Then find a home that you’d like to buy
Once you’ve been preapproved, you’re ready to begin shopping for a home. As you shop, remember that you’ve been preapproved for a mortgage of a certain size. That doesn’t mean you absolutely must find a home below that price, but choosing a significantly more expensive home will require you to start all over with your lender.
After you find a home, you’ll:
- Make an initial offer to the seller: Your offer should be 10–15% below the total of the loan amount for which you’ve been preapproved plus the down payment that you expect to pay. That way you’ll still have wiggle room if the seller demands a higher price.
- Negotiate a final deal with the seller: Once the seller receives your initial offer, he or she will likely make a somewhat higher counteroffer. You’ll then negotiate other terms of the deal, such as whether the seller will pay for repairs or upgrades to the property.
- Sign a purchase agreement: A purchase agreement is a contract that formalizes the terms of the deal to which you and the seller have agreed. Usually the buyer’s real estate agent drafts the agreement.
Once you have a purchase agreement signed, the real estate agents and lenders will set a closing date. On the closing date, the sale of the property will close or finalize, and your lender will transfer funds to your seller and the keys to you!