10 EASY STEPS TO HOME BUYING.

1. Contact at least two (maybe three) lenders of your choice. Ask to be pre-qualified and give them the info needed. Then give them a particular set of circumstances (ie: price of the home, amount of down payment you expect to make, who is to pay closing cost. Give all lenders the same info) and ask for a “Good Faith Estimate” to be sent to you. This will tell you what kind of closing cost you can expect, what your payments will be, what interest they are charging, etc. and will give you something to compare them. Remember, you are doing them a favor, they are not doing you a favor. See who can give you the best deal, then ask for formal approval with the lender of your choice. This will get you pre-approved and give you a better bargaining position with the seller of the home of your choice.

2. Contact several Real Estate agents and talk with them about what you are looking for in a home. Ask if they operate as “Buyers Agents”. This cost you nothing and gets you the representation you deserve. If they want to show you homes they have listed, do not sign a Buyer Agency contract with them, since they are already under contract to represent the seller and therefore cannot represent you correctly. (it’s called dual agency and as you can see, they cannot represent both the buyers and sellers interest. The seller is going to win). This should be done at the same time as you are working with the lenders. Find an agent you are comfortable with and sign an agency contract.

3. You can be looking at homes while above is in process. As soon as you are approved and have made your choice of lenders, you can get serious about offering a contract to the seller of any home you like. Your agent will help you with an offer price, closing cost, warranties, needed repairs, condition of home, location of home, closing date, etc. Negotiate a price that is agreeable with you and your situation and get the home under contract.

4. You will now have approximately 5 days to make formal application with your chosen lender to purchase the home you have selected. A copy of the contract will be sent to your lender.

5. The next thing is to get the home inspected by a good home inspector (your agent should be able to supply you with names of qualified inspectors). You should attend the inspection and see first hand what is found. Inspection will cost $275- $400 and you will have to pay for this out of pocket. Inspections are not required, but it is something you really should have done, in my opinion. You will then have a period of time to negotiate any needed repairs with the seller.

6. About a week before closing, the lender will order an appraisal of the property (which you may have to pay for out of pocket, $200-$400).

7. About a week prior to closing you will need to contact an insurance agent, of your choice, about “Home Owners” insurance. When you have picked an agent, ask them to supply you with a “Declarations Page” stating the insurance coverage and the policy period, and a bill for the policy. Notify your Real Estate agent of the chosen company and the amount of the premium. He/She will report this info to the closing attorney so they can figure the escrow amount for the HUD-1. Bring both documents to closing with you.

8. By now an attorney will have been chosen to close the loan. The attorney will order a title search a few days prior to closing to be sure you get a clear title to the property.

9. The day before closing the attorney will furnish what is called a HUD-1 statement to both parties. This explains, in legal terms, all the numbers associated with the sale. This gives the buyer the amount of money he will need to bring to closing to complete the sale. This amount must be in the form of a cashier’s check made out to the buyer. At closing, the buyer will endorse the cashier’s check, and give it to the attorney representing the lender. Any differences in the amount of money brought and the actual amount needed will be taken care of by personal check between the parties.

10. If all goes according to expectations, you will walk away, after about an hour of signing your name, with ownership of your new home.

This is a quick explanation, and many things can, and probably will, transpire during the process, but you agent should be able to handle and explain anything that comes up.