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Buying a Home in the Twin Cities
If you are wanting to buy a home in the Twin Cities (or really anywhere in Minnesota) it is important to understand the overall process in order to plan your budget, timeline and avoid overlapping payments. Whether you own a home or are buying the first home this timeline will help you prepare!
#1. Connect with a Local Realtor
There are a lot of Realtors out there and none of them are exactly the same. I recommend reaching out to at least 3 Realtors and set 15-20 minute conversations with each. See post “Choosing Your Real Estate Agent” for a list of questions I highly recommend you ask. Once you have selected a Realtor you will go over your timeline, requirements, wants, deal breakers, location, etc. and will be set up on a search on your area's MLS (multiple listing service) if you also have a confirmed budget specified by a lender. The MLS is the hub of all real estate and is going to have the most information, along with the most accurate information. Other sites pull their information from these sites. Your agent will also share any other tools with you to use as you start your search. I love sharing the HomeSpotter app with my clients because it is the only one directly linked to the Minnesota MLS (Northstar MLS) and makes it really easy to view homes on the go.
#2. Connect with your lender
After your initial conversation with a Realtor one of the questions I recommend is asking them for lenders they enjoy working with and think would be a good fit. You really can’t start your home search until you know your budget and any agent, who is worth working with, won’t actually show you homes until this has been verified in the form of a preapproval. Keep in mind your credit, income and debt will be reviewed in order to provide a preapproval so don’t make any crazy changes and definitely do not switch jobs, or reduce your hours, when you are in the homebuying process.
#3. Ask for an educational home tour & start attending open houses
Once you have your search set up there is a huge value in getting used to seeing homes vs looking at them online. We always like to take our clients out to see 3-5 homes together for pure education and getting in the swing of things. This allows you to be touring a home with the eyes of being a homeowner and also allows you to see what your agent is looking for. Beyond this, open houses can be a great way to experience home tours while you are trying to figure out exactly what you are looking for. Keep in mind the agent at the home represents the seller and not you, so it is best to state who you are represented by upon entering.
#4. Showings, showings, showings!
Alright, for this next step I’m going to fill you in on something that most agents won’t tell you but will make the process of elimination of homes you see much easier. The home tours you set with your agent after the educational home tour should only be homes you feel you would write an offer on, as long as there are no big surprises and what you are seeing online vs in person is a match. Period. If you think a home is cute but know you would never live in the area, is too small (or too big), or essentially just know you would never offer on it… don’t waste your or your agent’s time going to see it.
Another unpopular opinion: don’t bring anyone besides the decision makers (aka the ones who are paying for it!). Family and friends mean well but most of the time you receive unwarranted opinions that add more stress to you, especially in Minnesota where we like to please the people we like. Remember you are the one taking this step and the only opinion that matters is your own! Too many cooks in the kitchen is, well, just too many cooks in the kitchen.
#5. Offer on a property
Once you find the home you love and want to write an offer on there are a couple of things you will decide on and strategize about with your Realtor based on that home’s specific scenario (seller needs a delayed possession, in multiple offers, has been on the market for awhile, etc.). Here are the things to decide on:
Purchase Price
Earnest Money (in MN this is due within 2 days of an accepted offer!)
Closing Date
Inspection Period
Seller paid closing costs
Any other contingencies as needed
#6. Earnest Money & Inspection Period
If your offer is accepted and you have an inspection contingency your next step will be the inspection period & sending your earnest money in (typically an electronic deposit- refer to your agent). Your agent should have a couple of referrals for inspection and should notify you of any recommended additional inspections such as a sewer line or radon inspection. Always schedule your inspection for the earliest available time so that if there is anything to negotiate or get quotes on you have enough time to do so.
#7. Appraisal
After the inspection period is finished you or your agent will notify your lender to order the appraisal. The appraisal is there to ensure what you're purchasing the home for is the value of the home. There is typically a cost to this and it varies by lender, most lenders have you pay this on the day of closing when you pay the remaining balance which includes your closing costs. On average receiving the appraisal report back will take 5-7 business days from the date the appraisal occurs.
#8. Closing day!!
Wooo! You’ve made it! On the day of closing you will bring the remaining balance down payment (Total Down Payment - Earnest Money= Remainder) and you will bring your closing costs. Closing costs are the total of items like: title examination fee, home insurance, first mortgage payment, etc.