You have your dream home wish list at hand and you are off to the races to find your perfect home. Combined with your personal preferences, input from different sources like the internet, family, friends, and your agent, you begin the search.
How soon you will find your perfect home will vary from person to person and place to place. Some will take a little longer and others will find it with their dream right away.
As a buyer there are certain steps of the process you can expect:
Mortgage pre-approval:
Getting pre- approved for a loan is the very first step you should take to streamline the home buying process.
Earnest money:
In every real estate transaction you solidify your intent to buy by putting down earnest money on the property. In general, the amount is about 1% of the purchase price, but is open to negotiations. The earnest money goes into a trust account that is either held by the listing agent or title company. This check is not written to the seller and this money is part of your credit towards your home purchase when the transaction comes to a close.
Making an offer on your dream home:
You have found what you believe to be your dream home and you are ready to make an offer. After looking through the sold comparable homes, and read through the disclosure documents, you decide it is time to make an offer, with the help of your agent. Keep in mind that many sales have some additional negotiations you need to be prepared for and you need to be ready to respond to through a counter offer. During this stressful state of the negotiations your Settles Team agent will be with you every step of the way.
Acceptance of your offer:
Once everyone is happy with the terms, the parties have reached what is known as mutual acceptance and enter into a purchase and sales agreement.
Escrow has been opened.
The earnest money check has been written and deposited into an escrow account. It is being held in this trust account until closing, and will be accounted for on the HUD-1 form.
Title history and property appraisal is being ordered
Because you are already pre-approved, the home has to qualify to be able to close the loan. Yes a home has to qualify as well as the buyer and that is called a contingency. Many times that is where potential issues come to light. One of the needed qualifications is the appraisal. A home has to appraise for more than the agreed purchase price. Another could be that the title search could turn up other problems, such as it does not have a clear title.
Buyers home inspection:
During the time when the title search and the appraisal is in process, you as the buyer have the opportunity to have a home inspection completed. The home inspector works for you. They are there to check the home and point out minor and/or major problems that should be fixed before closing. When your home insepctor finds items that should get repaired before closing, your agent will need to submit a buyer’s inspection request to the seller. Keep in mind, the seller can agree to do some or all of the repairs or reject the repair request in full. Normally both sides will come to a mutual agreement though further negotiations.
Contingencies of the purchase are removed.
The appraisal comes back as good to go, the title is clear, and the home passed the buyers home inspection. With that, all of the contingencies have been removed and the dream home purchase can move forward.
Clear to close!
Your financing was already set from the beginning, the home finally passed its last hurdles, and now you are ready to sign the huge stack of mortgage paperwork. You can now become the proud owner of the home.
Ready to move!
After you signed the last document, take the keys of your new home you are ready to move.