STEPS IN THE BUYING PROCESS
Working with a knowledgeable and professional real estate agent can help make the home buying process a memorable and enjoyable experience.
- The first step in buying a home, and before you start your home search, is financing. It`s important to assess your financial situation and, when possible, get pre-approved from a lender. Determining how much you can afford before you begin your home search will save you valuable time.
- Pre-qualification vs. Pre-approval
- Pre-qualifying for a mortgage generally helps you determine how much house you can afford. Becoming pre-qualified does not necessarily mean that you will be approved for a loan of that amount.
- Pre-approval from your lender means that you have provided them with the necessary paperwork, and they have approved your actual loan amount. Having pre-approval for a home loan will put you in a much better negotiating position, because the seller knows that you are able to obtain your loan to purchase their home.
- Down Payment
- Most lenders require a 5 to 20 percent down payment; or as low as 3.5% for an FHA loan.
- If you cannot put at least 20 percent down, you will likely be required to purchase Private Mortgage Insurance (PMI) and perhaps pay a higher interest rate.
- If you have no funds available for a down payment, there are some “down payment assistance” programs with 100% financing you may qualify for. Contact me for more information.
- I can refer you to a financial institution that will help you create a plan that fits your needs.
The Purchase and Sale Agreement
- Once you`ve found a house that fits your needs, I will compile the appropriate legal forms, contracts and addendums to make a solid offer on the property.
- When we write the offer on the home you’ve chosen, you will be expected to include an earnest money deposit. The deposit is a sign of your good faith that you are seriously interested in buying the home. The amount of the deposit is negotiable, but typically between 1-3% of the purchase price. Once the buyer and seller have a mutually accepted offer, the earnest money is deposited with the escrow company. That deposit becomes a credit to the buyer and becomes part of the purchase expenses, ie..down payment and closing costs.
- I will help you put together an attractive offer package that takes into account the market value and condition of the house, your financing terms and earnest money. I will then submit your offer to the listing agent for the home you have chosen, and negotiate on your behalf to obtain an acceptable offer to all parties.
- Once the offer is accepted and a closing date is agreed upon, I will coordinate the completion and submission of all necessary forms to the escrow company and monitor the escrow process until the transaction is complete.