Here is a basic run down of the home buying process. The real estate transaction is very complex, but that's where my knowledge and experience comes into effect. You don't have to know everything that is going to happen. I'll be there to coach you, and make sure everything is done properly.
1. Figure out what you want, based on what you can afford.
Surprisingly, what you want and what you can afford are usually different. I recommend you start by
getting an idea of what's on the market and how much it costs for so much home. The easiest way to do this is to search online. On my website, these listings are always up to date and usually have pictures and lots of information. It also gives you approximate mortgage payment information for each property.
It's also a good idea to anticipate future family needs (buying a home is a great investment, but there
are costs of both buying and selling, if you're going to need a bigger house in a year, you might be better off to get that house now.)
Buying is not always the best financial decision. If you aren't going to be in the same place for very long, you might be better off renting. This Buy or Rent calculator can help you determine if it is your best interest to buy or to rent.
2. Meet with a Lender and get pre-approved for a loan.
To get pre-approved you need to meet with a Mortgage lender. They examine credit, employment, debt, and income to determine what they can loan you, and at what rate. They will recommend loan products that best fit your needs, and can give you a letter saying you're "pre approved". Being pre-approved can strenghten your offer ability, as It shows sellers "this is a quality buyer." In some cases, sellers require that buyers are pre-approved in order to even make an offer.
You can also get pre-approved and free mortgage quotes in a non-commital way by doing it online:
3. Tour Homes until we find one that is a winner.
Being that you've already familiarized yourself with the present market, you probably have a few homes that you wouldn't mind checking out. Call, or e-mail me with the MLS#'s of the homes you'd like to see. I will likely recommend a couple I've seen, that I think might be what you're looking for. If the present owner of the home still lives there, we need to give them 24 hour notice before seeing it. If it's vacant, we can usually see it whenever. I like to show a maximum of about 7 or 8 homes on a single tour session. We can tour homes just about any time of day, I'm very flexible, but it's usually best to do it before dark so you can actually see the house.
Once you find a house that you think you want to make an offer on, we go back and see it again. This time we look at it from a more pesimistic perspective, and do our own sort of "home inspection" looking for all the negatives.
4. Make an Offer
Once a house is found that you want to make your home, we make an offer. To be legal, an offer on a home purchase must be in writing. You can either pay a lawyer to help you write up some docs, or I'll help you with the paperwork using forms that lawyers have already prepared for us. In the offer, we negotiate not only the price, but also possible concessions, possesion date, and contingencies that must be met to make it a binding deal.
When we make the offer, you also must make an earnest money deposit. The earnest money shows the seller you are serious about your offer. The earnest money is non refundable if you back out of your offer after acceptance for a non agreed upon reason.
I then submit your offer to the seller’s agent, and they present it to the home seller.
5. Wait for Offer to be Accepted, Rejected, or Counter-Offered
The offeree is usually given about 24 hours to respond to the offer. If it is accepted, you are closer to a new house. Otherwise, it will likely be counter offered and then the seller becomes the offerer and you get to decide if you want to accept the counter-offer. When accepted, we work to meet all contingencies.
6. Complete Necessary Inspections - Remove Contingencies
Unless you are paying Cash, you will need an appraisal. Usually your Lender will arrange the appraisal. The purpose of the appraisal is to verify that your home is really worth what you have offered. The lender doesn't want to back their loan with a home that's not worth what they are paying.
If your home is older, you will also want some home inspections. Such as structural, hazard, mold, or pest inspections. You probably don't want to buy a home if it's going to fall apart in a month. I will help you arrange these and make sure they are completed by their deadlines. As long as the deadlines are met, the seller may be required to fix certain problems found during the inspections. Nearly every home inspection I have ever had done has found more seller warrantied faults than the cost of the inspection.
7. Finalize The Loan
Getting your loan to go through is sometimes the most painful part of the real estate purchase process. Even when you are pre-approved, underwriters often throw you through loops and require you provide all kinds of ridiculous information at the last moment. Employment verification, bank statements, divorce decree's, payoff notices, business cards, whatever. A good idea is to prepare for this is to plan for it to take a lot longer than it should, and press your lender to get things done long before settlement is to take place.
8. Obtain Affordable Home Owners Insurance
Part of finalizing the loan, and one of the acceptable conditions for canceling the Real Estate Purchase contract; is the cost and availability of Home Owners Insurance. Getting set up with affordable Home Owners Insurance is one step you'll need to do as part of the purchase process.
At settlement you, me, sometimes the lender, and a title officer meet at a Title Company (A neutral third party that gatheres all the documents and funds). We go over all the paperwork, loan forms, and make sure the dollar figures, prorations, and arrangements are correct. The title companies also provide us with drinks and delicious treats. The title company then proceeds to collect and distribute funds.
The title companies also issue a policy of "Title Insurance" which guarantees the real property is rightfully yours, and that no one else has claim to it.
After you have signed your settlement papers, and all stipulations have been met, the title company records you as the new owner of the property
at the county office. This usually takes place the day following settlement, but depending on your lender, and the time you settle it could take longer. Once the transaction is recorded at the County Office, the property is officially, and legally yours. You are now free to move into your new home.
11. Move in, Have Fun, and Make Friends
Congratulations! You have purchased a new house. Now your job is to make it a home. You will also notice things you like and dislike about your new place. Keep these in mind, because before you know it you will likely be buying a new house again. Also, before you move in, don't forget to have the utilities transfered to your name andturned on, including gas. Special note, Questar isn't open on Saturday, so by the time you call them Monday, it will be Tuesday before they come out meaning you are without hot water for 4 days. Just a little tip I learned from first hand experience.
Cornerstone Real Estate