The Home Buying Process...
The buying process is always a unique experience with every every home. No two transactions will ever be the same because no two homes are exactly alike. Navigating the process can seem daunting at first, but I promise you, we'll get there together!
Making the Offer
You'll start with the offer. The offer is what you put together on your terms. This will include your offer price, how much you'd like to ask the seller to pay of your closing costs, the closing date, closing attorney, earnest money and any other items you may want from the seller(home warranty, fixtures or appliances that stay).
The seller doesn't always pay the buyer's closing costs. In this market, sellers rarely pay any of the buyer's closing costs, but it is negotiable and a higher offer price means you can ask for more in closing costs(usually). You can expect your buyer closing costs to range from 2% to 3% of the sales price. This is usually determined by a number of factors including prepaid interest, taxes, state fees, lender charges, and a whole lot more. Your lender can and should break them down for you.
The closing attorney will check title, prepare closing docs and make sure they have everything needed from all parties. I have a great closing attorney if you need a recommendation. Most attorneys charge a similar rate. Not all are equal.
Earnest money is not required, but is a part of 99.99% of all contracts. Earnest money is essentially an amount you're willing to risk you pay upfront to show your interest in the property. It will go towards your final cash to close(the grand total due at closing for closing costs and down payment). The earnest money is usually around 1% of the offer price, but if you want to look serious, offer up to 3%. Any more is usually a little too risky.
Going "Under Contract"
This is referred to as being in a "binding" contract or "going binding", which means it is yours. Nobody can outbid you at this point. Once under contract you will begin your due diligence period.
The Due Diligence Period is a negotiable time usually around 5-7 days. This is when you do your buyer homework. You'll get your inspections, surveys, crime reports, etc. You can cancel the contract at any time for any reason during the due diligence period and you'll get your earnest money back.
If you've had an inspection, you'll need to negotiate repairs during this time as well.
If you have ANY questions about the home, this is your time to get the answers. Once the due diligence is over, your contract moves to "pending" status and you can not walk away without losing your earnest money, with a few possible exceptions.
Lender Docs and Appraisal
Once you're under contract, the lender will start asking for every scrap of financial information you could ever think of. Like bank statements, tax info, employment history, gift letters and more. Your lender will explain all of that and should also provide you with an "estimate of cash to close." This will break down what you'll need to have for closing and also let you know what your estimated monthly payment will be. This will change slightly before you're all closed, but not by much. The total you need to bring to the closing table will be calculated here and you'll know how much you will need to wire to the closing attorney.
The appraisal is something you will pay for up front, but the lender will order. It is basically the lender making sure the house they're lending you money for is worth the risk. You will get this ordered a few days after going under contract.
Once you have conditional loan approval, you should have very little left to do but wait for underwriting to finish with their end of the deal. The last bit for you to do is sign your closing disclosure docs.
Once all the agreed repairs have been completed, you've gotten your clear to close from the lender and you're ready to close, you'll have your final walk through. This is usually done the day before closing. This is to make sure the property is in the agreed condition and ready for you to take possession.
The closing is where you'll bring your writing hand. You will send a wire transfer of your total cash to close a few days prior and the closing attorney will already have the funds from the lender.
Once you've signed, you'll get the keys, shake some hands, and you're done!
Obviously there is a lot that is not included in this brief overview, but I will be here every step along the way to provide answers to any and all of your questions. If there is anything that you would like to be further explained in detail, please feel free to ask. I look forward to getting you into your new home!