Do You Know the Way?
It may be natural for first-time buyers to be unsure of the process of buying a home because they haven’t been through it before but even repeat buyers need to know changes that have taken place since the financial housing crisis.
The steps in the home buying process are predictable and generally follow the same pattern. It certainly makes the move stay on schedule when you know all the different things that must be done to get to the closing.
- In the initial interview with your real estate professional, you share the things you want and need in a home, discuss available financing and learn how your agent can represent you in the transaction.
- The pre-approval step is essential for anyone using a mortgage to purchase a home to assure that they’re looking at the right price of homes and so they’ll know what they can qualify for and what the interest will be.
- Even with lower than normal inventory, it is difficult to stay up-to-date with the homes currently for sale and the new one just coming on the market. Technology has simplified this process, but the buyer needs to implement them. Typically, your Realtor will start a search based on the criteria you indicated was important. Likewise, buyers typically establish online searches. We recommend you share any listings you find interesting with your Realtor so your Realtor can fine tune their search based on your changing desires.
- Your real estate professional can work with you to see all the homes on the market regardless of whether they are listed by real estate brokers, offered by builders or for sale by owners.
- When a home has been identified, an offer is written and the negotiations over price, condition and terms takes place.
- A contract drafted by your Realtor is a fully negotiated, written agreement.
- Escrow is opened to deposit the earnest money from the buyer as a sign they are acting in good faith. Earnest money may also represent liquidating damages paid to the seller in the event the buyer is in default of a term of the contract. A title search is also started so that clear title can be conveyed from the seller to the buyer and that the lender will have a valid lien on the property.
- 88% of home sales involve a mortgage. The lender will require an appraisal to be sure that the home can serve as partial collateral for the loan. If the buyer has been pre-approved, the verifications will be updated to be certain that they’re still valid and that they buyer still qualifies for the loan. The entire loan package when completed, is sent to underwriting for final approval.
- When the contract is completed, at the same time the title search and mortgage approval is being worked on, the buyer and buyer’s Realtor will arrange for any inspections that were called for in the contract.
- After all contingencies have been completed, the transaction goes to settlement where all of the necessary papers (loan documents) are signed, and the balance of the buyer’s money is paid.
- Title transfers from the seller to the buyer on the date of closing that is specified in the sales contract.
- Possession occurs according to the terms of the sales contract and may or may not be on the same day as closing.
One of the responsibilities of your real estate professional is to make sure that things are done in a timely manner so that the transaction will close according to the agreement on time and without unforeseen or unnecessary problems.
Even if you’re not ready to buy or start looking yet, you need to be assembling your team of professionals. Let us know and we’ll send you our recommendations, so you can read about them on their websites.
If you have any questions, call us at (206) 979-9632; we’re happy to help. Informed buyers lead to satisfied homeowners and that is better for everyone involved.