The process can seem overwhelming and confusing at times. Here’s what you can expect to help you plan.
My job as your buyer’s agent is to help you navigate the maze of procedures and documents and feel comfortable with the terms as well as the process and answer any questions you have. I’m here to help and make it a pleasant and enjoyable experience.
Steps to Buying a Home:
- GET PRE-APPROVED FOR A LOAN
This is a critical step in the process as it helps you know how much home you can afford and also puts you in the driver’s seat when finding a home you’re interested in buying. All contracts have to be submitted with a pre-approval letter from a lender.
I can recommend some great local lenders, but don’t be afraid to shop around and ask questions so you’re comfortable with the process.
- DETERMINE YOUR WANTS & NEEDS
Figure out those features (#bedrooms, bath, garage, fenced back yard, etc), style of house (single family, townhome, condo as well as colonial, split entry, or modern), location (where within the city area or specific neighborhoods) and amenities in the and around the surrounding neighborhood (shopping, parks, metro, etc) that are critical to you.
Remember…It’s just as good to know what you don’t like as those that you do.
- FINDING YOUR HOME
You’ve probably already been doing some of your own surfing the Internet for homes. I can register you with “LISTINGBOOK” and online data search tied to the MLS so you can create you own customized home search. Through it you can keep a log of your favorites, track sales information, and send me notes on interested properties.
- TOURING HOMES
This is the exciting part! Once you have your search criteria established we’ll come up with a list of homes to visit. Showing times will be determined as we go along as some can be the same day while others may need more advance notice.
Tip: Wear comfortable and (if possible) slip-on shoes whenever going to look at homes. It makes it easier if the seller requests shows be removed before touring their home.
- CHOOSING A HOME & MAKING AN OFFER
Once you find a home that meets your criteria and you want to make an offer, we’ll first sit down and review the comparables (also known as “comps”–recently sold, under contract and currently active) in the area. This will help guide you in determining what kind of offer (price) as well as the terms and conditions of the contract. We’ll discuss all of this information to make sure you can make the best informed decision.
Information needed for making an offer:
a. Offer (sales) price
b. Escrow Deposit Check – typically 1% of the sales price – can be a personal check
c. Type of Financing (FHA, Conventional, VA, etc)
d. Down Payment (3.5%, 20%, 0%, etc)
e. Date of Purchase – also known as settlement of closing date – the day you want to own the home.
f. Contingencies (Inspections, Appraisal, Financing, Sale of Home, etc)
g. Signatures – of all buyers or a Power of Attorney for anyone not available to sign
h. A copy of a pre-approval letter from a lender
- RATIFIED CONTRACT
This is what the contract is called after all buyers and sellers have agreed to and signed off on all the terms and conditions of the contract. This is an important date to make note of as it sets the clock for securing full financing from your lender, completing inspections, etc. Details such as these I will monitor and keep you fully informed of all the deadlines we need to meet.
- MORTGAGE APPLICATION
Within a couple of days of a ratified contract it is imperative you make a final decision on the lender you want to work. If you choose to shop around with lenders, just do the shopping all in one day to be assured you comparing “apples to apples” in terms of costs, etc. It typically takes about 20-30 days for full financing approval, but during that time the lender can be asking for lots of financial documentation from you. It’s imperative you provide the information in as timely manner as possible to make sure we meet the financing deadline.
Check out how not to commit “Mortgage Sabotage!”
- HOME INSPECTION
Typically scheduled within 7-10 days after ratification. I will help coordinate this detail along with any other inspections involved with the contract (radon, termite, etc). Feel free to check out my recommended Home Inspectors, Termite inspectors, etc under the “Resources” tab. Click on “Preferred Businesses”
I strongly recommend buyers attend the home inspection as it’s a great opportunity to learn and understand how your home works and how to best take care of it. If scheduling doesn’t permit this, I will attend (as I do if you’re there as well) and provide you with the summary information of the inspection.
This is a Buyer paid expense and paid outside of closing (average cost $400-$550), depending upon size and age of the home.
Radon test (typically runs $150-200)
Once completed, we will discuss the information to determine what if any repairs you would like to have the seller pay for and submit to them. These repairs are negotiable and not all sellers agree to all or any repairs. More details on how this process works will be discussed during the contract writing stage.
- SHOP FOR HOMEOWNER’S INSURANCE
Also known as Hazard Insurance. This is similar to renter’s insurance but the difference is the Mortgage lender wants to make sure the home is always covered. So once secured, the fee will actually paid by the lender. The money will come from part of your mortgage payment called escrows. This needs to be secured within 7 days of contract ratification.
- REVIEW HOA DOCUMENTS
If there are Homeowner’s or Condo association documents, once you receive them, you will have 72 hours to review them. Take time to read these carefully and determine if there’s any reason you don’t want to move forward with the contract based on the disclosures in these documents.
- ARRANGE FOR UTILITIES
Set up to have the Utilities turned on in your name 1 day or longer after closing. Find the Utility information for your new home here.
- FINAL DETAILS
Walk Thru
Several days before closing we’ll do one final walk-thru of the home to verify any home inspection items agreed to be taken care of have been fully completed, as well that the home is in the same condition (or better!) than when the contract was written. Any items which need to be addressed by the seller will be written up at that time.
HUD-1
When the closing statement document (HUD-1) is available we will review it (the lender might also review this with you) to make sure you the numbers look in line with those you received on the Good Faith Estimate (GFE)
Funds for Closing
This is the money you will need to close on the purchase of the home. It’s the figure discussed with the lender and is required to be brought to closing either in a certified funds check or by a wire transfer. Please be sure to allow several days for the wire transfer to be coordinated if choosing this option.
- SETTLEMENT (also known as CLOSING)
These terms are used interchangeably but in essence it’s the day you become a HOMEOWNER.
Things you’ll need to bring:
Driver’s License or other Photo ID
Funds for closing (see above)
