Steps in the Home Buying Process
Following are steps to take from the first thought of buying a home all the way to closing on your new home and receiving keys. Be sure to make full use of the available links below within each step. My goal is to make your home buying process as smooth as possible.
Step 1 - Establish Goals
Contact Ryan to discuss your timeline and goals. A typical transaction from contract to close is around 45 to 60 days. Ryan will assist in planning your home search, transaction timeline, and closing to meet your desired schedule. Your short term and long term goals are also important to discuss with Ryan as it may affect the type of, or particular location of the home that may be recommended to obtain the best return on your investment.
Step 2 - Lender Consultation and Pre-Approval
Contact a mortgage lender to discuss your financial qualifications, as well as a comfortable price range you would like to stay within for your home search. Then begin the loan pre-approval process with your lender. Once we find your dream home, the seller will require that we submit a solid approval or pre-approval letter from your lender along with the contract to show that you are financially capable of purchasing their home, and that your loan process has begun.
Important NOTE: Between now and closing, this is not the time to make any large purchases (especially on credit) like appliances, expensive media equipment, a car, etc.). Doing so can affect your loan qualification. While you may still qualify for a loan, your interest rate may go up as a result.
Step 3 - Home Search and Home Tour - Begin your official home search with Ryan based on your lender's recommended sales price range and schedule showings with Ryan of your favorite homes.
Step 4 - Property Research - Once you establish a home you would like to submit an offer on, I will then run comparable sales to make sure the home is priced correctly. I will also check floodplain maps, will pull any seller's disclosures, and will verify any exemptions on taxes.
Step 5 - Offer Submission - Submit formal offer in writing. As we draw up the terms, I will walk you through the entire contract and any addendas to the contract.
Step 6 - Offer Acceptance - Once the seller accepts your offer, the contract is formally executed. All dates and timelines within the contract are subject to the final contract acceptance date (Effective Date).
UNDER CONTRACT - CONGRATULATIONS!
OPTION PERIOD BEGINS
Step 7 - Earnest Money and Option Fee - Once the contract is accepted, the Earnest Money (approximately 1% of the sales price) is deposited with the title company, and the Option Fee (negotiable, but typically between $150 - $400) is given to to the seller.
Step 8 - Inspections - Choose from a list of home inspectors, then schedule and conduct inspections as soon as possible.
Step 9 - Repairs Negotiations - Discuss the inspection report with Ryan to determine what repairs to ask the seller to address prior to closing. In addition to, or in place of requesting the seller take care of repairs, you may also ask for an allowance for the repairs (typically in the form of closing cost assistance in lieu of repairs), or a price reduction, a combination of either, or you may simply use the Option Period to withdraw from the contract. If withdrawing from the contract, you will permanently forfeit your Option Fee to the seller, but will receive a refund of your Earnest Money IF you withdraw within the Option Period. Strict compliance with dates and performance within the contract, including the Option Period, will be required.
Step 10 - Insurance Quote - It's best to get quotes from a few home insurance companies during the Option Period. In the event your insurance quoted causes your total monthly payment to become unaffordable, you can use the Option Period to withdraw from the contract.
OPTION PERIOD ENDS
Step 11 - Order Appraisal - Check in with your lender to make sure he/she has everything required for your loan approval. Now that you are out of the Option Period, give your lender the go-ahead to order the appraisal, if you haven't already done so. The appraisal is ordered by your lender to assess the value of the property to make sure you are not paying too much for the property. Typical turnaround for an appraisal once ordered is 5 - 10 days.
Step 12 - Schedule Movers - Select from a variety of movers. NOTE: If there is a delay in closing for any reason (typically due to loan processing), you will want to reschedule your movers accordingly.
Step 13 - Order Survey - Once appraisal comes back clean and at value, authorize your lender to order the survey of the property. The survey is a measurement of the boundaries of the property and how the home and all improvements (pool, sidewalks, decks, storage sheds, etc.) sit on the property. The primary goal of the survey is to ensure the improvements do not encroach onto any easements, and if they do, to what degree.
Step 14 - Schedule Utilities - Select from a variety of utility providers and schedule utilities to go into your name the day of closing to avoid any reconnect fees. NOTE: If there is a delay in closing for any reason (typically due to loan processing), you will want to reschedule your utilities accordingly.
Step 15 - Review Closing Disclosure - At least 3 days prior to closing, we will receive a closing disclosure statement outlining your loan charges, title charges, pre-paids, any credits back to you, and a bottom line amount you will bring to closing in the form of a cashier's check payable to the title company.
Step 16 - Final Walk-Thru - A day or two before closing (sometimes the same day just before closing), we will walk through the home one last time to make sure it is in the same condition as when we went under contract.
Step 17 - Closing - Meet at the title company, sign final closing documents, wait for final funding to the seller, receive your keys and move in! CONGRATULATIONS!!!