The information below is intended as a general overview of the typical home purchase from start to finish. Feel free to contact your agent atanytime with questions and concerns.
Knowing what you can afford to pay for your new home is the first step in narrowing down your home search. Your realtor and lender will help guide you through the pre-qualification processes. Contact multiple lenders to shop rates and loan terms. Keep in mind you will be submitting paper work to the lender for final loan approval. In most cases expect the lender to request:
Now that you’re pre-qualified, let the home search begin. Your realtor understands that every transaction is unique, so be sure to communicate your "wants" and "needs" clearly to your agent (location, price, bedrooms, baths, square footage, ect.) Remember as a buyer in most traditional real estate transactions you do not pay any realtor fees.
Your realtor has found you the home of your dreams, now it’s time to make an offer. Before making an offer, ask your realtor to get a copy of the Seller’s Disclosure Notice for the subject property. Certain sellers, such as banks, are exempt from providing Seller’s Disclosure Notices. Smart sellers and their agents will want a copy of your loan pre-approval letter submitted with the offer. It’s not uncommon for sellers to respond to offers the same day, but prepare yourself for a response time between 24-48 hours. If you’re dealing with a bank, added paper work may be involved, and in some cases the response time can take up to 7-10 days.
After negotiating, you and the seller(s) have agreed on a price for the home. Once all parties have agreed to the terms and the contract has been executed, your realtor will deliver the contract to the title company and your lender. At this time the buyer is responsible for depositing earnest money with the title company. The amount of earnest money is negotiated in the contract, but you can expect to deposit $500.00-$1,000.00, depending on the price of the home and contract terms. The amount of earnest money is not a fixed price, but is negotiated between buyers and sellers, and in some cases the amount will be higher then $1,000.00. If you decide to purchase the subject home, your earnest money deposit will be credited back to you at closing. If you decide to back out of the contract during your option period you will receive a full refund of your earnest money. The earnest money must be delivered by the buyer to the title company no later then 48 hours after the contract execution date.
A typical option period is 7-10 days and is negotiated in the contract. Option periods can run longer or shorter and additional monies may be required. In essence, the buyer is paying the seller $50.00-$100.00 for the unrestricted right to terminate the contract during the time specified (7-10 days). The buyer is responsible for getting the option money to the seller within 2 days after the effective date of the contract. The option period starts the day following the contract execution date. You will want to have your home inspection done during this time. Your option money can be credited back to you at closing should you decide to purchase the home. However, should you decide to back out of the contract during your option period you will forfeit your option money to the seller.
Once you receive notification that your offer has been accepted, begin contacting a few property inspectors to shop prices and availability. Remember, you want your inspection done during your 7-10 day option period. Make sure the inspector has the proper insurance, credentials and experience. Don’t be afraid to ask for references. On average, expect to pay around $200.00-$350.00, depending on the size of the home. If the home has a pool/spa add another $50.00. We recommend all our clients have a termite inspection done during the home inspection. This can run you an additional $50.00 and it’s money well spent.
Now that your inspection is done, there may be a few things that need to be addressed. Many first time home buyers are taken back once they review a copy of the inspection report. Don’t panic, it’s the inspector’s job to note any problems with the home whether they are major or minor. Focus on the roof, foundation, electrical, plumbing, HVAC, water heater and so on. If the contract needs to be amended, your realtor will guide you through the negotiation process.
Your lender will require one. The appraiser will provide his or her opinion of value for the subject property. Prepare yourself to pay around $350.00-$450.00 to have a licensed appraiser value your future home. In most cases this payment is paid outside of closing (P.O.D.). Prepare yourself ahead of time for this fee.
Should the seller have a copy of their existing survey for
the subject property, your agent will obtain a copy of it from the listing
agent. As long as the owner(s) has not made any changes that would effect the
use of the survey (i.e., added a pool, fence, driveway, ect) the survey should
be acceptable. Foreclosures, Estates Sales and Real Estate Owned properties rarely
have copies of the survey. If the seller can not provide a copy of the survey,
a new survey needs to be obtained. The cost of the survey is negotiated in the
contract, but in most cases the buyer pays for it. Typically, the cost for a
new survey is around $350.00-$400.00 and is paid at closing. Condominiums do
not require a survey.
If you’re getting third-party financing, your lender will require you to get home owners’ insurance before closing. Insurance premiums can vary from one company to another. Contact a few insurance companies for competitive price quotes and coverage terms. Be sure to understand your home owner’s policy and what it covers. Don’t be afraid to ask your insurance agent questions.
You’ll want to follow up with your lender a few times before closing to make sure he or she has all the needed documentation and paper work from you. The last thing you want is a delayed closing because your lender is requesting additional information from you. Remember in real estate, time is of the essence.
Give yourself time before closing to transfer necessary utilities to your future home. No one wants to move into a home without power or water. A week’s notice should do.
If you’re planning on hiring a moving company to handle your move, give yourself plenty of time in advance to schedule the movers. Make sure the selected moving company has the proper insurance, credentials and experience. Don’t be afraid to ask for references.
Congratulations you’ve made it. Before closing on your home,
the title company will send you and your realtor a finial HUD-1 statement for
your review. You should receive the HUD-1 1-2 days before your scheduled
closing. This statement will have a break down of all the fees associated with
the closing of your home. The statement will include any money you are required
to bring to the closing table. Most title companies require a certified
cashier’s check for any amount over $1,500.00. You will also be required to bring a copy of
your driver’s license to closing. Additional forms of identification may be
required.