So, you found your perfect home, now what? You fell in love with a home and now you’re thinking oh my gosh what do I do next? I haven’t thought past this point...
I’m going to explain the home buying process in 5 steps.
Dowload my free guide at the bottom of the page!
#1 Earnest Money
Before we submit the offer to the seller's agent, we need to determine the amount of earnest money you will be giving, which is typically 1% of the offer price. Earnest money is a check that signifies to the seller that you are an interested and serious buyer. The earnest money check needs to be delivered to the listing office typically within 3 days after an offer has been accepted depending on what you agreed upon in your contract. That check does get cashed, so make sure you do have the funds available in your account! The amount does get credited back to you at closing. It is very important to have the money delivered by the date stated in the contract since it could be considered breach of contract if it does not.
In the presented offer we will also have to include what type of financing you will have, such as Conventional, FHA, VA, what the approximate interest rate will be, how much money you're putting down, and the term of the loan. This is why it’s important to have a mortgage pre-approval before you start searching for a home. You will also have to include a date by when you would like to close. Since most mortgage approval processes take at least 30 days, a common closing is between 30-60 days from the offer acceptance. You will also need to have the loan application and loan process started within 10 business days of the offer acceptance. If you want to learn more about different types of financing you can click on the link above and that will take you to my other video where I explain that.
#3 Attorney Review and Inspection
From the date the offer is accepted by the seller, the buyer now has 5 business days for an attorney to review the contract and to have an inspection performed on the property. After that, we have 10 business days to negotiate on any finding during the home inspection. You will also need to obtain a home insurance quote within 10 business days.As you can see the first 10 days are going to be quite busy, but when you're working with a great realtor, attorney, and lender it really makes this process go very smooth.
#4 Next steps
Next, there is one more important piece, the appraisal. Your lender will order an appraisal on the home you're purchasing because they want to make sure the home is worth what you are paying for it.
#5 Closing fees
This is the amount of funding that you will need to have available at closing. A large amount of that will be for the home’s title fees and lender fees. The various title fees can add up to approximately $2800, however, lender fees vary quite largely from lender to lender depending on the mortgage structure. Some will charge points, others will just have higher processing fees and others could charge the processing fee upfront. The attorney fee due at closing varies from $400-$500. One of the most common upfront fees that you will be paying before closing is to your home inspector which can vary with the size of the home and ranges from $400-$700 based on that.
I know there are a lot of dates and steps to keep track of, so I've included a link where you can download my free date tracker.