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Congratulations on your decision to purchase your first home. This is a very exciting time in your life! No more paying someone else’s mortgage! However this can also be an overwhelming and frustrating experience. It is important that you understand what the home buying process involves. I will be happy to meet with you and explain the entire process. Together we can determine what the best course of action will be to help you achieve your goal of home ownership.
For you, as a buyer, my real estate experience and services are at no cost! At the time of listing their home with a Realtor, sellers agree to pay a commission to both the listing agent and the buyer´s agent. It is extremely uncommon for a seller not to pay a buyer´s agent a commission.
The first and most important step in buying your first home is to talk with a mortgage lender and get pre-approved. It is very important for you to understand what price house equals what mortgage payment, and what you feel comfortable spending. Sometimes you can get pre-approved for a high price but the mortgage payment might be higher than you want. You don´t want to be house poor! This step is also important because there are so many different types of loans available and you need to know which loan program will work best for you in your circumstances. The lender will help you understand what your closing costs will be and how much money you will need for closing. This will be provided to you in the Good Faith Estimate of Closing Costs and Funds needed to close.
Once you are pre-approved, the fun begins! We can search through the thousands of homes listed to find what best matches your “wants” and “needs”. Homes that meet your criteria can be easily emailed to you with pictures, addresses and directions. At your convenience, we can set up appointments to show you the houses you would like to see. Once you have found “The ONE”, the contract and negotiating begins.
When writing the contract, there are some things that will need to be discussed: First, and most importantly the offer price. I will prepare a market analysis for you to make sure that your new home has been competitively priced. I will help you decide what kind of offer to make. Other things you will need to discuss and decide are loan type (remember: get pre-approved!), seller-paid closing costs, closing date, home inspection, and any “special stipulations” that you would like in the contract. For example, special stipulations can include things like asking for a home warranty, having the house or carpets cleaned, or what appliances are to remain with the home.
At the time of writing the contract, you will be required to put down “Earnest Money”. The earnest money will be deposited into a trust account once the contract is fully negotiated and accepted. It is kept there until closing; then it will be credited back to you as part of your funds needed to close. If the contract does NOT close, the earnest money will be distributed in MOST circumstances to the buyer. However, if you are in default of the contract, then you could risk the chance of losing your earnest money.
The first week after your contract is accepted will be a little busy. You will need to contact your lender and now make formal loan application. The lender will have a list of items you will need to get to him, such as tax returns and bank statements. The other thing that will happen in this week is the home inspection. I strongly recommended that you get a home inspection!! They usually cost between $250-300, but it is worth it! The home inspector will give us a written report of the defects found in the home. The next step of the negotiating is asking for the seller to fix necessary items on the home inspection report. Once the inspection repairs have been negotiated and agreed upon, you are practically a homeowner!
From now until closing, you can breathe a little easier. Your lender will be contacting you with additional things they need to process your loan. Just when you think you´ve got it all to them, the underwriter will ask for something else! Underwriters can seem strange sometimes with the things they ask for. Keep in mind, though, it´s all to help you get the best financing possible!
Before closing, you will need to talk with an insurance agent and get a 1-year homeowners (hazard) insurance policy. It is required for closing. Your loan will not close without it! I also recommend that you obtain owners title insurance, even though it is optional. The closing attorney handles the title insurance.
Finally! The closing! You can expect to be at closing for approximately 1-1 & ½ hours depending on how busy the attorney´s office is that day. I will attend closing with you to help you understand your settlement statement and help answer any questions you may have. That´s it! You´re done! Homeownership at last!
I hope I have helped you understand the home buying process a little better. I would welcome the opportunity to be your Realtor® and help you through this exciting time in your life. Please don´t hesitate to contact me at anytime!