Home Buying Steps
Before you start looking at homes, obtain pre-qualification, including verification of your credit history, through a mortgage lender. We can assist you in identifying local lenders offering various mortgage programs to optimize your purchasing power.
Pre-qualification is an important step in the home buying process. It gives you an accurate starting point by letting you know what price home you can purchase. You’ll know up front how much cash you’ll need for the down payment and closing expenses associated with the type loan you’ll secure. You will also know what your monthly mortgage payment will be. Pre-qualification gives you peace of mind because you’ll know that financing will not be an obstacle when you find the right house.
Having already obtained a pre-qualification letter from a mortgage lender will give you a competitive edge when it’s time to negotiate a contract. It will allow you to shop for your new home with confidence!
The most important consideration in the buying process is your wants, needs, goals and expectations. Clearly defining these concerns will make your search simpler, swifter, and more successful. Be specific, but separate needs and wants so you can prioritize.
Minimum requirements for a home would include the number of bedrooms needed to accommodate family members or space for specific household furnishings/possessions you are unwilling to part with or replace. Separating needs and wants will give you the flexibility to adapt your search to market availability of homes that meet your personal and financial expectations.
Whether it’s your first home, a vacation property or the home in which you’ll retire, buying a house is a major investment. We want you to find the home that best suites you. We will give you advice and tips on how to keep the details of the homes you see, fresh in your mind so you are better able to make an informed purchasing decision. In your search, you will learn which neighborhoods you can afford and what they look like, what schools serve those neighborhoods, and other important information such as community lifestyles and convenience to work and recreation. Once you see what is on the market, your priorities may change. That’s okay. Just be sure to let us know.
When you view a home, share your impressions with us, both positive and negative. We need this feedback to assist you in finding the right home for you and your family. Once you find the right home, be prepared to act quickly to avoid losing it. If it meets all your wants and needs and feels right for you, even if it’s the first home you see…go for it!
Be sure you have included everything you want in the offer, but be as serious about your offer as you are about wanting the home. Along with the offer, you will make an “earnest money deposit.” Therefore, be sure you have your checkbook. We will explain what happens with the earnest money when it is deposited, how it is applied and how the amount of your deposit affects the probability of your offer being accepted.
When you have signed the offer and any required addenda and disclosures, your offer will be submitted to the seller for consideration. Only when you and the seller have reached an agreement on price and terms; the seller has signed the document; and we have been notified of this acceptance, does it become a binding contract.
At this stage, if you followed Step 2, Assess Needs and Wants, you’ll have already decided what type of mortgage you want and selected a lender. The next step is to meet with your lender to complete the loan application.
The lender will require more detailed information from you than was required for the initial pre-qualification process. You’ll have to provide documentation for the loan package and you may sign authorizations for the lender to obtain other information.
The lender may collect your credit report and appraisal fees at this loan appointment. While you pay them at loan application, these fees are part of (not in addition to) your closing expenses. When final loan commitment is granted to you, the lender will send closing instructions to your attorney.
You have the option to have the home inspected (at your own expense) to evaluate its condition. The inspection should be scheduled as soon as possible. If the inspector identifies problems you want corrected before closing, you’ll need to submit a Due Diligence and Agreement by the date specified in the contract. Also, adequate time is needed to complete any agreed upon repairs before closing.
Closing is the transfer of ownership of real property from the seller to the buyer. Signing of the documentation necessary to accomplish this is done in an attorney’s office with both buyer and seller and their respective real estate agents present.
The lender will require that you obtain a homeowner’s (or hazard) insurance policy on your new home to protect their (and your) interest in the property. If the property requires flood insurance, this policy will have to be obtained as well. Flood policies require additional documentation which may take extra time to secure. The policy premium(s) is generally paid at settlement as part of your closing expenses, but the attorney will need a binder from your insurance company. It is best that you arrange for insurance prior to closing, while you are awaiting final loan approval.
Be advised there are a number of last minute details to attend to between loan approval and closing.
The final step in the home buying process is the settlement meeting and closing. This meeting will be approximately an hour long. The attorney will explain the significance of each document before asking you to sign the original. You will be provided a copy of everything you sign. The attorney represents you and the mortgage lender, so don’t hesitate to ask any questions you may have. At this meeting, the attorney will have the seller sign the deed to transfer the property to your name and will collect from you the certified funds for your closing expenses. Both will be held “in trust.”
Before you become the legal owner of record, the attorney will go to the county courthouse to conduct one last check. This is to ensure no liens have been recorded against the property since last researching the title history. The deed will be recorded. The attorney will call his office to report, “we are on record.”
The home buying process is now complete. You now own the property and will receive the keys to your new home!