Steps to buying a home

Steps to buying your first home:

Have a lender pre-qualify you

In preparing to be a good borrower, be diligent in paying your bills on time. Do not close credit accounts, but do pay them down as much as possible. The more credit you have that you are NOT using, the stronger your credit score will be. Do not get a car loan before applying for a mortgage. Do not open new accounts, as inquiries DO lower your credit score! Start working with a lender prior to finding the home of your dreams (unless you are paying cash). A lender can confirm the amount you should finance and can also provide a pre-qualifying letter. The letter will show the amount you are qualified to borrow. This is important to have prior to making an offer on a home to purchase. A pre-qual letter proves to a seller that you are serious in purchasing a home

Find a real estate professional you can trust

If you do not know where you want to live, your agent can set up a broad search.

Drive around potential neighborhoods to see if you feel at home.

Ask your agent to tell you about the neighborhoods you are considering.

Are schools important to you? You can search on line about the schools in your possible neighborhoods. You can also ask your agent for specific websites that will show you the top schools in your preferred community.

If you know your specific area, your agent will set up a narrow search.

When you find potential homes from the search, your agent can preview for you, OR she can set up appointments for you to visit together.

Weigh the pros and cons of your home search. You may find the perfect home. However, you may need to compromise one “must have” for another. The main thing is to visualize yourself in your new location. Does it feel right?

Prepare an offer. (I can send you a blank contract to read). This will include:

Your offer (you usually give them 24/48 hours to respond)
The due diligence period (usually 10-14 days). During this time you will have the home inspected by a professional (approx. $400-$500) and also have the option to have the property surveyed. If there are excessive items to repair, your agent will prepare an “amendment to address concerns”. This is where you ask the seller to make repairs or provide concessions. The seller may or may not agree to some or all of the requests.
Your chosen closing attorney (can be TBD and provided at a later date) and your proposed closing date (30-45 days)
The appraisal period is usually 23 days. This gives your lender time to have the property appraised if you are getting a loan. You will also ask for a financing contingency if you are getting a mortgage. This is also approximately 23 days.
Earnest money. Usually 5% is a good figure as your earnest money shows strength to the seller of your ability to purchase their home and your seriousness in doing so. The selling broker (your agent) will hold the check in an escrow account until closing. At closing it will be applied to your down payment.
If your offer is countered, you either accept or counter again.

When you go under contract:

You will schedule the home inspection as soon as possible. If there are any other contractors involved or other inspections such as radon, termite, or survey, do it during this window of time. At the end of the due diligence period, your earnest money will become non-refundable unless you are denied approval of the loan or the home does not appraise. If you decide not to move forward with the purchase prior to the end of the due diligence, you can terminate the contract without providing a reason. Your earnest money will be refunded. After the due diligence period ends, you may forfeit your earnest money if you terminate the contract, unless you are denied funding or the appraisal is lower than your contract price.
If you continue to move forward with your purchase, contact your lender and continue to provide financial information as requested. The more organized you have been with your finances, the easier this process will be.
Confirm the closing date with all parities including your closing attorney

A few days before closing:

Your agent will schedule the walk thru This confirms all repair items are completed and the home is in the same condition when you first went under contract
Don’t forget to put utilities in your name as of the day of closing
You will be given a copy of the closing documents to review
You will be given instructions on wiring any funds

Closing day:

Sign lots of documents
Bring a check in case you owe a small amount of money plus your drivers license
Get the keys and head to your new home!