The Buying Process

The Home Buying Process

1)      Counseling/Qualifying Interview

• Usually done by the loan officer or lender (sometimes the realtor).
  • How much home can you afford?
    • W2’s for the past 2 years
    • Employment verification
    • Credit pulled
    • 2 months of bank statements
    • Assets verification (401k’s, Roth IRA’s, Stocks….)

2)      Home Selection

• The search for homes matching your criteria begins
  • Price range
  • Size
  • Location…

3)      Viewing Homes and Communities

• This is the fun part where you look at the homes matching your criteria

4)      Negotiation Strategy Discussion

• We discuss the technique we will use to achieve your goal

5)      Writing the Offer

6)      Sellers Notified

7)      Negotiate the Offer

• There may be an acceptance of offer, a rejection or a counter offer (A counter offer is when the seller requests something to be changed with the original offer, it could be the price and/or terms)

8)      Offer Accepted

• Earnest money given to title company or escrow company

9)       Contingencies, Reports and Inspections

• If the purchase is contingent on the sale of another property then until that happens the contingency gives a way out (if the other property doesn’t sell for example and the buyer doesn’t have the money without that, then obviously the deal is dead and the buyer gets their deposit back because of the contingency) A contract is usually contingent on the buyer getting a loan, if the buyer tries and can’t get qualified then the contingency will allow the buyer to get his/her deposit back.

10)  Mortgage

• Credit pulled again (Extremely important not to buy anything on credit or miss any payments between the time you were initially qualified until now)
• Appraisal (The bank will verify that the home you are purchasing is worth what you are paying for it or more, if less then you have to come up with the deficiency amount)

11)  Underwriting/Loan Approval

• This is when the specialist at the bank puts everything together and this is when they either approve you or deny you.

12)  Inspections

• Inspections can be done at any period after the offer is accepted and the contract will state a time frame when these can be done. I recommend not doing inspections until you are fairly confident that you will get the financing and all contingencies have been met, however the time frames don’t always allow for all of those things to happen first. (If you do the inspection and then the loan gets denied or another contingency doesn’t get satisfied then you are out the cost of the inspection)
• After the inspections there is a period for additional negotiations or repairs to be done. The buyer can reject the property, ask for repairs or ask for a price reduction. The seller can agree to repairs, agree to a price reduction, both or reject any of these and run the risk of losing the buyer)

13)  Title Company

• Prepares closing documents
• Estoppel letters (Pay offs from mortgages, associations….)
• Performs title search to ensure the title is clean and “Marketable”
• Title insurance issued (A warranty against defects in the title)

14)  Deed Preparation by Title company

15)  Closing Day

• Signing of closing papers (I will be with you to make sure it’s how it should be)

16)  Moving Day!! WOHOOO!!

By Eric Chavarria, CRS, SFR

Future Home Realty