Many people have been earning, saving, and searching to buy their dream home. Once you have your resources ready you’re only a few steps away from actually buying a home. Just follow the steps I’ve prepared below to get the house you want, hassle-free.
The very first step in buying a home of your choice is to get the pre-approval letter. You need to first know your credit report and fix any unlikable marks that may hinder or slow down the pre-approval process. Once done, find yourself a lender. This is fairly easy to do, if you have friends or family members who have already experienced a similar situation, they can recommend someone they know.
If that doesn’t apply to you, then the nearest bank should be good to consult. Then get a pre-approval letter on a letterhead and have it sent to your real estate agent.
2. Search Criteria
Second is defining your criteria for buying a home. Use the four categories below to make finding your dream home an easier task.
• Location – Schools, transportation, crime rate and employment opportunities. This is what drives the stability of your chosen long-term investment.
• Lot – Orientation to Sun which brings natural light, melts snow; flat or sloped; backs to open space or have views.
• Layout – the number of rooms- bathrooms and bedrooms, loft, main floor full bath, high ceilings, kitchen location
• Looks – flooring, the age of the property, roof, doors, fixtures, appliances and the likes. These traditionally fall under “looks” category and if they are more important to you then I’d suggest you may find a home with a newer build.
After that, set up your alert on MLS then proceed to schedule the showings. Inform your chosen agent about the properties you shortlisted. He’ll help you in scheduling a visit to your shortlisted homes.
3. Contracts and Disclosures
Upon seeing the property, you can now make your offer then proceed to sign the following contracts.
• Exclusive Right to Buy Listing
• Contract to Buy and Sell Real Estate
• Brokerage Disclosure to Buyer
Your agent needs to receive an email along with the earnest money check. The agent will be the one to send this offer to the listing agent. Sign the counter-proposal if needed.
The following disclosures have to be signed after the contracts:
• Source of Water
• Seller Property Disclosure
• Closing Instructions
• Square footage Disclosure
• Lead-Based Paint Disclosure, if the home is built before 1979
After finishing the disclosures, have the earnest money check submitted at Title Company. Get the receipt and send it to your agent via e-mail. This is for documentation purposes and to keep a record or archive.
Here we have the fourth step; inspecting your chosen home. Referrals by friends and family are one of the best ways to find an inspector while it’s also good to do your own research. Schedule the inspection immediately after choosing your inspector.
Decide if you’ll want add-on services. Review the inspection report as soon as you receive it. List down the issues you want to be addressed for the inspection objection. If an agreement has been made the seller then there would be no problem signing the inspection resolution next. A Notice to Terminate and Earnest Money Release forms will be prepared instead if events turn out otherwise.
5. Loan Process
Meeting the deadlines as they are indicated in the contract is important. This also means that the loan applications and other documents that are deemed required should be submitted in a timely manner as well. These documents are – most recent pay stubs, bank statements, tax returns and past two years of W2’s. If applicable, send your immigration status.
6. Homeowner’s Insurance
Get referrals from the people you trust and compare the insurance quotes. Once you’ve chosen your insurance agent, email them to your lender and don’t forget to have the declarations page saved.
7. The title, Appraisal and CIC documents Review
Make sure you review the title commitment thoroughly. If you happen to have questions don’t hesitate to reach out to either your agent or the escrow officer. It should also state that there are clearly no easements limiting your full enjoyment of the property.
Review the appraisal report to make sure that the house’s value is above or at least equal to price as indicated in the contract. If not, you can either choose to re-negotiate or terminate the contract altogether.
Even though reviewing documents may take quite some time and can be quite boring (I know it is, we’re just humans after all). However, failing to review them may affect your stay in your cozy home. One example is if you are allowed to park an RV in front of your property or not.
Walk through the home to make sure that all the inspection resolution items had been addressed. Secure receipts and proof of transactions for everything that took place. Review the HUD from the lender before finally closing the deal. Ensure the loan terms weren’t altered from the initial good faith estimate.
Take your driver’s license when attending the closing. Once at the closing, gather the keys, garage door remote and trash pick-up schedule. Also get the mailbox number and location and before leaving, request for a signed copy of the documents in paper and a scanned copy as well.
9. Final Steps
Here is where you’ll definitely feel the ownership when buying a home. Have all the locks changed and have all the utilities transferred to your name. After successfully moving, add this as your current address to inform your service providers.