The Home Buying Process- Step by Step
If you are a first time home buyer, OR if it's been a long time since you've been through the process, this step by step guide is definitely something you need! I include this list in my buyers packets as a guide and refer to it often.
- Hire a Realtor-You can sit up all night searching site after site on the internet, drive through the neighborhoods you would like to live in looking for signs, check the classifieds in your local paper. OR- you can hire someone to do the searching for you. Make sure it's someone you like and interview them for the job. You want a good fit for you, they'll be in our lives for at least a month. They'll also know the process, the forms, negotiating, and all about protecting your investment.
- Find a good lender. Every Realtor has someone they work with regularly- and it's not just because they like them personally. A good Realtor will use a lender that is consistent and closes on time. Time is always of the essence, and a reliable lender is key in every real estate transaction.
- Find your home and make an offer. Your realtor will do the research to make sure it's priced right, and together you can prepare an offer. Depending on the market- they will give you their best advice on writing an offer that fits your needs and is desirable for the seller. A few things you should consider in your offer:
- Down Payment- Your down payment always depends on your lender and the loan program you decide to use. It can be $0, or it can be up to 20% of the loan.
- Earnest money- this is usually 1% of the amount of your offer. So if the home is $300,000.00, earnest money is $3,000.00. This is essentially a deposit on your home. It gives the sellers consideration and is deposited into an escrow account to be settled when you go to closing.
- Option- The option period is a given amount of time you can purchase to terminate the contract for any reason. That means if you find something out about the property during inspections- you have the ability to negotiate or walk away. Or if you decide that you just no longer want to buy, you have the unrestricted right to leave the contract for any reason. The option period is usually $10.00 per day for up to 10 days.
- Survey- if they have one great! If they don't, this is another point in the contract to negotiate.
- Home warranty- a 1 year home warranty averages between $475.00 and $550.00 and this may be negotiated into the contract.
- Closing Costs- closing costs are paid for at closing and are separate from the down payment. For some loans and different programs there are ways to roll them into the loan or they can be negotiated to be paid for by the sellers.
- Closing date- normal close time is from 30-35 days, but this can be negotiated to fit your needs or the sellers needs.
- Offer acceptance- YES! You have an executed contract! Now it is time for you to get those earnest and option money checks to title.
- Inspections- now is the time to hire an inspector to look over your home. The cost will always depend on the inspector you choose, and usually starts around $250.00 for a smaller home. Some loans might also require a termite inspection, and if the home you are purchasing has a septic tank or well you will want to talk to your Realtor about getting those inspected as well. These inspections are crucial. You can use the inspection reports to negotiate repairs or price reductions and it will keep you from having to deal with unexpected (and expensive) surprises.
- Appraisal- now that negotiations are finalized and everything is set to go- it's time to order the appraisal. This is another expense that takes place before closing, but also a very important step! This cost is also completely dependent on the type of loan. The average price is around $500.00 but can be more or less depending on the size of the property.
- CLOSING!! This is it- you've made it. you're Realtor has walked you through the process and even made sure title, survey, and every other integral part has made it to this point! Your Realtor is going to want to take pictures, so dress up! And bring some tissues!
So that's it. Simple right? This is why you hire a Realtor. They can walk you through the process and smooth out the bumps along the way!
Got a question? I'm here to help!
Realtor #0650939
210-241-0268
jeankrealestate@gmail.com
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