9 Steps to Buying a Home
If you plan to take out a loan to purchase a home, it is best to know exactly how much you can afford and how much a mortgage lender will loan before looking for a home. It is okay to simply be Pre-Qualified which tells you how much your loan will likey be, but it is best to be Pre-Approved which tells you and the seller that a mortgage lender will give you a loan.
My Buyer Resource page has a list of several recommended lenders.
I will set you up on a search for homes that meet your criteria, lists of homes will be delivered to your inbox and we will visit the homes you like. The search comes from a multiple listing service of homes for sale that realtors share with each other.
We will make an offer on the home you like. There is usually a negotiation process, which I will handle on your behalf. Once all parties agree to the terms, and sellers and buyers sign the purchase agreement, you will be in contract.
Within the contract, an option period is usually included to give you time to have the home inspected and to renegotiate or withdraw as needed. The option fee is typically between $100 and $300, and is paid directly to the seller. Typically, the contract will be written so that the option fee is paid towards the purchase price upon execution, or remains with the seller, should the buyer back out of the contract for any reason.
The earnest money is usually 1% of the loan, but can be higher, if needed. These funds go to the title company to be held until the contract is finalized. In the event that the buyer terminates the contract as allowed within the contract, the earnest money will be returned to the buyer.
You will want to have your home inspected as soon as possible to determine if any costly repairs are needed. At this time, additional negotiations may be needed.
The Home Warranty is purchased to cover the cost of repairs on any mechanical items in the home such as the refrigerator, stove or plumbing, during the first year after you purchase the home.
The Home Insurance will cover damage to the home due to events such as natural disasters or robbery.
Recommended Home Warranty and Home Insurance companies can be found on my Buyer’s Resources page.
The lender will have the home appraised. The appraiser will provide an assessment of the fair market value of the home so that the lender can determine whether or not they will approve the loan based on the price offered on the home.
The title company evaluates the documents received and requests any needed or missing information. They will also determine if the current seller is the rightful owner of the home.
At closing, you will sign all of the paperwork with the title company, including loan documents for the mortgage company. Typically, the seller and buyer will sign at different times. If the paperwork is signed early in the morning, funding is often provided by that afternoon. Once the seller receives their check, keys can be picked up at the title company.