The process of buying a home is like getting married, one part love and the other part legal. Now that you’ve found that perfect home, you’re ready to make it official. The long search has finally paid off.
Hopefully you have found a good real estate agent or Realtor to guide you through the process. At the very least, you should enlist the services of a real estate attorney to protect your interests. Regardless of your chosen path, here is a breakdown of what to expect when buying a home.
Buying A Home: It’s Time to Make an Offer
If you’ve received a pre-approval, you already have a good idea of how much you can afford to spend. Your real estate agent will help you analyze the market by looking at similar properties and comparing them to the one you wish to call home. If you’re going it alone, you will need to do the research yourself.
The details of your offer act somewhat like a blueprint for the rest of the home-buying process. Take time to really think things through, because your offer becomes legally-binding once it is accepted. Pre-offer is also a great time to make sure the home you want is the right fit.
Expect to Negotiate
In most cases, your first offer will not be accepted. It is extremely common for the seller to counter your offer with terms of their own.
You’ve Reached an Agreement
This can be a time of excitement for home-buyers, but the process is just getting rolling. The terms of your purchase are now a legally-binding contract. The clock starts ticking on deadlines set in the contract like the buyer’s due diligence and the seller’s disclosure of property condition.
Don’t panic if you discover something you can’t live with along the way. These contracts usually have built-in contingencies to protect you in case you find a problem with the home, location or financing.
Payments, Loans and Insurance, Oh My!
A little cash upfront can grease the seller’s wheels, so it is likely that you offered some in earnest. If so, it is time to write the check so that your agent or attorney can put it in an escrow account until closing. Your contract should include contingencies to get that money back in the event that the contract is canceled.
If you don’t already have a lender lined up, now is the time to find one. This process is easier and less time-consuming if you were pre-approved.
The lender will need to inspect the title to the property to make sure there are no liens or other barriers to ownership. They will also order an appraisal to make sure the house is at least worth the amount you are borrowing.
If you have a preferred insurance agent, let them know you need estimates for homeowners’ insurance. If not, find one or ask your real estate agent or attorney to suggest one. This insurance is not optional.
Time to Inspect the Premises
As part of your due diligence, you must have the home inspected before closing. You are required to pay an inspector to make sure the house you are getting is the house you are expecting. Ask your real estate agent for referrals if you aren’t sure who to hire.
The results of the inspection may reveal necessary repairs or maintenance. You can negotiate with the seller to have these issues tended to. If there is a major issue, or something you just don’t feel comfortable with, you may be able to back out of the deal completely. Talk with your agent or attorney for help negotiating any repairs or maintenance.
The seller has the house in tip-top shape. Your lender has given you the green light. It is time to close this deal and get you into your new home. Feel free to get excited.
When you show up to the closing, make sure you bring any funds you are required to pay, such as a down payment or closing costs. Your agent or lender will tell you what you need.
Taking Possession of Your New Home
All documents will be recorded in the county records. The title company will notify you when the title has been recorded. It is time to make arrangements to pick up the keys.
You will receive your policy of title insurance in the mail from the title company. This document is an assurance that the property is vested in your name and free of any defects of liens.
All that’s left to do is move in and find a safe place to store your all your documents. Oh, and wait for payment information from your lender.