Home Buying Process
The Home buying process for a First Time Home Buyer
- The first part of the process is finding a lender, and I would start talking/looking at some now, so you can get a feel for who would like to work with because once you find the home you want the process will move a lot faster if you have someone you are ready to use. If you want to use the first time home buyer credit or are interested in buying a foreclosure you will need to find a lender that is qualified for both of those.
- When you speak with them they will verify income for everyone you want to have on the loan, as well as payment/credit history and whether you will have the available assets to cover closing costs. They will usually ask for W2 forms, and your past 2 years tax returns as well as employment verification names and numbers, they usually want to see a mostly steady job history. If you do not have enough open lines of credit they can sometimes use utilities or landlords as references. You can get a pre-approval first that will give you an idea of what your buying power is and then when you are ready to put in an offer we will get your lender the details and they can get you a pre-qualification letter.
- Next is finding a home you love. When we talk, I will be asking you some general questions to get a feel for what you are looking for, and I will send you some forms that I am required to have you sign before I can start showing you homes, so please get these back to me asap!
- Once I get the forms back from you I will start sending you potential homes via email for you to look through and we can start setting up days and times to view the properties. (most appointments require 24 hours notice)
- When we find a house that you are interested in I will contact the listing Realtor, and make sure that there are no other offers on the home, as well as find out if they have already had an appraisal, inspection or survey done. The process is a little different for a foreclosed home, with those there is already an appraisal and a preliminary inspection done, and the listing will usually have any repairs that are needed and the amount that is approved to have them fixed, if there are no repairs you can use any lender you prefer, but if there are repairs needed for the loan to be approved you will need to find a lender that is 203k certified, I can provide you with a list if that is the case.
- I will then get you a Comparative Market Analysis which is called a CMA for the property you are wanting to buy, it will have recent sales of homes in the area that are similar, and will give you a better idea if they are asking a reasonable amount, or if you should try to negotiate for a better price. Once you have decided on the amount you would like to offer I will put together a contract package which will have your offer and will tell you the amount of Earnest Money which on a home under $100,000 is usually $1000, and then incrementally larger depending on the purchase price, as well as the Option fee, which is normally at most $150 this basically just insures you from 7-15 days to get a property inspected and appraised and to get all of the earnest money back if you need to change your mind for any reason.
- I will then submit your offer to the listing Realtor and we will usually hear back within 48 hours. These can normally be e-signed but with foreclosures the process is a bit different you will have me put in a bid, and then when we get the offer accepted you will have to sign the documents in person and provide a pre qualification letter. Recently some Realtors'' are asking for a pre-qualification with the offer, so after I get the contract written up you would go to your lender of choice and then I would submit the offer.
- Once we hear back from the listing Realtor they will respond with a contract acceptance counter-offer or rejection, if it is a counter-offer or rejection, we go back to the table on what price you would be willing to offer or if you want to move on from that property. When they accept we will get the executed contract (this just means everyone has signed the offer) to your lender and they will order an appraisal if it has not already been done, this is usually an upfront and non- refundable fee of around $450, I will also need to collect the earnest money (money order) to the title company for the property, along with any option fee. You will then have 15 days to get the inspections done to your lenders specifications, I would recommend getting a foundation analysis done before anything else they are normally free and will let us know if there is anything major right off the bat, your lender will let you know if you need a termite inspection, or plumbing and electrical/hvac. The lender will usually have a bunch of things to be co-ordinated with the inspection teams and yourself, so once we get there I''ll make sure that everyone is scheduled and that they can get into the home when needed as well as be checking the status with the lender every day to see if they need me to schedule anything or give there teams access.
- After the appraisal comes in (usually not more than a week after the lender orders it) we will have to see if it is higher than the offers accepted price. If it is lower we will have to re-negotiate with the seller as the lender will not normally insure over the appraisal price. After the price is agreed upon again the lender or I will order a survey of the property if there is not an existing survey (around $350 and a 2 to 4 day wait) I will arrange with the lender and the title company for your closing date (when you sign everything)! You will normally get the keys to your new home within 24 hours of your closing!