Want to buy a home, but not sure where to start?
Here are 7 milestones you can expect on the home-buying journey!
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1. Find a REALTOR®
Your REALTOR® is an experienced agent who facilitates your purchase of a new home and can guide you through each step of the buying process, from start to finish. Talk to us about what we do and the services we offer at Empire Realty.
2. Find a Lender
You’ll be working with your Lender from start to finish, so shop around and find one that offers a loan that meets your needs and who comes well recommended. At a loss who to use? Don’t hesitate to ask your REALTOR® for options. Through experience with other purchases, Realtors may know lenders who are professional, communicative, and helpful.
3. Get Pre-Qualified.
How much can you afford?
Your lender will give you a ballpark estimate of how much you can borrow for your mortgage to buy your home. This is called getting pre-qualified. Getting pre-qualified will help you streamline your options as you shop for a home.
Now that you have an idea of your budget, put together a list of your needs and wants, such as home type (condo or single family home?), location (close to school? work? beach?), and layout (how many bedrooms? yard for pets?). Take this list to your friendly Empire Realty agent and get started looking for your dream home!
5. Make an offer
You’ve found the home you want! Now you need to make an offer. You’ll work with us to hammer out the details of a purchasing contract that we will submit to the Seller. The Seller may accept our offer, reject it, or make a counter proposal for your consideration.
We will work with you every step of the way to ensure your interests are reflected in the contract and in any negotiations that may take place.
Once you and the Seller agree on the terms of the contract, the Seller will accept the offer by signing it. Congratulations! You’ve agreed on a price, on terms and conditions, and the rest is follow-through.
6. Follow-Through: From Acceptance to Close
The time period from acceptance of the offer until you take possession of the home could be called Contract Fulfillment. The contract between you and the Seller will require several things from both sides, including depositing money in escrow, doing inspections, and submitting various reports and paperwork. A good REALTOR® will continue to guide you through this time, ensuring that deadlines are met and that your purchase moves forward. Below are descriptions of some of the most common things that you can expect to do as a Buyer during this time period.
A. Depositing Earnest Money and Opening Escrow
Earnest money is an amount specified in the contract paid by you that signifies your good faith to buy the home. You pay this money almost immediately after your offer is accepted. The money is held in escrow. Escrow could be described as neutral ground. It is a third party that confirms to both the Buyer (you) and the Seller that the conditions and terms of the contract are being fulfilled. Money held in escrow is paid to the Seller at the close of the deal when the property is finally, officially transferred to you.
B. Finalizing Your Mortgage
During this time you will work with your Lender to finalize your loan. You will submit financial documents and information about the property to the Lender.
It may seem backwards, but your Lender actually needs a copy of your signed contract in order to write and process your loan. You would think that you’d show up with the money and then the Seller would agree to sell you his or her property, but in practice the agreement is made first, and then the mortgage is written approved by your Lender. That is why pre-qualifications and pre-approvals are required. Because Sellers are not getting money until close, and because they must take their home off the market once they agree to sell it to a Buyer, they need proof that Buyers can afford their property.
The Lender may want an Appraisal of the home. (Sometimes appraisals are required, as in the case with a VA loan.) The Appraisal is an independent verification of the value of the home, ordered by the Lender and paid for by you, the Buyer. A home may appraise at the same price you agreed to pay, or it may appraise above or below that price. Sometimes contracts have to be renegotiated if the home appraises below the price agreed upon in the contract. Again, your REALTOR® will help you should this occur.
Inspections are separate from and independent of the Appraisal. While appraisals take many things into consideration, including market values and the condition of the neighborhood, inspections determine the condition of the home. Is the wiring good? Does the roof leak? Is the plumbing sound? All this is determined by inspections. Unless otherwise stipulated in the contract, inspections are generally ordered and paid for by you, the Buyer.
D. Purchase Title Insurance and Homeowners Insurance
The title to a home is the proof that the home belongs to the Seller, and subsequently, to you. You would hate to buy a home and then find out that legally it belonged to someone else! A title company will research the history of the home and ensure the property belongs to the right people. A title insurance company will also verify that the property is free from legal claims and liens against it. Title insurance is required, and you’ll need to purchase it for protection in case there is ever any dispute over the proper ownership of your home.
Your Lender will also require you to purchase homeowners insurance to minimize loss in the event your home is damaged or destroyed.
7. Get Your Keys!
You made it! It’s time to Close!
Closing on a home completes the sale.
You’ll do a final walk-through days or hours before close. This enables you to make certain the property is in the condition in which you agreed to buy it—that any negotiated repairs have been made and that nothing has happened to the house since you last saw it.
Your Lender will disburse the funds to the Seller, and you’ll sign a variety of documents to execute the loan and take ownership of the home.
Now you just have to unload your furniture, go grocery shopping, install your internet and cable services, buy trash bags and laundry detergent, and make sure the kids don’t break anything!
Congratulations and welcome home!