New Buyer’s Guide
Table of Contents
.01
Finances
• Obtain a financial pre-approval (proof of
funds for cash purchase)
• Prepare for additional costs
.02
Search
– Preview potential properties online
– Schedule showings and view the properties
you are most interested in
.03
Offers & Negotiations
– Write an offer to purchase on your favorite property
– Negotiate the terms of the offer and accept the contract
– Deposit Escrow, Complete Loan Application and Homeowners Insurance quotes
.04
Inspection Period
• Conduct Inspections
– Resolve/Negotiate Any Issues from Inspection
.05
Financing Period
•Your lender will order the appraisal
• Obtain Homeowners Insurance
.06
Preparing To Close
• Title company will conduct title search and order survey
• Receive closing statement/clear to close
• Wire funds to closing company
• Conduct a final walk-through of property and close
• Closing day: Get your keys, it’s all yours!
1. FINANCES
FINANCING: A mortgage lender will be able to take your financial information and determine what amount you will be able to borrow. Having your pre-approval letter in hand before we start searching will save us time and make sure we don’t miss out on the perfect home opportunity. The pre-approval letter will accompany an offer.
CASH: If you’ve got the money in the bank and you are ready to purchase your home in cash, that’s great. I will inform you as to your closing costs and we will need a proof of funds to supplement any offers. You can acquire a proof of funds from your financial advisor or your banker to show that you have a balance that meets the purchase price.
2. SEARCH
Once you’ve got your finances in order, the fun of looking for the perfect home begins! I will set you up on an automatic search through the Multiple Listing Service (MLS), which is the database that Realtors use to list and search for homes. The moment a home that fits your search criteria is listed for sale, it will be sent to your email inbox. If we ever need to adjust the search criteria, just let me know and I can make
any change you need. Make sure to let me know which homes pique your interest and we will set up some showings.
3. OFFERS & NEGOTIATIONS
IN ORDER TO WRITE AN OFFER, WE WILL NEED THE FOLLOWING INFORMATION:
PRE-QUALIFICATION LETTER OR PROOF OF FUNDS
01. OFFER PRICE
I will help you determine the property’s fair market value.
03. FINANCING AMOUNT
What percentage of the loan are you financing, and how much you are putting down.
02. ESCROW DEPOSIT
Usually 1-2% of purchase price.
04. CLOSING DATE
If getting a mortgage, this is typically 30-45 days from acceptance of offer. This will be the day the keys are handed from seller to buyer.
05. INSPECTION PERIOD
Typically the buyer shall have 15 days, unless otherwise stated on the contract, to perform inspections on the home and terminate or renegotiate the contract if inspection comes back
unacceptable.
4. INSPECTION PERIOD
TIP: SCHEDULE ALL INSPECTIONS IMMEDIATELY, SO IF WE NEED TO NEGOTIATE ANY REPAIRS WE CAN BEFORE THE INSPECTION PERIOD ENDS.
During the inspection period, the buyer has the right to hire a professional to inspect
the condition of the home. The inspection will uncover any issues in the home that would
have otherwise been unknown.
The standard home inspector’s report will cover the condition of the home’s heating system;
central air conditioning system; interior plumbing and electrical systems; the roof, attic and visible insulations; walls, ceilings, floors, windows and doors; the foundation, basement and structural components. You will receive a written report of the inspection. You may be present for the inspection if you would like to ask the inspector any questions.
5. FINANCING PERIOD
TIP: IT IS VERY IMPORTANT NOT TO
MAKE ANY MAJOR JOB CHANGES,
MAJOR PURCHASES, OR OPEN NEW
CREDIT CARDS OR LINES OF CREDIT,
AS ANY OF THESE ACTIVITIES COULD
ALTER YOUR QUALIFICATIONS
FOR A LOAN.
APPRAISAL: An appraisal is an estimate of the value of the property by a licensed professional appraiser. Once any problems during the inspection are solved, the appraisal will be ordered by the lender and paid for by you. The goal of the appraisal is to verify the value of the property for the lender and to protect you from overpaying. The contract is contingent upon whether the appraisal comes in at or above the purchase price. If the appraisal comes back short, we will be back to the negotiating table.
OBTAINING A MORTGAGE: You have 5 days from the date of contract execution to begin the mortgage loan application. During the 30-45 days before closing, the lender will be finalizing your mortgage.
HOME INSURANCE: Your lender will require you to obtain a homeowner’s insurance policy. You will need to get the lender this information before closing.
6. PREPARING TO CLOSE
TIP: IT IS VERY IMPORTANT NOT TO
MAKE ANY MAJOR JOB CHANGES,
MAJOR PURCHASES, OR OPEN NEW
CREDIT CARDS OR LINES OF CREDIT,
AS ANY OF THESE ACTIVITIES COULD
ALTER YOUR QUALIFICATIONS
FOR A LOAN.
SURVEY: Unless the seller already has a recent & acceptable survey of the property, the buyer is required to pay for the survey (this will be in your closing costs). The title company or I will order this for you. The survey is a sketch showing a map of the property lines/boundaries among other things. The survey will show if there are any encroachments on the property.
TITLE: The title company will conduct a title search to ensure the property is legitimate and find if there are any outstanding mortgage liens, judgements, restrictions, easements, leases, unpaid taxes, or any other restrictions that would impact your ownership associated with the property. Once the title is found to be valid, the title company will issue a title insurance policy which protects lenders or owners against claims or legal fees that may arise over ownership of the property. This will also be a part of your closing costs.
CLEAR TO CLOSE: The magic words! It means the mortgage underwriter has officially approved all documentation required to fund the loan. All that remains is the actual closing process.
