The Home Buying Process

The information in this article will help you understand what to expect when buying a home. We have put the information in a step-by-step format and have included a time frame for each step so that you can mark it in a calendar.

1. Get pre-approved. Obtain pre-approval for a home loan before beginning your home search. Before writing a contract on a home, you will need to get a letter of pre-approval from your lender specific to the home you are buying to attach to the purchasing contract. This is free. (Time frame: before you begin the home search)

2. Choose a real estate agent. This is a free service for buyers. Your agent will write the contract for you and help you negotiate with the sellers. Your agent will also be able to give you recommendations on what lender, attorney, insurance agent, and home inspector to hire. Also, your agent will help you set up appointments with the attorney, home inspector, and any contractors you may need. (Time frame: approximately 1-2 months before move-in date)

3. Find a home and write a contract. It normally takes 30 to 45 days from the time you find a home to close on it and move in. When you find the home you want, you'll write a contract. If you have a real estate agent, he or she will write the contract for you and help you negotiate with the sellers. (Time frame: approximately 30-45 days before move-in date)

4. Give earnest money. After the purchasing contract has been ratified (meaning both parties have signed and agreed to the terms of the contract), you will write a check for earnest money showing the seller you are serious about purchasing. This money will be placed in an escrow account and will be credited to the buyer at closing. The amount of earnest money is determined by the buyer and the seller. There is no standard amount. (Time frame: within 48 hours of ratifying the purchase contract)

5. Choose a lender. There are many different kinds of loans. Although you can get a 0% down loan, it is good to shop around with 2 or 3 lenders to see what loans are available and to compare rates and closing costs. Make sure to get a "good faith estimate" of closing costs from the lender before committing to the loan. If you cannot get a loan before the specified date on the contract, then you are not obligated to purchase the home, and you will get your earnest money back in full.(Time frame: as soon as the contract to purchase is written)

6. Conduct a home inspection. Choosing a home inspector is optional. You do not have to conduct a home inspection. However, it is a good idea to make sure that the home is structurally sound and that all major systems in the home are running properly. (Time frame: within about 2 weeks of ratifying the purchase contract)

7. Write a repair list. Getting the home repaired is optional. If the buyer is dissatisfied with the home inspection, the buyer's real estate agent will make a list of items for the seller to repair. These items will be negotiated in contract form between the buyer and the seller. (Time frame: within 48 hours of the last day for inspection, which is specified in the purchase contract)

8. Get home insurance. Most homes will require purchasing hazard insurance (fire and dwelling insurance). If the home is in a flood plain, flood insurance will also be required. Some condos and townhomes collect the insurance through Home Owners Association dues or Regime fees. Ask your real estate agent or your insurance company what type of insurance your home requires. (Time frame: at least 2 weeks before closing)

9. Make a final walk-thru. This walk-thru allows buyers to inspect any last minute repairs the seller has made to the property. This walk-thru is the buyer's last chance before closing to examine the condition of the property. (Time frame: a day before the closing, but sometimes the day of closing)

10. Wire funds or get a certified check for the closing. About 24 hours before the closing date, you will receive a call telling you how much money you will need to bring to the closing. You will then need to get a certified check payable to the attorney's office. If you are from out of town, you may need to wire funds to the attorney's office a day or two before closing. In this case, ask the attorney's office for wiring instructions. Bring your checkbook and driver's license to the closing with you, just in case. Total closing costs (lender's fees, attorney's fees, title company's fees, and insurance, other closing costs) will be approximately 3% of the purchase price of the home. (Time frame: approximately 24-48 hrs. before closing)

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