How To Buy a House, in 10 simple steps!
So You Found the “One” Now What?
The 10 steps of the home purchase transaction
1. Place your offer: What does that involve?
a. Paperwork: you will be signing about 15-20 pages of paperwork, don’t worry this is usually digital these days and takes only minutes. You will be signing an agreement to purchase and multiple disclosures your realtor will explain to you.
b. An Earnest Money check, a check written to escrow generally equaling 1% of your offer price. This is a show of good willingness. Things to note: This check will be deposited with escrow before close of escrow and transfer of title. Not to worry this money is put toward your total down payment.
c. A promissory note is an alternative to an earnest money check but must be follow up shortly by a earnest money check. In this busy market I suggest forgoing a promissory note and straight to a earnest money check to show good faith.
d. A pre-approval letter from your mortgage broker or bank. If you are paying cash it is best to show proof of funds.
2. Negotiations: the average transaction will have one to two counter offers. It is officially in writing but a lot of the negotiation is done verbally between brokers.
3. Offer accepted: You are officially now in Escrow. You will be assigned to work with an escrow company. They handle all transfers of money and title. Escrow is where you will sign your final sales paperwork drawn up for you by your mortgage professional.
4. Inspection Period: This is a period typically 10 business days which evens out to about 2 full weeks. This period can be shortened or extended. During this period you have the ability to do inspections on the home. Inspections completed usually include: a general home inspection, sewer scope, radon test and if the home is older a tank sweep for any under ground oil tanks. After the general inspection you will have further knowledge of what other inspections you may need such as roof, siding, foundation, or mold.
5. Repair Negotiations: Negotiations need to take place during the inspection period. I usually stress to have inspections down ASAP so a buyer may perform extra inspections if needed and collect bids for repairs needed.
6.Appraisal: Shortly after negotiations are hammered out your lender will want to order your appraisal in order to stick to the typical 30-40 day time line.
7. Loan approval: Your mortgage professional will work with you to gather all information necessary to get you final approval on your loan.
8. Final walk through: I always advise a final walk through of the home before you sign your life away…The final walk through can also be a time to make sure all agreed upon repairs have been completed. Some buyers opt to have a professional inspector come back out during this time.
9. Signing: Once all documents have been drafted and numbers have been checked you will set up a time with escrow to go in and sign your loan documents. Along with signing you will need to wire or bring a cashiers check in for the final sum needed to close escrow. This typically includes your down payment, dues to escrow and your lender, and pre-payment of taxes and insurance.
10: Transfer of funds and title: Typically one business day after signing your funds will transfer to escrow and your will be the proud new owner of your new home!!