STEPS TO BUYING A NEW HOME

Often times when someone thinks about buying a new home the process can seem a little daunting. Where do you start, who do you work with, what will you need to provide; questions about the market, home inventory, there are a great many questions that need answering. The follow is a brief outline of the general process, which you will answer many questions you may have about the home buying process.

Select a Lender…
Selecting a lender to work with is the first step because you will want to get pre-approved for any home financing that will be required to close the home purchase. This is a critical step that should not be overlooked. During this consultation, your loan consultant will work through a loan application and determine how large of a loan you are qualified for. You should be prepared to discuss your employment, income and asset situation in detail for a proper evaluation to be completed. In addition during this conversation your lender will have the opportunity to discuss current interest rates, how the cost of closing affects the final rate of interest, and prepare you for any potential market corrections that may happen while you find your home. When it is appropriate, credit will need to be run to complete the preapproval process and issue letters on your behalf to your buyer’s agent for the listing agent demonstrating your ability to secure financing and finalize the purchase. All things considered the entire preapproval process can be completed in a single conversation. Once you know what you are qualified to borrow, and your tolerances in regard to particular rates and programs currently offered, you know exactly what you can afford to purchase. At this point in time you are ready to look at real estate on the open market. While doing so your lender takes a side role providing market updates as to rate and pricing changes, as well as preapproval letters as needed to make offers.

Select a Real Estate Agent…
The only reason selecting a real estate agent is listed as number two is because getting preapproved before looking at real estate requires you to have a lender selected, but there is no reason why you cannot have a real estate agent selected before or while you are getting preapproved. If you do not usually you lender will have someone they trust to represent you as a buyer’s agent. The agent you select should be selected for good reason. They should be professional, have a respected a credible reputation and relevant credentials regarding what it is you are trying to accomplish. When selecting a real estate agent you should have a conversation at which time you determine whether or not they will legitimately represent your interests while finding a home and negotiating the final sales price and terms of the contract.

Agent Home Buyers Consultation…
The agent home buyers consultation provides both the agent and buyer the opportunity to discover whether or not they are an appropriate fit for one another. This is time spent together when you discuss what exactly your goals for homeownership are. Price range is discussed, particular terms that you feel are important to the contract, locations of interest, areas you are not interested in. It should be mentioned that this consultation with your agent should happen before you begin looking at homes. It will give you a final opportunity to make sure you are satisfied with the agent you have chosen while giving your agent the opportunity to isolate your specific needs so they can conduct their research and search inventory to your specifications.

Look at Homes…
Looking at homes is typically what home buyers are really looking forward to, and usually they have conducted a little reconnaissance in open houses and like before actually getting to this step. If they’ve followed this process this stage is likely to be incredibly exciting because their agent having had time to the research should have a wide variety of homes available for an exclusive showing in their price range. Generally speaking, if your agent has done their job most of the homes they show you here will “feel” right. You may even be prepared to make an offer immediately. When looking at homes, stay focused on what is most important to you. There is no specified time that one should spend looking before making an offer.

Select a Home…
Selecting the home you finally decide to negotiate for is a personal decision that should not be rushed. Often times shopping for a new home can be emotional. Be sure to take the time to properly evaluate the homes you are seriously considering. Typically you will be discussing terms with your lender at this point in time to make sure loan terms are still favorable and acceptable. Make sure you consider points that are sometimes overlooked, traffic during rush hours, noise from local businesses or freeways, school districts, age and condition of the property, the list of potential factors is indefinite, but once you have determined the right home, you are ready to make an offer and enter into negotiations.

Offers and Negotiations…
Crafting an offer is a very important. With your offer you will want to include a preapproval letter from your lender which they can will want to draft, endorse, and date. An offer can include anything, specific contingencies, escrow periods, seller credits, items to come with the home, just recognize the more complicated the offer the more likely the seller will go with someone else. Your offer will be written by your agent at your instruction. A well structured offer will sometimes be accepted at face value, but more likely is a counter offer. Should you receive a counter offer the seller have entered into negotiation. Read the terms and structure all counter offers as carefully as your original offer. Once a counter offer is accepted you are in contract.

Selecting Title and Escrow…
Typically it is in the contract where title and escrow are specified. Wherever and whoever is responsible for determining title and escrow, once in contract no time should be wasted opening title and escrow. Preliminary paperwork will need to be worked up by title and escrow will need to review initial fees and convey them to the lender so they can complete the disclosure process issue good faith estimates based on agreed upon purchase price and third party fees associated with closing. With title and escrow open, it is time to discuss terms once again with your lender.

Meet with your Lender…
Meeting with your lender at this stage in the process will allow you to provide them the remaining paperwork required to underwrite, and fund your loan. You will review current loan terms discuss the appraisal procedure, and discuss locking the interest rate. This is an important meeting at which time you will go over the remaining timeline associated with your purchase, including contingency removal and turn times associated with underwriting, drawing final paperwork, and funding your home loan. At the conclusion of this meeting you should have an excellent understanding of what you will be required to provide to complete the transaction and the steps left to complete. This will not be your last conversation with your lender but is critical in determining the specific direction of financing moving forward.

Inspections and Appraisals…
Inspections and appraisals occur early after moving into contract. Typically the buyer is responsible for the costs associated with the inspection and appraisal, however both are highly recommended. An inspection will inform you of any deficiencies in the home, and may even require the seller to make certain repairs before closing. The appraisal demonstrates that the collateral supports the purchase price and financing. Usually your real estate agent will assist you in setting up the inspection, and your lender will assist you in placing the appraisal order. Once appraiser and inspector have been out to the home results are usually available in two to three business days.

Walk-through…
The walk-through occurs usually before you remove the contingencies and final paperwork if signed. This is your final opportunity to walk through the home and make sure all points that were supposed to be addressed during escrow, were addressed to your satisfaction. This is your time to make sure everything is in order which it more often than not is and things move forward. After the walk through you should feel comfortable in removing the final contingencies associated with the purchase contract.

Closing on Your Home…
Signing final paperwork will occur with a notary present.  As these individuals are not versed in finance, rather they are there to ensure as a witness that you are given all disclosures and paperwork for signatures, any questions regarding said papers should be directed to your finance officer and/or Realtor if he/she is not present with you for the signing.

Moving Day!!!!!!!!!!!!!!
Congratulations on your new Home!