The bank is the first stop in your home buying process because knowing your price point will give you focus. A mortgage lender will use information you provide to find what you can afford, and more importantly what you are comfortable with spending. If you not quite ready to buy now, just getting your ducks in a row for the future, your lender will help you examine your debt to income ratios and help you make financial decisions to help you be ready to pull the trigger when that day comes.
For the majority of home buyers, the first place they will look at homes for sale is the internet. While the internet is a value tool to help you get up to speed on your local market, nothing can beat first hand knowledge of your buyer’s agent. For example, photos can do a lot (or a little) for a property! Trust your realtor, they can make suggestions of homes that are not actively listed, suggest homes that you might have dismissed online, or help you with for sale by owner homes.
When you find the right property, you’ll want to be ready to write an offer. You’ll need to have a letter of preapproval from your lender and a check for earnest money. You and your realtor will decide what you’d like to offer for a purchase price, what contingencies you’ll want to protect your earnest money, and any seller concessions you’d like to include in your offer.
In every transaction there are three prices – the price you’d like to pay, the price the seller would like to get for their property, and a price that works for both of you. In real estate, everything is negotiable. Aside from the price tag, you can negotiate on closing date, how fees are divided, who will complete repairs, etc. Through this stage of the process, remember to be available to your agent and conscientious to meet contract deadlines.
Once you are under contract, you will have a pre-negotiated number of days to get your home inspection completed, review the report, and possibly negotiate any unexpected findings. Plan ahead – have a home inspector in mind and time set aside to attend the inspection. Also, some inspectors give a discount for on-the-spot payment. Possibly as much as 20% off! The fee for a home inspection is non-refundable.
Your realtor or lender will order preliminary title work to insure the property you are buying and all parties involved are free of any liens or judgments that may cause headaches down the road.
Your lender will order an appraisal from a list of approved appraisers in the area. They will visit the home, comparing it to similar homes that have sold nearby recently to determine a value to provide the bank. You will be charged by your bank for your appraisal.The fee will be paid at the closing table. The appraisal fee is non-refundable.
After the sellers have completely moved out and ideally within 24 hours of closing, you and your realtor will do a final walk-through of the property. This is to insure the property is in the condition it was on the day you wrote your offer. Be sure you have the transfer of utilities into your name and your home owners insurance scheduled to begin the day of closing
Congratulations! The final step of the process is closing. You, your realtor, and your lender will all meet at the title company to sign your mortgage and other documents.The seller may also be at the title company with their agent to sign the deed that officially makes your new home yours! You’ll need to bring your funds in the form of a cashier’s check and a valid form of government issued photo ID.