Do you plan to buy a home in New Jersey in 2017 or 2018? If so, we’re willing to bet you have a lot of questions about the steps that occur along the way. And we’ve got you covered. Here is a step-by-step overview of the home buying process in New Jersey, updated for fall 2017.

Steps in the New Jersey Home Buying Process

To help you understand the buying process, we’ve broken it down into seven common steps. The process can vary slightly from one person to the next, due to the many variables that are involved. But it usually goes something like this:

  1. Establish your budget and research the market.
  2. Research and choose a type of home loan.
  3. Get pre-approved by a lender.
  4. Find an experienced New Jersey real estate agent.
  5. Begin the house hunting process.
  6. Make an offer and, if necessary, negotiate with the seller.
  7. Close the deal and get the keys to your new house.

Step 1: Determine your budget and research the market.

Before you start house hunting, do some basic budgeting math to determine how much you can afford to spend each month on your housing costs. Keep it simple. Subtract your combined monthly expenses from your net income (or take-home pay), and then work down from that number. While you’re at it, research the local housing market where you plan to buy a home. Pay particular attention to recent sales prices. This will give you a better idea of what kind of home you could afford.

Step 2: Research your mortgage options and choose a type of loan.

Early on in the home buying process, you’ll want to research the different types of loans that are available to New Jersey home buyers. You have quite a few choices to make, and there are pros and cons with all of them. For example, the FHA loan program offers a low down payment of 3.5%, but requires mortgage insurance. That’s just one example of the pros and cons associated with different mortgage options. (Note: We can help you choose the best type of loan for your situation.)

Step 3: Get pre-approved for a mortgage loan.

You can think of mortgage pre-approval as a kind of financial pre-screening process. We can review your financial situation to determine if you’re a good candidate for a loan. We can also tell you how much you might be able to borrow. It makes sense to do this early on in the New Jersey home buying process, because it allows you to narrow your search to properties you can afford. Additionally, sellers will be more likely to accept your offer if you have a pre-approval.

Step 4: Find an experienced New Jersey real estate agent.

We encourage New Jersey home buyers to seek professional guidance from an experienced real estate agent. This is especially important if you are buying your first place. In New Jersey, it’s usually the seller who pays for the real estate agent commissions. So, as a home buyer, there is really no reason to fly solo. An experienced agent can help you find a property, evaluate the asking price, put an offer together, negotiate with the seller, and more.

Step 5: Begin the house hunting process.

Now it’s time to go out and start looking at some houses. But you’ll notice there were four steps that preceded this one. Some home buyers rush into the house hunting stage of the buying process, without doing any preliminary research or budget work. We recommend that you go through the steps above before you start shopping for home. Then, make a list of the things you want and need. And remember to be flexible — buying a home in New Jersey often requires compromise.

Step 6: Make an offer and negotiate with the seller.

This is one of the most important steps in the New Jersey home buying process, because it determines the amount you’ll pay for the house. Before you put an offer on paper, you’ll want to evaluate the asking price to make sure it is reasonable. You can do this by looking at recent and comparable sales within the same area. This is what real estate agents refer to as “comps.” It’s also one of their specialties, which is why we recommend using a real estate agent when buying a house or condo.

Step 7: Close the deal and get your keys!

From the buyer’s perspective, closing represents the final step in the New Jersey home buying process. This is where the buyer and seller sign all of the documents relating to the sale of the home. These can include mortgage-related documents, tax records, deeds, and more. This is also when the real estate agent commissions are paid. Last, but certainly not least, you will receive the keys to your new home. Congratulations, you’re now a New Jersey homeowner.