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Step-by-step guide to buying home in 2022

If you sat on the real estate sidelines in 2021, you might be wondering what it’ll take to realize your dreams of owning a home in 2022.

There are no major indicators that things will slow down in 2022, but there’s some hope that prices will increase with less fervor and there’s a possibility that supply will also increase, if ever so slightly.

Regardless of the exact market conditions, future homebuyers must prepare and position themselves to conquer the competitive real estate market. With that in mind, here are the steps you should expect to take as you get closer to the homebuying finish line.

Start the loan application

The order of operations to homebuying starts with the loan application.

Starting this process early will give you enough time to get your affairs in order and enter the market from a position of strength.

Dust off credit report

If it’s been a while since you’ve taken a close look to your credit report, now is the time to pay extra close attention.

As part of the application process, our team will pull your credit report, but you can do the same on free websites or through your credit card company. Getting a snapshot of the health of your credit will help you prepare for the subsequent steps.

Sign off on communications

Per federal law, you’ll be asked to consent to receive information from our office.

We will send you a link and you can submit your consent via eSign on your smartphone. It’s really that simple.

Gather documents

Your lending team will give you a detailed list of the required documents you’ll need to formally apply for a loan.

These include one month of pay stubs, two years of W-2s or 1099s, two years of federal tax returns, photo identification, banks statements and a few others depending on your unique situation.

Behind-the-scenes process begins

With all your pertinent paperwork and information submitted, the team of underwriters will begin the nitty-gritty work of processing your loan.

Our team can do it accurately and efficiently with the FastTrac underwriting program.

You can expect to receive a decision on your full loan approval within three short days, giving you insights into your exact buying power and how much you would pay on the monthly mortgage. This information is indispensable as you narrow down your wish list of homes and budget for your new life as a homeowner.

Get green light

Within 72 hours, you will receive full approval, allowing you to select your dream home that matches your budget and goals.

Submit offer

With most of the heavy lifting behind you, now is the time to make an offer on a home.

As part of the process, the selling party will ask for an earnest money deposit. This lets you get the ball rolling on the purchase and sale agreements.

Pore over paperwork

With the help of your real estate team, now is the time to review and sign disclosures. You’ll be asked to eSign to verify your intent to move forward with certain steps, such as inspection and appraisal.

Lock in rate

Once your offer is fully accepted, then you can lock in your quoted interest rate.

At the same time, the home inspection will be conducted per your agreement with the seller.

Review final list

With so many moving parts to loan processing and homebuying, it’s possible that the lender will need additional documents. That’s when the list of final needs comes into play.

You and your team will review the list and make sure everything is in and verified. This is also the time to get estimates on things like home insurance.

Order appraisal

With the finish line coming into focus, it is time to order the appraisal.

The appraisal is ordered through an independent third-party vendor and performed by an independent third-party appraiser, so all parties, including you and the lender, are formally informed of the home’s value. This process takes anywhere between a few days and 10 days. Federal law requires the lender to provide a copy of the appraisal to you.

Submit to underwriting

Once the appraisal comes back and the value aligns with the final purchasing numbers, it’s time to submit the loan for final underwriting approval.

Within 24 hours, you will get word that it has been approved.

Sign closing disclosure

With an approved loan on hand, it’s time to sign the closing disclosure.

This document states when the home will “close” and when the funding will be transferred. It’s typically signed within three days prior to the actual closing date.

Quality control

Now that everything is nearly finalized, our team will do one last quality control overview to ensure you’re ready to close. You will also need to sign additional paperwork at the title company, which facilitates the closing process.

Set up closing date

The parties will set up a date and time to formally close on the transaction, at which time you officially become a homeowner.

Seller profits reach all-time high in 2021 real estate market

At the start of the pandemic, no one really knew what direction the real estate market would take. Before long, it was clear that it wasn’t slowing down.

As a result, homeowners who sold in 2021 earned a median profit of nearly $100,000, according to ATTOM data. That margin represents a nearly 46% gain from 2020.

The return on investment was the largest for home sellers since at least 2008. Profits rose in 90% of the 173 metro areas that were surveyed.

Profitable returns on investments aren’t new in the real estate world. The trajectory of profits has risen over the last decade for consecutive years. The difference since the pandemic has been the rate at which they have gone up. Between 2020 and 2021, profits shot up by more than 10%. As far as the median home price, it gained 17% in 2022, which is record-breaking good.

The big question before many home buyers and sellers is what’s in store for 2022. Will prices and profits continue on their current path? It’s unlikely. ATTOM flags some signs that could indicate price flattening in 2022.

If projections pan out, the market will see a slight decline to profits and to affordability as prices continue to rise. A repeat of 2021 is doubtful. The imbalance between demand and supply is likely to drive prices upward, but perhaps not as aggressively as the last two years or so.

Many real estate watchers will remember 2021 as one of the greatest years for home sellers, and one of the more difficult ones for those who tried to break through the barriers of homeownership.

The highest profits were realized along the West Coast; Boise led the way with a gain of 121.8%. Virtually every region tracked by ATTOM experienced some level of increase to the median price of at least 10%.

Home sellers who placed their properties on the market were relative newcomers to ownership. They had lived in their homes for an average of about six years before deciding to move on. The average amount of time spent in the home before selling dropped over the last couple of years as more homeowners saw an opportunity to make a substantial profit.

As a homeowner, you may also be weighing your options, wondering what your place is in today’s market. Whether buying a smaller home or upgrading into something that better suits the needs of your growing family, our real estate professionals can help you reach your goals.

As interest rates begin to head in the opposite direction, you might also consider a refinance mortgage loan that lets you reduce your monthly mortgage payments or secures you a lump sum of cash through your home’s growing equity.

Whatever your real estate vision is, we can help. Please contact us today to learn about how you can take advantage of today’s market dynamics and fulfill your next real estate dream.