Steps To Buying A Home

1. Obtain Pre-approval

It is important to gain pre-approval for a home loan before you even start looking at properties. The lender will carefully review your financial situation, including your credit, income, assets and other information. You will be provided with a pre-approval letter stating your borrowing power, or how much home you can afford.

The pre-approval process helps you set a definite and realistic price range for your home search and also proves to sellers that you will be able to follow through with the purchase. If there are several bids on a home the seller is most likely to choose the one that is not only the best price but also has a buyer with strong financial status attached to it. They would not want to select an offer that may fall through.
NOTE: You are not required to use the lender where you get the pre- approval letter and can still shop around for the best interest rates.

2. The Home Search

It should be a fun process searching for your new home. There are several websites online where you can view homes that are available. Also, create a list of features you are looking for in a home and give it to your buyer’s agent. This could include number of beds/baths, square footage, location, pool, etc.

Your agent will have access to the Multiple Listing Service (MLS) and will be able to send you homes that fall under your search criteria. They will also have knowledge of quiet listings that are not advertised on MLS or other websites. It is important to look at several homes to see what you can get for your set budget.

3. Submit An Offer

Work with your agent to come up with an offer that reflects the condition of the property and is a fair market price. Your agent will be able to research the comparable homes and help you come up with a smart offer. They may even suggest to put in an offer at full price if the home is priced well and competition is anticipated.

4. Negotiation & Acceptance

After you submit your offer the seller will have the option to accept, counter or invite to resubmit. This process can be stressful if there are a lot of counter offers back and forth, but trust that your agent will be there to help you every step of the way. Usually with time and patience an agreement on the purchase price and other terms will be made.

Once an offer is accepted you will pay earnest money that will be put into an escrow account.This is a good faith deposit towards the purchase of the home and shows that you intend to follow through with the transaction.

5. Secure A Loan

Now it is time to secure your loan. Go back to the lender who gave you your pre-approval or shop interest rates and go with the best lender that you find.

It will take several weeks for the lender to review your mortgage application and you will be asked for several documents pertaining to your income, debts, credit status and assets. During this process the property will be appraised to determine if they can issue the loan.

NOTE: There will be a set date in the contract for when you need to have your loan secured. If it takes longer just have your agent notify the seller so you can receive a time extension.

6. Property Inspection

When an offer has been accepted you will want to get a home inspection. It is a good idea to personally be at the inspection so you can see first hand what problems the home may have.

The inspector will look at the outside and inside of the home including the roof, siding, windows, plumbing, electrical, HVAC systems, etc. Based on the inspection you can decide to withdraw your offer or ask the seller to help pay for any surprise repairs that are needed. Your agent can give you advice on how to address the repairs.

7. Walk Though

Before you close on the property you will perform a final walk through. You will make sure the home is in the same condition as when you first viewed it, and that there hasn’t been any catastrophic damage and that all the owner’s personal property has been removed.

8. Closing

You or your agent will be in touch with the title company and they will let you know exactly what funds and documents to bring to the closing. A HUD sheet (the settlement sheet which includes a list of buyer and seller costs) will be issued to you so you can see exactly how much money you need to bring, usually as a certified or cashier’s check.

The closing will most likely take place at the title company’s office. Your attorney and/or agent should be there to answer any of your questions. The closing consists of signing and reviewing a lot of paperwork. Once funding takes place and the deed has been registered you are free to move in to your new place. Congratulations!

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