THE HOME BUYING PROCESS… IN LAYMAN’S TERMS
Every home buying process is a little bit different, but this guide can serve as a general outline of the process we will walk you through to buy a home.
Getting pre-approved is the first step in the home buying process. You can get pre-approved by speaking with a bank or a mortgage broker. They will be able to go over all of your mortgage options including type of financing, interest rate, down payment & closing costs. Don’t be afraid to interview a few different professionals when choosing your mortgage lender. Your lender should not only be able to give you a price range, but they should break down your monthly payment amount for different price points. Keep in mind you don’t have to spend the maximum amount you are pre-approved for. You want to take in consideration not only your monthly principal & interest payment, but also your taxes, insurance and other general costs like utilities. By getting pre-approved, it not only gives you peace of mind but also proves to home sellers that you are a serious, qualified buyer.
One of the first decisions you will make as a home buyer is choosing a buyer’s agent to work with. This is an important decision, as all buyer’s agents are not created equal. A buyer’s agent is responsible for helping you understand the entire process of buying a home. They find homes that meet your criteria, set up showings, and assist with paperwork. They also recommend other trusted professionals such as home inspectors, lenders and closing companies. Let’s be clear on one thing though. Your agent shouldn’t want to sell you a home, they should want to help you buy the right home.
Once you’re pre-approved and you have selected your buyer’s agent, you are ready to start setting up showings for you to view homes. Your agent should be utilizing all of today’s technology to make sure you are not missing out on any potential homes. You should have a personalized home search created that feeds directly from the MLS. From this search, you will receive automatic emails immediately as new homes that meet your criteria hit the market. You should also have a search ‘portal’ which is a database for all homes available that are possibilities for you. While viewing homes, it’s important that you work together with your agent to pinpoint the pros and cons of each potential home, ultimately helping you decide on the right place. No hasty decisions allowed.
After finding a home that works for you and doing your due diligence, it’s time to make an offer! Your agent will assist you with all paperwork, making sure you understand each term of the contract. When we draft your offer, we will submit it to the seller. Once our offer is submitted, three things can happen. #1, the seller can accept our offer. #2, the seller can reject our offer. #3, the seller can give us a counteroffer and we can negotiate until we reach an agreement. Negotiations are an important part of any real estate transaction, and the competency of your agent really comes into play.
In most cases, we can reach an agreement between the buyer & seller, meaning we have a deal! Once you have an accepted offer, your agent can help guide you through the steps that will lead you to closing. It’s important to abide by all of the time frames in the contract and stay on schedule, so again, having a smart agent on your side will work wonders & save you tons of headaches. (Ahem.. revisit the ‘Who We Are!’ section and call us!).
Next up, it’s time for home inspections. Ideally, you will have requested an inspection time frame of 10-15 days in your contract, so you have some time. By now you should have selected an awesome home inspector and termite inspector. You might also consider a radon inspection, or septic inspection if your home is not on sewers. You are free to conduct any inspections you see fit during your inspection period.
After you conduct your inspections, you have the ability request repairs from the seller. This can be done in several ways. You can request that the seller complete repairs on your behalf, or that they give you a credit at closing towards repairs. Make sure you’re clear up front on what qualifies as a realistic repair request.
Typically after your inspection period, your lender will order an appraisal on the property. An appraisal is simply an opinion of value that tells the lender the home is worth at or above the amount of your loan. The appraisal is paid by you, the buyer, and is typically a pre-paid cost with your lender, meaning you pay for this prior to closing. Assuming the appraisal comes back good, you will be closing before you know it!
Prior to closing, you will want to conduct a final walk through of the property. During this time you can ensure that the home is in the proper condition. Make sure all items that were to remain are still in place, and double check that all necessary repairs have been completed. You will get to review a closing disclosure and closing statement prior to closing. This statement will show all credits and debits to you, and ultimately the amount you will need to bring to closing. Be sure to bring your ID, your checkbook, and a cashier’s check reflecting the amount due on the settlement statement.