Home Buying Process

What You Need to Know

If you’re ready to own a home, the first thing you need to determine is how much you can afford to spend. Generally, your mortgage payment should not exceed 35 percent of your monthly gross income. Other factors will also affect how much house you can afford to buy, like your down payment and mortgage terms, but these factors will be specific to your circumstances. 

Get started by creating your Wish List.  This is a list of your must-haves and nice-to-haves. Creating this in advance and bringing this with you during your search will help you remain focused on your goals and save you time.

Get Pre-Approved for a Mortgage

Once you’re ready to buy a home, it’s essential that you first get pre-approved for a mortgage loan. Going through the pre-approval process means your lender has reviewed your financial status by verifying your income and debt status. Once you’ve completed the pre-approval process, your lender will be able to tell you with confidence just how much house you can afford to buy based on the loan amount for which you qualify. Don’t confuse the pre-approval process with a pre-qualification, which will simply ballpark how much you can you afford to spend based on unverified income and debt estimates. Click here to get the pre-approval process started with our lender partner, Vitek.

How to Determine Your Offer Price and Terms

Everyone wants the best possible deal when purchasing a home. However it’s not always easy determining how much to offer, especially in the face of constantly changing market conditions. Your Realtor can help you craft a reasonable offer because he or she lives and breathes real estate and knows what it will take to get your offer accepted.  In addition to sticking to your budget, your Realtor will review a range of factors including the number of for-sale homes competing for your offer, the terms sellers look for in a clean offer, and any additional terms that are likely to appeal to a specific seller. Whether the market favors buyers or sellers, there will always be comparable market data and fluctuating contractual terms that your Realtor will be able to analyze in order to help you craft and submit the winning offer!

Submitting an Offer

A real estate purchase offer is a legally binding contract that a homebuyer uses to make an offer on a property. It is a document that contains information about the purchase transaction and the homebuyer’s rights and obligations. The primary elements of the purchase offer include the offer price, down payment, earnest money deposit, and contractual dates that stipulate when the transaction will close and how many days the buyer has to meet certain conditions including the property inspection, appraisal and loan periods. Within the purchase offer, you will also commit to various additional details including escrow costs, real estate transfer taxes and if any local point of sale ordinances will be paid. Once you make an offer to the seller’s agent, you may need to negotiate counter offers to reach final agreement.

The Closing Process

Once your offer has been accepted and your inspections completed, you will need to attend the closing, or settlement. The closing is the legal transfer of ownership from the seller to you. The title or escrow officer will prepare the HUD-1 Settlement Statement, which outlines all of the costs for both the buyer and the seller. You should schedule a walk-through of the home 24 hours prior to closing to ensure that any agreed-to repairs have been made and that the home is in the condition outlined in the contract. If the property does not meet the agreed-to terms, you can delay the closing or request money from the seller to fix any issues.

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