Don't worry, that is what I am here for. I will educate & guide you through each step in the process. Also, you will have your own checklist to follow from start to closing day!
With me as your buyer's agent, you will not experience the typical home buying process. I try to "cut the fat". You don't want to see houses that don't match your criteria, and I don't want to waste both our times showing them to you. Before we even start looking, I will send you several properties and ask you to rate them based on different categories, such as appearance, location, etc. Then, I will take this and try to narrow down the properties available to best match your preferences. You have looked at all the properties online, I am sure. My job is to listen to what you want and need most, and help you filter out all the "nos", so we can get to that one "yes".
(With my coming APP, you will be able to rate properties on your phone and send them directly to me!)
You will feel extra confident and informed with me as your agent! Below, you will find an overview of the process, and what to expect.
1. Look at your budget and determine how much you can afford.
You don't want your mortgage payment (including taxes and insurance) to be more than 30% of your monthly income.
2. Get pre-approved by the bank.
There's a difference between pre-qualification & pre-approval. "Pre-Qual" is an estimate of what you can afford, nothing guaranteed. Pre-Approval is a confirmation the lender with commit to support your purchase. When making an offer, nowadays it is pretty much required by the seller that they see the pre-approval letter. At the bank you will need at least:
- 2 most recent pay stubs
- W-2s from the last 2 years
- Last 2 months bank statements
- Past 2 years Federal Tax Returns
- Anything else they ask for
There are many mortgage options nowadays, and you don't have to decide on one right when you make the offer. We can go over them with the bank. There are loans with 100%, down payment assistant programs, and FHA loans guaranteed by the government.
3. Now, we start looking for homes!
Once you know how much you can afford, you can adjust your price range accordingly. You also want to make sure you know what's most important to you - size, location, layout, age, etc.
4. Once you find "The One", we will sit down, and write up the Offer to Purchase.
The seller can either accept, reject, or counter. We can go back and forth until both you and the sellers agree to final terms.
5. Now, the offer is signed by both parties and becomes a legal ratified contract.
It is then sent to the closing attorney's office and the bank, so they can start their end of the deal. They will continue working behind the scenes during the time period between offer acceptance and closing, which is usually between 45 and 60 days.
- The bank is going to start the official loan process. They will do a more through check of your financials in underwriting, it will be sent it to that specific government agency for approval (if needed for that loan type), they will order the appraisal, and will double check your credit a couple days before closing. So don't go to Home Depot and put a $1000 on a new credit line just because it says "no payments for a year! Once they get the loan finalized, they will send it to the closing attorneys.
- The attorney is going to do a title search to make sure the deed is good to be transferred, they are also going to offer you title insurance in case they missed something. They will get all the paperwork in order that will need to be signed during closing. The attorney will put together your "HUD-1" statement. It looks like an accounting debits and credits table & will break down every cost to each party. It will have on the bottom line, the total net to the seller and what is owed by you.
6. Your next step is to order the home inspection, usually within 10 days.
This is going to cost you about $250-$300 dollars. You don't have to do this, but it is highly highly recommended. You accompany the home inspector, and he will show you everything wrong. Keep in mind, no house is perfect. Even new houses have little things wrong. He will normally print out the report on the spot for you to keep, and will send me a copy via email.
7. We then sit down and talk about the inspection.
I am not a licensed home inspector, but can give you my professional opinion. You decide what you want/need fixed, and we will send that list to the seller's agent with a request to have these items fixed. Per the contract, the seller is obligated up to $500 dollars in home repair costs. They have the option of refusing to fix anything, and just crediting you $500 dollars. If the repairs are substantial (like $5000 on a $130,000 house), you have an "out" to the contract. You can negotiate with the seller for a lower price, or can void the contract altogether.
8. The bank will order the appraisal.
It should be done sometime around the time the home inspection is finished, and that will assure you the loan will be financed. The bank is not going to give you a loan for more than what the house is worth.
9. The seller is required to order a termite inspection.
It is usually done no more than 30 days before closing. This will be done and treatment will be given if needed.
10. The home repairs should be done by now.
An invoice from the licensed contractor should be in my inbox. Also, I should have an invoice by the termite company. These will be sent to the closing attorney as well. Sometimes the banks require the invoice certifying the repairs were done.
11. Make sure you get Home Owners Insurance.
This needs to be done sometime during this period, but definitely get it done at least a week before closing. You will need to give the bank the policy number, as they will not close without it.
12. We will do a final walk through.
We can do this anytime during the week before closing. This is when we make sure the repairs were done, and everything is the same as when we first saw it. We don't want the dishwasher to be surprisingly missing on moving day!
13. I will get the "HUD-1" statement.
Usually, a few days before closing, and we will go over it line by line. It will have your mortgage terms, the interest rate, your purchase price, as well as the attorney, bank and realtor fees. It will also have how much the seller concedes for closing costs, and how much they paid for repairs and termite treatments. On the very bottom, it will have what is owed or due to you on the left, and the seller's net proceeds on the right.
14. Closing day! We sit down with the attorney, and he goes over about 50 documents you will need to sign. You sign about 5 copies of the HUD-1 statement, and hand over your down payment. They will finally hand you the keys to your new home!
You can then start moving in, and planning your house warming party - to which I will be expecting a prompt invite!
