Buying a house can be both exciting and stressful, so knowing what to expect and where to begin can save you both time and stress. Here are some steps to help get you started.
Unless you are paying cash for a home, you will need to get pre-approved for a loan by contacting a mortgage company or credit union.
Contact a Buyer’s Agent
Once you have become pre-approved, contact a Buyer’s Agent who will assist you with your home search.
Make an Offer
Once you’ve found a home with your Buyer’s Agent, make an offer. Your Buyer’s Agent will guide you through determining market value, contract terms, what to expect, and negotiate the offer on your behalf. Once your offer is accepted and signed by all parties, you are then under contract.
Once under Contract
Your Buyer’s Agent will help guide you through the contract to the closing process, which includes outlining important contract timelines (such as an Option Period), any monies owed (such as Earnest Money and the Option Fee), scheduling inspections, providing utility contacts, assisting with a home warranty order (if applies) etc. You will typically be contacted by a Title Company, your Mortgage Company, and Buyer’s Agent weekly or bi-weekly with any requests/items needed. It is imperative that you do not make any major purchase, open any new credit accounts, buy a vehicle, etc., without discussing with your Mortgage Company and Realtor first. This can affect your ability to qualify for your loan.
An Option Period gives you, the Buyer, the unrestricted right to terminate the contract for any reason. It is typically the first 7-10 days of being under contract and is usually when home inspections will be completed. If there are any repair negotiations, they are usually done during this timeframe.
After the Option Period is over, the appraisal is typically ordered. An appraisal provides an estimate of how much a home is worth based on comparable sales in the area, market trends, and a visual assessment of the property by a Licensed Appraiser. Typically, a home will need to appraise for the contract price or more.
Obtaining homeowner’s insurance is an important step in the buying process. Homeowner’s insurance must be in place prior to closing on a financed purchase. Most Buyers shop insurance companies to find the best rate & coverage available.
Your Mortgage Company will work with you to clear any loan conditions and fully approve your loan for closing. From the time you go under contract to being ready to close, most loans take 30-45 days to fully process.
Clear to Close & Closing Disclosure Issued
In order to close, your Mortgage Company will need to get full loan approval, issue the clear to close, and issue the Closing Disclosure. The Closing Disclosure, commonly called the CD, is a breakdown of all credits & debits associated with the transaction. It shows the bottom line figure you will be bringing to closing and must be issued to you at least three (3) days prior to closing.
In preparation for closing, you will typically do a final walk through to make sure the home is in acceptable condition. For closing, you will need to have valid identification and certified funds. The closing will take place at the Title Company listed in your home’s contract. Your Buyer’s Agent will attend closing with you to make sure things go smoothly and answer any questions that you have. If you are unable to attend closing, you will be provided alternate closing options in advance.