This is a general overview of the home buying process, from offer to closing. The specifics of your transaction may vary; thus, I will be by your side every step of the way using my own mortgage industry background and experience to guide you. It typically only takes about a month (or less) to close on a house once you find the right home to buy!
STEP 0: GET PRE-APPROVED FOR A MORTGAGE
If you are not paying in cash, then you will want to get "pre-approved" for your mortgage loan before you start shopping. This will help you understand what you can afford before you put an offer in on a house. I can provide some names to you of very skilled loan originators that will take excellent care of you.
STEP 1: THE OFFER
Once you’ve found the perfect home, it’s time to make an offer. A buyer and seller must enter into a written contract called a “purchase agreement.” Typically the process begins with the buyer’s written offer to the seller. I will use a standard form to draft an offer and present it to the seller or the seller’s REALTOR®. I can negotiate many of the terms and conditions of the offer, including, but not limited to:
- Sales price
- Financing terms
- Earnest money amount
- Title policy and survey information
- Property condition
- Possession terms
- Contingencies
- Any special provisions
- Any exclusions
- Settlement and other expenses
- Prorations
- Casualty loss
- Default
- Effective date
- Date of closing
STEP 2: THE EXECUTED CONTRACT
Once both parties have agreed to the terms of the offer, and the seller has signed the offer and communicated acceptance, an offer becomes an executed contract. You’ll need to address the next steps quickly in order to close on time.
STEP 3: DELIVER THE EARNEST MONEY AND OPTION FEE
Earnest money is a cash deposit the buyer gives the seller via a third party intermediary, usually an escrow officer. This deposit proves you are serious about purchasing the property. Typically, the earnest money deposit is credited to the purchase price at closing. The Option Fee is paid directly to the seller and allows you a time window to back out of the contract for ANY reason including inspection issues or simply a change of heart. This must be done within THREE DAYS of the contract execution date.
STEP 4: OBTAIN A MORTGAGE LOAN
Notify your mortgage lender as soon as you have an
executed contract so they can start the mortgage process.
You’ll need to submit extensive paperwork and pay for
certain services related to your new home in order to
secure the loan, even if you’ve been pre-approved. I can help serve as an intermediary between you and your lender, if needed.
STEP 5: SCHEDULE PROPERTY INSPECTIONS
Property inspections help expose defects in the home that could influence your decision to purchase it at the price outlined in the executed contract. A standard home inspection is most common, but other types of inspections
(radon, pest, septic, structural, HVAC, mold and others) are available. If a defect is found, I may help you negotiate that the seller cover the cost of repairs or reduce the home’s sale price, or you may wish to cancel the contract.
STEP 6: OBTAIN EVIDENCE OF TITLE
Your contract will usually require the seller to deliver evidence of title. In addition, your mortgage lender will require a title company to review the title history of the seller’s home to ensure they will have a valid, enforceable lien on the property after closing. You can also purchase a homeowner’s title insurance policy that protects you from covered title defects arising prior to or concurrently with your purchase of the seller’s home.
STEP 7: ORDER AN APPRAISAL
An appraisal is also required by mortgage lenders to verify that the value of the property you intend to purchase is worth the sales price. Most lenders require the buyer to pay for an appraisal.
STEP 8: OBTAIN HOMEOWNER’S INSURANCE
Mortgage lenders also require buyers to purchase a homeowner’s insurance policy. The policy covers any accidental damage to the home and the owner’s possessions due to theft, storms, fires and some natural disasters.
STEP 9: CONSIDER PURCHASING A HOME WARRANTY
You may also want to purchase a home warranty, which is a service contract that provides for the repair or replacement of major systems and appliances in certain circumstances.
STEP 10: SET UP UTILITIES
Make arrangements to turn on your utilities and transfer all accounts to your name.
STEP 11: SCHEDULE A CLOSING TIME
We will check in with your escrow officer and mortgage lender about a week before the closing date to make sure everything is in order for closing. Schedule your closing time accordingly.
STEP 12: CONDUCT THE FINAL WALK-THROUGH
It’s recommended that home buyers perform a final walk-through of the property a few days before closing to verify that any repairs have been made and the seller’s possessions have been removed.
STEP 13: CLOSING
The closing typically occurs at the title company and takes
about an hour. A few days before closing, you should
check with your escrow officer to determine what items are
needed for closing. At a minimum, you should bring your
driver’s license and certified funds to closing. Once you’ve
signed all documentation and your lender has funded your
loan, you’ll get the keys to your new home!
