Below are 20 Steps that you will go through in the Home Buying Process. I got this outline from a pamphlet that is distributed by the First American Title Company and then added to it to make it my own. It’s great information whether you are a first time home buyer or buying your retirement home. Some peope buy many homes over a lifetime and are still in the dark about many aspects of the transaction. I like for my clients to be informed so they know what is going on at all times.
1. Find a Realtor to represent you. If you’re buying or selling in my area of expertise, I can help you with the transaction. If you are buying or selling outside of my area, then I would like to refer you to an excellent agent in your area. Don’t just call a company and ask for an agent. Get a good one. Get one that you can trust to represent your needs. Buying and selling a home is a big deal and might be your biggest asset. Do some homework and find a good agent. I am a good agent and only refer out to agents that are well trained and experienced.
2. Get a Pre-Approval from a Lender. Again, be selective about the lender. Do some research or get a good referral. You don’t want to get to the closing day and your deal bust because of your lender. Real Estate agents work with lenders daily. Ask me for a referral. I know many lenders. I’ve used several. I have my favorites that take good care of my clients. I want you to get taken care of. I want you to be able to close on the house that I help you select and negotiate on. I don’t want to have to go back and search for another house any more than you do. I don’t want you to lose your earnest money because your lender can’t get your loan through underwriting on time. I want to refer you to a mortgage lender that I know will take good care of my client. If you know of a good mortgage lender, then you can use them. Regardless, you’re going to need a Pre-Approval so you and I know what price range to look in. Also, when we make an offer, we want the seller to take his house off the market for you to do inspections and he is not going to be willing to do that without your Pre-Approval.
3. Select the property. I show my clients all the houses in their price range based on their search criteria that they want to see. It doesn’t matter if the listing agent is a local real estate company or a big name company. Even if it’s a foreclosure or a corporate listing, I will show it to it if that’s what you want to see.
4. Make an offer on the house you choose. This must be done in writing. I write all offers because it puts my buyers at a disadvantage for me to try to negotiate verbally or through emails. I always want it in writing.
5. Serious buyers bring their check books with them. If you’re house hunting and you don’t have your check book with you, then you’re just shopping. I have too many clients to be out showing properties to unserious buyers. Look to buy and when you find the right house, be ready to make the offer and write the earnest money check. If you wait, you might miss out on that opportunity. After putting in an offer, if you and the seller can agree on contract terms, then you make a good faith deposit which is delivered to the title company. This is when the escrow file is opened.
6. The mortgage company then begins processing your loan. They will ask you for information that you will need to supply to them as quickly as possible to keep things moving along. Once the contract is executed, everything is on a strict time line to get to the closing table when you have agreed to close.
7. You will get a preliminary title report. I review this as well as my clients and the title company.
8. During your option period (usually 7-10 days after contract execution) you will need to get home inspections completed. If repairs are needed on the home, you can negotiate those repairs with the seller. The inspection is for your benefit so you know of any defects with the property.
9. The seller must provide Disclosures on the property if they have lived in the home. So it’s possible some houses may not have disclosures. For example, a bank owned foreclsoure might not have any disclosures. Disclosures are prepared by the homeowner and never by the Realtor. The homeowner must disclose any known defects about the property.
10. The lender will have an appraisal completed to confirm the market value of the property.
11. Your loan should be approved. The selling agent will want to confirm that you are no longer pre-approved for a mortgage, but now actually approved for your mortgage.
12. You will need to find a home insurance company that will provide you with Hazard Insurance on your new property. I would be happy to recommend one, but it’s your choice who you use to insure your new property. The title company and lender will need your home insurance company’s contact information.
13. The escrow officer at the title company will confirm that all conditions to the contract have been removed. So for example, if you and the seller agree that he will have a new roof put on the house your are purchasing, the title company will need to confirm that the roof has been replaced.
14. 24-48 hours before the closing, a final walk through of the property will be completed. You want to confirm that the property is in the condition it was in when you put an offer in on the property. Make sure it has not been vandilized since the last time you were there. Make sure the duties of the seller were performed as well. For example, if the contract states the carpets will be cleaned, make sure they have been cleaned.
15. Escrow instructions and loan documents reach the title company preferably a few days before closing. That rarely ever happens. Usually the “docs” get there the day of closing. The buyer signs the documents and the lender’s money is wired to an escrow account.
16. At this point, even though you’ve signed the docs and the title company has your down payment money you brought to the closing, you still do not own the house. The documents must be submitted to the lender for approval. This is the waiting time. This is when your closer at the title company is out “making copies for you.”
17. After the lender approves the documents, the loan is funded. That means the lender transfers the funds to the escrow officer at the title company.
18. You pay the title company fees for closing with them. One of the things the title company is charging you for is recording the deed. The title company records the deed for you which transfers ownership of the property.
19. When the escrow is closed a final account and settlement statement is delivered to all parties.
20. It is at this point that keys can be given to the buyers. So one things to remember – if your loan does not fund on the day you sign the documents, you will not get the keys to your new property that same day. You will get them after funding. Now it’s time to celebrate!