.

In this step, a third party certified inspector comes to the house and looks at the major components of the property like the foundation, framing, roof, electrical systems, plumbing, etc.. to see if there are any minor or major issues with the property.  If issues are discovered, the buyer will ask the seller to repair the issues or ask for a reduced sales price in order to fix the issues.  The seller has the option to accept, counter or decline the requests. 

Negotiations occur until an agreement is reached. As agreed upon in the contract, all inspections must be performed by a certain date.  In Virginia, a radon inspection and termite inspection are often performed along side of the normal mechanical inspection.

It is important to note that Virginia still follows the concept of "caveat emptor" which means "buyer beware."  Thus, it is the buyer's responsibility to inspect the home thoroughly to identify any problems.

Home Appraisal

As mentioned in the contingency section, a home appraisal takes place at the request by the buyer's lender at the buyer's expense (~$500).  Lenders require home appraisals because they want to make sure they can recover their money if the buyer defaults on their mortgage payments.  Thus, the appraisal gives the lender a professional estimate of what the property's market value is based on recent sales of similar properties in the area and the property's condition.  

If the property is appraised for a lesser value than the purchase price, it is up to the buyer and seller to find a solution to make up with the difference.  For example, if the buyer's put $40,000 down to buy a $200,000 house, the LTV ratio would be 80% ($160,000 loan / $200,000 house = 80%).  If the house was then appraised for $180,000, the LTV ratio would be 89%.  Therefore, the buyer and seller have to negotiate to come up with $16,000 to bring the LTV ratio back down to 80%.  If they cannot, the buyers can use this contingency to cancel the purchase agreement. 

On the flip side, if the property is appraised for more than what the sales price is, then that indicates the buyer received a good deal and has a lower LTV.

In the DC Metro Area, because there is such a demand for homes and the prices of properties are constantly raising, the appraisal typically comes back at the agreed sales price.  We've never had a contract where the appraisal has come in less than the sales price.

Securing the Mortgage

Obtaining a mortgage is an ongoing process that occurs throughout the home buying journey starting with getting pre-approved to transferring the money at settlement.  Once you have a ratified contract, you begin the loan application with the lender you decide to work with.  It is a lengthy process and can be a determining factor on whether a real estate transaction closes or not.  To learn about the mortgage process and everything you should know before getting a mortgage, click the button below to visit the Mortgage 101 page.


So any issues that occurred throughout the buying process have been worked through and you have reached the settlement stage.  Congratulations!!  Settlement is also referred to as when closing occurs at the end of the buying process when the buyers sign loan documents and any documents related to the sales transaction.  Once the documents are signed and payment has changed hands, the keys are handed over to the buyers.  Yay! How exciting!  While that sounds easy, a large amount of work goes into settlement.  Below are the steps in the settlement process.

1. A title company or attorney conducts a title search to see if there are any liens or assessments on the title.  Once all liens are taken care of, title insurance is prepared and a closing date is set.

2.  The total cost that the buyer needs to bring to the settlement is then determined.  This includes mortgage closing costs, property taxes, and utilities paid to the date by the seller.

3.  A final walkthrough is performed to ensure the same condition of the property as when the process began.

4. Buyer signs all closing documents and funds are transferred.

5.  The title company or attorney records the transaction and deed with local court.

6. Finally, the buyer is handed the keys and possesses the property.

Moving Day

Finally, you have closed on the house and are prepared to move into your new home.  How exciting!  Here are some tips to make the moving process less stressful.

1.  When packing up, categorize boxes by rooms so it is easy for the movers to know where they go.

2.  Make sure to read through the contract with the moving company to confirm everything is right before they ship your belongings somewhere else.

3.  Supervise the packing process to ensure that they don't break anything. 

4.  Perform one last check of your house to make sure you don't forget anything or to make sure there were no damages caused by the movers.

5.  Once arriving at your new home, do a walk through with your real estate agent to make sure everything is how it is supposed to be like checking to make sure all of the utilities work.

6.  Finally, don't overwhelm yourself.  Don't schedule any other services on moving day. Congratulations!


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