Steps to Homeownership
Connect with Alexis
Choose the best real estate agent to represent you in finding and purchasing your dream home and sign a Buyer Agency Agreement to work together. It is important to trust your agent, as you will be spending a lot of time together and your agent will help you with one of the biggest financial commitments you will make.
Attain Financial Pre-Approval
Get pre-approved for a loan before you find the home you want to buy.
Benefits include:
• Guaranteed price range, closing costs, and monthly payments up front
• Search within your approved budget
• Stronger negotiating power
• Shorter closing time
Analyze your Needs
After our initial discussion about your property needs and wants, I will set up a search to send you properties that fit all your criteria. I’ll also be sending you off-market and pre-market opportunities. In a competitive market, this will allow you to have a first mover advantage to some exclusive properties!
Property Price
There are three major factors when determining how much you can afford in regards to the purchase of a home:
• Qualification for the Mortgage
• Down Payment
• Closing Costs
Write an Offer
Upon discovering your dream home,
I'll conduct market research on the property to guide our offer, and we'll submit a written offer to the seller's agent.
Negotiation may ensue, and the seller may accept, reject, or counter your offer. Upon acceptance, the offer transforms into a binding legal contract.
Inspection
You'll enlist a professional home inspector to perform a comprehensive examination of the property, and together, we'll negotiate with the seller to address any required repairs. Additionally, it's advisable to retain an attorney once the contract is finalized.
Your attorney will represent your interests by verifying the absence of any property liens, ensuring clear title, and assisting in negotiating favorable contract terms on your behalf.
Negotiate Terms
Once you have found the property you want, we will write a purchase agreement. While much of the agreement is standard, there are a few areas that we can negotiate.
What you offer on a property depends on a number of factors including its condition, length of time on the market, buyer activity, and the urgency of the seller. All these data points will be provided by your agent and give you the best chance at securing your home at a price that makes sense.
Title Insurance
If you are obtaining financing to purchase the property, your lender will require that the title company issue (at your expense) a title policy insuring the validity of your lender's mortgage. This is commonly called a loan policy or mortgage policy. It insures only the lender's interest and does not take the place of the owner's policy issued to you. The commitment for mortgagee's title insurance should be sent to the lender sufficiently in advance of the closing.
Often, the seller plans on leaving major appliances in the home; however, which items stay or go is often a matter of negotiation.
Accept, Reject, Counteroffer?
By far the most common is the counteroffer. In these cases, my experience and negotiating skills become powerful in representing your best interests. When a counteroffer is presented, you and I will work together to review each specific area of it, making sure that we move forward with your goals in mind and ensuring that we negotiate the best possible price and terms on your behalf.
Earnest money may be need at the time of offer. This is typically 1% – 2% of the offer price. This check will ONLY be deposited if the offer is accepted. This amount will be applied to the down payment.
Closing day marks the end of your home-buying process and the beginning of your new life! To make sure your closing goes smoothly,
you should bring the following:
• A certified check for closing costs and down payment.
• Proof of new homeowner’s insurance policy.
• Two forms of Photo IDs.
• Social Security numbers.
• Addresses for the past 10 years.
Transfer of title moves ownership of the property from the seller to you. The two events that make this happen are:
1. Delivery of the buyer’s funds
This is the check or wire funds provided by your lender in the amount of the loan.
2. Delivery of the deed
A deed is the document that transfers ownership of real estate.
The deed names the seller and buyer, gives a legal description of the property, and contains the notarized signatures of the seller and witnesses. At the end of closing, the deed will be taken and recorded at the county clerk’s office. It will be sent to you after processing.
Lenders may require that your monthly payments range between 28 – 44% of your monthly income. The percentage will depend on the borrower’s credit rating.
Your monthly mortgage payment to the lender will consist of:
• Principal on the loan
• Interest on the loan
• Property taxes
• Homeowner’s insurance
If the home you purchase has an HOA fee, it will also be considered in your qualification.
Most home loans today require an upfront, or down payment, between 3.5 – 25%. If you are able to pay more upfront, you may be eligible for lower interest rate loans, and shorter loan periods.
Additional fees and costs associated with loan processing and closing are required to be paid at the final closing, unless you are able to include them in your financing. Typically, closing costs amount to between 2 – 5% of the purchase price.
Application and interview with a bank or other mortgage loan company. Buyer provides pertinent documentation including verification of employment. Credit report is requested.
Loan application is then is submitted to underwriter for approval. Parties are notified of approval and loan documents are completed and sent to title. Title exam, insurance and title survey conducted. Borrowers come in for final signatures.
