Overview of the Buying Process
Choosing a Realtor®
Buying a home is an exciting time in one’s life, and choosing the right Realtor® is the first step towards a successful buying experience. Your Realtor® will not only help you find houses that meet all of your criteria, but will guide you through the buying process, help you interface with the various parties involved, and be your expert negotiator. With United Real Estate, you will also get the benefit of lifetime service. Call us any time with your real estate questions, and even years after your closing we will still be here to help.
Developing a Plan
The fastest way to get discouraged about your home search is to jump right in without a plan. Start by checking your credit so that you can straighten out any errors or problems before it is too late. Everyone is entitled to one free credit report each year at www.annualcreditreport.com. Next, use our FREE Budget Calculator to determine a comfortable monthly budget for your new purchase, and find out how much you can spend on a home. Finally, take advantage of your Realtor®’s expertise. Schedule a meeting to discuss your wants and needs. Ask your Realtor® about the various neighborhoods you are considering, and share the must have features of your new home.
Most real estate professionals agree that it is a good idea to get pre-qualified for a loan at the beginning of your home search. Pre-qualification will help you to understand the types and amounts of loans that you will be able to get. Many sellers also request proof of funds or a pre-qualification letter with any offers, so getting it done early prevents unnecessary delays down the road.
Finding the Right Home
With your plan in place, its time to start the search. Based on the criteria that you have selected, your Realtor® will help you find and evaluate the homes that best fit your needs. Your Realtor® will make sure that you see all of the properties that meet your criteria, but if you happen to find one that we miss, let us know so that we can schedule a showing. Open and direct communication will enable your Realtor® to better narrow down future searches. And don’t be shy about requesting showings; Your Realtor® will show you as many houses as you would like to see.
Making an Offer
Once you have found the home that you wish to purchase, your Realtor® will thoroughly research the property and advise you of any local customs and regulations to help you structure an effective offer. With your Realtor®’s advice in mind, it is ultimately your decision as to what price and terms you want to offer. Whatever you decide, your Realtor® will draft a purchase offer for you, and whether the seller accepts, rejects, or counters your offer, your Realtor® will guide you through the negotiation process and ensure that you get the best deal possible.
Going Into Contract
When the offer is accepted by both you and the seller, the seller’s attorney will draft the contract. Once the contract is signed by all parties, your down payment will be placed in escrow (usually with the seller’s attorney), and you can begin satisfying the contract contingencies. Though each case is different, typical contingencies include:
* Approval of the Seller’s Property Disclosure Statement.
* Loan approval, including an appraisal of the property.
* Physical inspections of the property.
The Loan Process
If you don’t already have a lender or broker in mind, your Realtor® is an excellent resource. Once you have selected a lender broker, you will need to submit a loan application.
Every application process is different, but this list will provide you with the documents that all banks typically look for. After applying for your loan, the lender will send you various disclosures and informational forms, including a Good Faith Estimate (GFE), which estimates your closing costs, and a Truth-in-lending statement (TIL), which itemizing the rates and associated costs for the loan.
Once all of the documents have been submitted to the lender, the underwriting process begins. Underwriting, generally takes 24 to 72 hours, but could take longer if the lender determines that additional documentation is required. If everything is in order, the lender will issue an approval and a commitment letter. More often than not, however, the lender will issue a conditional approval which requires certain conditions (such as a satisfactory appraisal) to be met before the loan is truly approved.
When all of the conditions of the purchase agreement have been met, your attorney will schedule a closing with the seller’s attorney. At the closing you will sign the varios loan documents and closing papers, and pay the balance of your down payment. After the closing you will immediately take ownership of the house, and the deed and mortgage will be recorded in the County Clerk’s office.
Don’t get blind sided by unexpected fees. The following is a list of the basic closing costs that every buyer should expect to pay. Each sale is different, so ask one of our agents to help you understand your specific situation. We’ll make sure that you are prepared, so that there are no surprises at the closing table.
Lender Fees: origination points, preparation and establishing an escrow account.
Attorney Fees: document preparation/review & closing attendance.
Third-party Fees: title search & insurance, inspections, credit reports, and appraisals.
Government Fees: deed recording and state & local mortgage taxes.
Other Fees: homeowner’s insurance, loan interest, and real estate taxes, apportionments.