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The Buying Process
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For most people, buying a home is one of the biggest, and perhaps most
important financial decisions of their lifetime. It can be an overwhelming and stressful process,
especially for first-time buyers. By using our online resources, you can
avoid the pitfalls many home buyers encounter.
The steps listed below are designed to help you understand the buying process.
Familiarizing yourself with these will ease the fear and
nervousness of purchasing a home. Along the way, Solution Realty will be there
to help you.
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- Find a qualified buyer agent
- Identify your favorite property
- Get pre-approval letter
- Decision on making an offer
- Submit the buying contract
- Home Inspection
- Contact your mortgage company
- The underwriting process
- Obtain the final approval of the loan
- Arrange the closing
- Get ready for the closing
- Final walk through
- The closing process
- Possession of your new home
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Find a qualified buyer agent
Home buying is a complex undertaking. Be sure to retain the services of a
qualified Realtor. Don't be afraid to ask questions during the interview. A great agent
should have these traits: honesty, confidence and friendliness; most importantly, they
must be great communicators and negotiators.
You can trust our Realtors to always keep your interests first and foremost. As qualified
professionals, they’ll guide you through the entire home buying experience and help you
become an informed buyer. Click here
for a list of our licensed professional Realtors.
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Identify your favorite property
It can save you time and energy to identify what your needs and wants are before you
run out looking for houses: put together a list for "must-haves", "nice-to-have" and
"do-not-like". It helps to narrow down the property search and maximize efficiency for both
you and your agent.
Examples of "must-haves" are number of bedrooms and bathrooms, garage size, minimum
square footage, neighborhood and school district, maximum driving distance to work,
and anything you feel is a must. "Nice-to-haves" could include a certain style
or floor plan of the home, deck, walk-in closet, walk-out basement and any features
you may like if you can afford them.
Finally, don't forget to identify things you don't want. Such as a home with
structural defects, safety concerns, or next to a highway.
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Get pre-approval letter
Money matters. Get a credit report and get your finances in order. Get your pre-approval
letter BEFORE you make an offer. An experienced Realtor should tell you about this process.
People are savvier today than they used to be about home buying. A knowledgable seller or seller agent won't
consider your offer "valid" until you attach a pre-approval letter from a lender
or mortgage broker confirming that you can afford the house. It is considered
a standard "supporting" document in the offer screening process, especially when there
are other offers waiting in line.
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Decision on making an offer
Now you have found the home that is perfect for you. Everything looks good. The
location is great. The layout is ideal, and the square footage is more than adequate.
There's a built-in spa on the back deck and a charming chandelier on the dinning room
ceiling. After three months of searching, you are ready to make an offer, and you
want to do it now, before another offer comes in.
Well, you still have a lot to things to think about so take a deep breath and slow
down. Some key things include the price you want to offer, amount of the earnest money,
amount for the down payment, and the type and the amount of the mortgage. Make sure
you've gone over the Seller's Disclosures document. What are the items in the house
you want to keep or remove? Ask your agent if you are not sure.
In some situations you can have your Realtor present an oral offer first, just to
get a feeling of the seller's bottom line.
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Submit the buying contract
Here comes the fun part: the paper work. First, you need to use the correct forms.
Every brokerage firm your agent associated with has forms available for use.
The first thing you are looking for is the home buying contact, or "Purchase Agreement"
(referred to as "PA" by Realtors). This is a legal binding document of an offer on a property.
Along with the PA, there are a few other important documents such as the Inspection
Contingency and Financial Contingency. Those are designed to protect you as the
consumer. Your agent should be able to explain these to you.
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Home Inspection
Although it's optional and requires extra expense for a home inspection, we always
recommend our buyers to have the home inspection done. Imagine moving in to the home
and find out that the water heater isn't working, the wiring of the home is
hazardous, or the roof is leaking.
A house may have many number of problems that can be revealed in an
inspection. Knowing about such problems in advance gives you the opportunity
to negotiate with the seller to get them fixed, or to lower the selling price.
If there are problems you don't want to deal with, you can sign a cancellation.
So whom should you hire to do the job? Experienced inspectors have seen numerous houses
and have developed a thorough checklist. They know what to look for, including all the
quick-fix techniques. We maintain a list of inspectors we worked in the past in case
you don't know who to call.
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Contact your mortgage company
The inspection contingency has been removed. Both parties have signed the final agreement.
You have shopped around and found the specific mortgage loan that has the best rate and terms
for you.
So it's time to get in touch with your mortgage broker or lender. You will need to fill
out the loan application, and they will ask you or your agent to send them a complete
copy of the Purchase Agreement including any addendums. There might be other documents they
need you to submit depending on the lender or mortgage firm. This will kick off the
mortgage approval process.
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The underwriting process
If the appraised value of the home reflects its market value, your mortgage broker/lender
will send your application to the underwriting department of the financial institute.
During this process, your lender may ask you to submit additional evidence of your
financial status as you claimed on your application.
During the underwriting process, you should avoid making a major purchase or switching jobs.
Lenders usually don't like to see that.
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Obtain the final approval of the loan
You have met all of the requirements for obtaining the specific loan.
The underwriter has confirmed it with your mortgage rep. You have officially received
the final approval of the loan. Congratulations!
Remember, until the closing transaction is over, it is better to avoid
making any changes in your employment or financial status.
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Arrange the closing
You are almost there. Should you now sit back, relax and just wait
for the closing date to arrive? No.
In reality, your agent, mortgage broker and the closer from the title company
often start to communicate with each other about the time your mortgage
application is submitted, especially when you have a short timeframe for
the closing. As the closing date approaches, everyone involved should check
the process on a daily basis. Staying on top of things means if there is a
problem, it can be caught and dealt with as early as possible. Keep yourself
in the loop.
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Get ready for the closing
Most problems during the home buying process have been cleared up. What else can
you do?
One thing you can do is to sit down with your agent or mortgage broker to go
through the HUD-1 settlement document together. Ask questions if you see things
you didn't expect, or you don't understand why it is charged the way it is.
Your agent might have seen these thousands of times, so he/she may be
able to tell you if a different title company would charge a service
fee lower than what you are seeing. You can have your agent ask if the
title company could make a match. They often will because most firms want
you to be satisfied and spread their name via word-of-mouth advertising.
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Final walk through
The final walk through inspection is an important step prior to the closing.
You don't want surprises after you move in. Make sure they have fixed all the
problems they promised to do. The matching windows treatment is still there,
and the wine-fridge in the basement stays.
The final walk-through is not the time to do a home inspection. It's simply
an opportunity to make sure that the home you are buying is the one
you agreed to buy.
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The closing process
At least one week prior to the closing, the title company will send you a letter
listing everything you need to bring to the closing table. Your dirver's license,
a cashier's check/money order for estimated down payment and closing cost,
and maybe a personal check to make up the difference between estimated and actual
cost. The date and time of the closing, and the address of the title company will
also be included.
Every closing can be different depending on the situation. You may encounter
issues specific to your transaction. Your agent, mortgage broker, closer or other
parties involved in the transaction are there to help you complete
the transaction.
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Possession of your new home
Finally, you can celebrate. It's time to plan your house-warming party!
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