Step 1- Get pre-approved by a reputable lender of your choice, this is crucial before beginning the house hunting process. You will need a written pre-approval letter on hand when submitting a written offer on a property.
Step 2- Choose a realtor, they can show you any home you are wanting to see no matter who has it listed. It is important to work directly with one agent that knows you and knows what you are looking for in a home. Pick an agent that has your best interests at hand, the listing agent works for the seller, you need an agent working for you!
Step 3- Go house shopping.. Once you have located the home you are wanting to make an offer on your agent will run comparables for you to ensure that the amount you are wanting to offer is within range for what the homes in the area have been selling for. You will then submit a written offer and begin negotiations with the seller. Once the contract is signed by all parties you are now in a fully binding executed contract. The earnest money and option check will need to be delivered to the proper parties at this time. The earnest money check is made payable to the title company and will be applied to your bring to closing funds when it comes time to close on the transaction.
Your option check is made payable to the seller and is typically $100 for usually a 7-10 day window to get your inspections done on the home and negotiate any repairs needed if there are any. It is important to line up all of your inspections as quickly as possible and not wait to the last minute of your option period window, all inspection fees are buyer expenses and are paid out of pocket by the buyer at the time services are rendered. If it is necessary for you to terminate the contract during your option period you will receive a return of your earnest money but the option money is kept by the seller as it is a non-refundable payment. If negotiations are successful and the buyer moves forward the option money is applied to your come to closing funds along with the earnest money.
Step 4- Start getting home owners insurance quotes and communicate those numbers with your lender, the quote amounts could be a critical factor in your monthly payment amount.
Step 5- Your lender will be communicating with you during this time on items they are needing and where the loan stands on their end. Your lender will order the appraisal on the home, some lenders require this to be paid at the time it is ordered as it is a buyer expense. The appraisal will need to come back with a value of the sales price or higher. If this does not take place and the value comes in lower than the sales price you will need to renegotiate the sales price with the seller or the buyer will need to pay the difference at closing along with the other closing expenses already outlined. If buyer and seller can not work out an agreement on the sales price after the home does not appraise and buyer is not willing to pay the difference the contract can be terminated and the buyer will receive their earnest money back.
Step 6- If seller has not provided a current and acceptable survey to the buyer one will need to be ordered, this document is required in order for the loan to close. This is important to determine the boundaries of the property and any other easements, etc. that may exist.
Step 7- We are waiting for the key words to be issued by your lender “Clear to Close” this is why it is important to be in communication with your lender during this time and timely providing them with any documentation they have requested. Once we have received these words then your lender is in communication with the title company to start preparing documents and getting the HUD ready for final approval.
Step 8- Once the HUD is approved your lender will let you know how much money you are bringing to closing. All funds brought to closing must be wired directly to the title company atleast 24 hours prior OR brought in the form of a cashier check made payable to the title company. Prior to closing you will do a final walk through on the property to confirm the necessary repairs have been made. After that all parties arrive at the title company depending on their scheduled closing times. Once all documents have been fully executed by all parties and funds have been distributed the file is then consider fully closed.