But... What all does that actually involve???
Once you are ready to officially start the process, you will want to find a real estate agent, or plan to right after being pre-approved. (real estate agents can help you find Mortgage Lenders to speak with, if you do not know where to start) Then, you can start the process as soon as possible, and work with someone you trust from the get go!
It lets all parties involved (Your buyer's agent, the sellers of the homes you're interested in, and seller's agent) know that you are serious.
You will also find out what type of financing you will be doing, what price range to look in, what to expect your monthly payment to be, and what type of home (since some loans are more strict on condition than others).
It also avoids wasting time. You do not want to go look at 10 homes, just to find out you are not ready to buy for 6 months. Or maybe you can afford more than you thought, and you wasted 2 weeks looking at cheaper homes...that you did not really want.
When your lender gets sends your pre-approval letter, we will then work together to find the home that fits your needed criteria!
Then you find the one!!!!!
Step 3: Offer
We make the seller an offer contingent on your financing, home inspection, and appraisal. You will be expected to put down earnest money. $500 is typical in this area, for a starter home price range. Earnest money is money you put down in good faith. It is an effort to show you are ready, willing, and able to buy. The money will be deposited immediately following an accepted contract.
*There is more to earnest money. Feel free to contact me any time, with questions*
Step 4: Negotiations
We, of course, try to get you the best possible deal! Ideally, at the end of negotiations, we will have an accepted contract!
Closing date is typically set 30 to 45 days out from the offer date.
One thing to keep in mind when we get to negotiations, you will have closing costs to cover. Usually between 4,500-$7,000. If you do not want to pay this out of pocket, you can ask the seller to cover it. This of course cuts into sellers' profit and means your offer may have to be a little stronger to cover that closing cost. This is very normal practice, as many folks do not have an extra 5k+ laying around when buying a home. Especially if they are doing a large down payment. Just something to consider when thinking about making an offer on a home.
*As soon as we get an accepted contract I send your contract to your lender.
I will also send the contract to a local title company to do the title search and prepare the deed and host the closing.*
Step 5: Inspection
You will have a designated inspection period, in which you can do any and all inspections. Usually 10-12 days long. Within this timeline, you can do any and all inspections. Inspection is not required, but highly suggested.
A general home inspection costs between $300 and $400.
If the inspection shows issues with the house, you can ask for repairs, re-negotiate price, or possibly back out if you are uncomfortable with the findings and have a legitimate reason to be.
***You cannot just back out any old time after the inspection period is over. You need to be confident with moving forward after your inspection period***
Step 6: Appraisal
Once we are past the inspection period, and your lender is ready to move forward, your loan officer/lender will order the appraisal. Lender's usually require you to either pay for the appraisal upfront, or have a credit card on file. (cost is usually between $500-600) Appraisals are very important. The appraiser is looking mostly at value, but a little at condition too. If he/she notes repairs to be done, then those repairs will have to be done to close.
Once the appraisal comes in, your loan will be sent to underwriting by your loan officer/lender.
Then we get the words....CLEAR TO CLOSE!
Step 7: Final Walkthrough
We will do our final walkthrough within 3 days of closing. We do this to look over any repairs ( if any were requested), and to make sure the house is still in just as good of condition as it was when you made your offer.
Step 8: Closing day!
This is the day that funds are exchanged and papers are signed. The house will become yours this day!
This gives you a fairly quick overview of how the process will work. If you have any questions at all, please feel free to text, call, or email me!
Keep in mind that any numbers on pricing are based on "the norm" in Monroe County TN and surrounding areas.
This is also written for new or first time home buyer's and how a typical transaction will flow.
Thanks!
