Buying a home can be fun and exciting! When it’s done right, the reward is superb. The first and most important step, is understanding the simple process.
Steps to Buying Your Home
Here’s the outline of the Home Buying 8 Step Process with us:
Consultation where we discuss what type of home you want, where you want it, and your price range.
Often as a home buyers you have a lot of questions so we invite you to schedule a time to sit down, and talk about your housing needs, what you are looking for in a home, and we’ll review some items to consider to ensure a comfortable budget is set. Once this is determined, we recommend getting a pre-approval letter from a lender of your choice, if you would like recommendations, we’d be glad to assist you in finding a mortgage officer who can met your needs.
John Rice created the exclusive HOMESt.A.R.® process that allows us to work together to ensure each step of the way your goals are met and achieved.
As your buyers agent we educate you and we tour homes until we find you your new home.
In step one we outlined a lot of the factors that are important to you, now its time to go see them in person. Items to consider here are neighborhoods, home style, proximity to things that are important to you. We help you think about all of these things.
Comprehensive market analysis is done to determine the best bid for the home of your choice.
Once you’ve found a home that you think has enough of what you want (remember no home is “perfect”). We will help you determine the right amount to offer. Some items in determining this are:what the owner paid for the home, taxes, and what other homes in the area have sold for.
We write the offer together – we thoroughly review each step so you know everything we are writing.
Offers can be written to be contingent on:
- The buyer obtaining financing
- Having the property inspected by a professional inspector within 10 days of an accepted offer
- Additional items as deemed necessary
Offer is presented and negotiations begin.
After writing an offer with your interest in mind. We present the offer to the seller and their agent (if they are represented.) At this point, we might negotiate back and forth until all parties agree on price and terms. Once all parties agree on the price and terms an earnest deposit is collected to hold the property in your name. The earnest deposit will vary based on the homes price. Typically, an amount equal to 1%-2% is best but sometimes $500 is enough and other times much more is best. Plan on 1-2% and the situation will tell us if we need to adjust to anything else.
Inspections are held. If any items need attention they are brought before the seller to be taken care of.
During the inspection process, you hire a home inspector to come and inspect the home. This is a cost typically paid for by the buyer and its for your protection. The home inspector is there on your behalf to apply their knowledge to your potential purchase. They will inspect the entire structure, inside, outside, roof, basement, foundation, all items that remain with the home (test appliances and such), the electrical and plumbing systems, the roof and more – its a vary thorough inspection. Plus, you can elect for additional typical inspections like a termite inspection and/or a radon gas inspection. In Michigan I recommend both of these be done, but its your choice as buyer. A termite inspection is require if you are purchasing through FHA and some other government back loans.
The typical cost for an inspector is about $350-$400 not including termite and radon inspections (usually about $125-150 each.) Each inspector has their own set of fees and may charge more if the home is much larger than average (typically about 1800 sqft or less.)
If there is a well or septic system involved, we will typically recommend (and in some counties its required) to have the well and septic system inspected along with ensure the tanks have been pumped within the last 2 years. This is typically a seller expense and usually their agent has already prompted them to be prepared for this to come up. Regardless we write the offer to protect you here as well.
If anything comes up during the inspection that is an issue, we can negotiate this with the seller. Almost every home has something (sometimes its incredibly little) and you may decide not to take any action about correcting an issue (sometimes inspectors point out recommendations that while important may lean more toward personal preference – you can decide.) Other times issues arise that may need attention prior to proceeding, this is when we talk about our options and renegotiate with the seller. Most sellers have done their best to maintain the home in as good of condition as possible, but sometimes things get overlooked and when the inspector brings it to everyone’s attention, the seller is willing to correct it. In today’s HOT market you need weigh out the best next step
Once any potential issues have been corrected to your satisfaction, we proceed
The mortgage people begin to process the loan and we prepare for closing.
At this point we have passed inspections and we’ve let your mortgage representative know. At this point they will order the appraisal (a third party who helps the bank determine the value of the property you are purchasing.) Just like we helped you determine an offering price and walked you through a market analysis of the home, the bank hires an appraiser to do their own “market analysis.” Once the property has been determined to be valued to be equal to or greater than your mortgage amount, they will proceed. Typically, appraisals will run around $350; sometimes less, sometimes, more. Some lenders/banks will pay for the appraisal out of their “application fee.” It just depends on the bank/ledner you choose.
At this point we are usually within 2.5-3.5 weeks of closing. Sometimes FHA/VA loans can take longer (about 45 -60 days from the date we settle on an agreement with the seller.)
The closing: Congratulations you have just completed 8 steps to owning your new home!
Here we are! You’re sitting at the closing table signing all the papers everyone has told you about…..and we’re sittign here with you. Yes, we come to the closing – we’re here for every step of your home purchase. So what happens here? First off: we’re at a title agency. Title agencies act as a non-partisan third party that oversees the transaction and records it with the county and city where your property is located.
By now, you’ve already viewed the “meat” of all the documents you’re signing either through us in the purchase agreement or with your lender. Prior to sitting here at the table we’ve reviewed together the closing disclosure (otherwise known as the CD and previously known as the HUD or HUD-1 statement) which has all the final financials on it. This statements tells us to the penny, where your purchase dollars are going, including the cash you need to bring to close. This final amount is typically provided 24-48 hours prior to close (it depends on the lender and the closing office coordinating the delivery of your documents and their preparation.) You will need to bring the final amount in the form of cashiers check made out to the name of the closing office, along with your drivers license. If you are purchasing the home in more than one name (as a couple, co-signer, or other type of relationship) you will each need to be present and bring your drivers license.
Typically, by this date, the utility companies have been contacted to ensure you’re going to have electric and gas and such when you take possession of the home, and usually at the closing table you receive the keys – unless you’ve allowed the seller to stay a few extra days to pack their things after close.
After all the documents have been signed for both you and the seller (typically about 1 hour total.) Your closing is done and you are now the proud new owner of your own home!