How to: Buying A Home
While every situation is different, the basic process of buying a home follows specific steps
1 Get preapproved
If you have a mortgage company or broker, give them a call. (If you need someone, we have a few names we can give you.) They’ll run your credit, ask some financial questions, and get you preapproved for your mortgage. At the end of their process, you’ll have a good idea of how much you’ll be able to borrow and how much you’ll need to put down. They’ll provide you with a letter that we can send on to sellers so they know your offer is a safe bet. The approval process is non-binding; you will fill out the actual mortgage application later.
2 Find your house
FSingle family? Condo? Four bedrooms or just two? A pool? Fenced yard? Location? Price?
Think about your wishlist and how important each item is to you. We’ll talk through the list and then, your realtor will find houses to visit. Right now the market is hot, so we’ll have to be quick! (This is why getting preapproved is so important.)
When you find the right one, we’ll make an offer.
3 Make an offer
We’ll find a price to best suit your situation. Sometimes we’ll be able to go low and other times we’ll need to go at or above asking. Every market and home is different.
Once you sign your offer, we go through the hardest part of the homebuying process. We wait. The seller may accept, reject or counter your offer.
Once we hear back that your offer has been accepted, you will put down a deposit to begin the escrow process.
4 Escrow
Escrow is the longest part of the process. The deposit you made will sit in a neutral account until closing. During this time, you will go back to your mortgage broker and apply for a mortgage for the specific property you would like to purchase. They will want lots of documents, including pay stubs, bank statements and other financial docs.
The title for the property will be ordered. The title company will work to make sure the current title on the home is clear and able to be transferred to you at closing. They will gather legal documents needed at closing.
Inspection
Most offers are contingent on a home inspection. This is so you and the lender know exactly what you’re getting. The inspection will be a visual inspection of the home; they won’t open walls, but they will note any outward indications of inward problems. All major mechanical systems and structural issues will be inspected. You and I will be present for the inspection. If any major issues come up, we will go back to the seller and either ask for the issues to be fixed or a credit to have them fixed. This will be a negotiation with the seller; they are free to say no but usually will work with you so the home sale can close.
Appraisal
Your house needs to appraise for the amount we offered or higher in order for the mortgage lender to feel comfortable supporting your purchase. They need to make sure their investment holds at least the same value as the money they are putting into it. The lender will typically order an appraisal by a third party to be charged to you (paid either immediately or at closing). The appraiser will walk the property and compare it to other homes in the area that have sold recently.
Credit
The biggest mistake you can make during escrow is to make any major changes to your credit, including buying or selling a car, defaulting on any loans, etc. This could significantly delay your closing.
5 Closing
Once all the paperwork has been completed, you will receive a closing notice letting you know exactly how much you’ll need to pay at closing. This may include charges for the inspection and appraisal, loan points or fees, county recording fees for the deed and title, etc. You will also pay your first tax payment at closing. This document will show you exactly how much you need to “bring to the table” to close the sale. The sellers and I will also be at closing. Everyone will sign documents and pay their portion.
Most of the time, you will get posession of the home at closing, unless we have negotiated otherwise. AND NOW YOU’RE AN OFFICIAL HOMEOWNER
6 Owning a Home
Your first steps should be to officially change your mailing address with vendors and have your mail forwarded to your new address. Get all utilities transfered to your name and call your cable/internet provider. You will not owe a payment for the first month -- you already paid it at closing!
Be sure to get your license changed to your new address and file your exemptions by Dec. 31.
As you’re unpacking and dreaming of all the things that will happen in your new space, if you need any contractors, let us know and we can recommend some to you.
