Home Buying Made Simple
There is a method used to make the home buying process go smoother and more efficiently. If you go about it all willy nilly (that means with no rhyme or reason), it will take longer to close and potentially even cost you more money. As with anything, if you do the research first and go about the process right the first time, it will save you a lot of potential headaches.
Step 1: Pre-qualify
Do you not wait until you find your dream home to get pre-qualified. There’s a good chance that you will lose out on getting the contract because you have to get prequalified before you can put the offer in. You usually have to provide proof of a pre-qualification upon contract acceptance. If you are paying cash for a house, you will have to provide a proof of funds letter.
Also, you want to make sure that your dream house falls into a price range that you can afford and you are able to get qualified for. There’s no point in submitting a contract on a house for 350K if all you can afford is 175K. In addition, try to get the best interest rate available during this time and look for any special programs that may be offered as incentives to buyers.
Pre-qualification is an easy process and generally only takes a few hours. You can get qualified through your bank or credit union or a mortgage company over the phone.
Step 2: Find an Agent
Do your research and find an agent that will work with you to find you the house you want. Look for someone that you know comes recommended. Some agents don’t want to spend time looking at houses and will limit their buyers to two or three showings. Find someone that is committed to doing whatever it takes for as long as it takes.
If you find yourself stuck with an agent that doesn’t want to do their job, make sure that you did not sound an Exclusive Buyers Agreement. If you didn’t, you are free to walk away and find a different agent if you’re not satisfied. If you signed an Exclusive Buyers Agreement, then you are bound to that agent.
Find the perfect house
Take your time and find the house that fits your needs. Don’t be pressured to make a hasty decision as this is a decision you will be living with for the foreseeable future. Make sure the floor plan fits your needs as well as the neighborhood and job commute time.
After you find the house you know you want, sit down with your agent and fill out a sales contract. Your agent will guide you as far as what to ask for in price, closing costs, due diligence, and other areas. It’s typical to give the seller two to three business days as the due date for accepting the contract terms.
Once the contract is signed and returned, your due diligence period begins. The earnest money is delivered with one to three days of binding contract date.
Due Diligence Period
During the due diligence period, typically 10–15 days, you will use this time to discover any reason not to purchase the house and are able to back out of the contract with no penalties or legal ramifications.
I recommend my buyers get a home inspection as soon as possible to discover any hidden defects and I also recommend that they drive by the house and through the neighborhood at several hours of the day and night to discover any unfavorable qualities. Keep in mind, any decision to back out of the contract needs to be made before the due diligence period is up.
Closing Documents and Lender Information
During this process, your loan will be in underwriting. It is of the utmost importance that any documentation that they request from you is submitted to them in a timely manner. Failure to do so may result in the sale falling through and you may be liable in a civil suit.
Some of the items they may request include previous years tax returns, pay stubs, receipts, etc.
Your lender will also order any appraisal that needs to be done. The appraisal process will determine the worth of the house and any repairs that need to be done in order for the loan to be financed. Said repairs found by the appraiser are not negotiable.
Closing day finally arrives. It is the day you’ve been waiting for for the last 4 to 9 weeks! If you followed most of the above steps, it should go off without a hitch. But don’t celebrate until the papers are signed and the keys are in hand because things can happen up until the very last minute. I’m not trying to be a negative Nancy but I’ve seen it happen all too often.
Once you leave the closing office, the house is yours and house warming celebrations can begin!
I hope this article has been informative and helpful for anyone that is considering buying a home or selling a home. I will be writing another article shortly on how to rent out your home, how to list your home, and how to get your house ready for sale.
The biggest technological advancement of my lifetime was the invention of the internet. After that, chat rooms sprang up…
Kylie finds herself funny and is a mixture of sarcasm, White Zinfandel, attitude and love. In addition to humoring herself, she also is a Real Estate Agent and a Property Manager. She lives in Georgia with her huge, loud family.