The home buying process can be overwhelming at times especially if you have not gone over what it entails an agent. It is important to educate yourself on the home buying process and typically when a buyer is aware of the process the transaction runs much smoother for both the agent and the buyer.
The first step in the home buying process is to get pre approved with a lender. This is important so you and the agent know what price range to be looking, is also necessary for the agent to submit with your offer. It is VERY important to choose a good lender, properties sometimes fall out of escrow because of the lender’s doing, so it is very important to have someone who knows what they are doing. We work with a great team of lenders and would be happy to refer you to one of them to get the process going.
The next step is to sit down with your agent to talk about what specifically you are looking for in a home and set up what is called a “Portal” so you are able to see what is on the market that fits your criteria. You then chat with your agent about which homes interest you the fun starts!
You get to go house shopping!
Costs to know about in a transaction:
- Credit report (Covered by lender)
- Closing Cost – about 3% of purchase price
- Home Inspection – $389 (our preferred vendor)
- Pest Inspection – $95 (our preferred vendor)
- Home Warranty – $380 (our preferred vendor, preferred package)
- Homeowners Insurance – call for rates
After choosing you perfect home your agent will submit your offer which includes the following items:
- The Offer
- Agency Relationship Form (States the agent is representing you as the buyer)
- Copy of deposit check
- POF (Proof of funds)
- Letter to the seller including pictures
When your offer is accepted you now in what is called “Escrow”. A title company is the third party in a transaction with the buyer and seller which handles all the money. The title company holds the escrow which essentially is like a bank account for the transaction.
Within 3 days after your offer is accepted you will drop your deposit check off at the title company (Sometimes mailed or electronic transfer).
Once in contract, you lender will send out an appraiser who will determine the value of the home. If the value comes in higher then the purchase price – Congrats! Instant equity! If it comes in lower then the purchase price then a conversation needs to be had between listing and buyers agent to see how they are going to resolve.
Unless specified otherwise you have a 17 day contingency period. This gives you 17 days to do all your due diligence such as home and pest inspections which your agent will schedule. Most agents have preferred vendors and can suggest good inspectors for you. Other inspections are sometimes needed which your agent will advise. One your 17 days is over you will “remove contingencies” which means your deposit at this point is non refundable.
During this process you will also be in close contact with your lender and signing paperwork on their side as well.
Communication is key to a smooth transaction. The home buying process can be overwhelming at times, after all you are spending large amounts of money. Communication with your agent is very important, being open and honest helps your agent talk you though decisions and feelings. Essentially they are an advisor and should also be an educator.
You will do what is called a “final walk through” 3-5 days before closing to ensure the property is in the same condition as when you first walk it.
Lastly you will sign final docs at title. This is when you will bring the remainder you down payment and the rest of your closing cost. You lender will also work closely with title to make sure that you loan docs are signed and the loan funds on your behalf.
Save the best for last… you get the keys to your new home!