A Home Buyers Guide
Empowering You During the Home Buying Process
1. Getting Pre-Approved for a Loan
Generally it is recommended that you get pre-qualified for a loan before you start viewing homes with the serious intention of buying. The preapproval process involves meeting with a lender and authorizing them to examine your current financial situation and credit history. On the basis of the examination the lender will provide you with a document that details how much you can borrow to buy a home.
The benefits of pre-qualification include:
You’ll have information about what you can afford which will allow you to plan accordingly
As a qualified, motivated buyer you’ll be taken more seriously when you make an offer on a home
Lenders can tell you whether you qualify for any special programs that will enable you to afford a better home (particularly if you’re a first time home buyer)
2. View Homes and Select The One
Simply put, the key to the home search process is knowing what you’re looking for. Among other things, that means distinguishing between “must-haves” and “like-to-haves”.
There are many benefits to starting the search process online with a website like realtor.com. You can view many homes and their details, take video tours and access neighborhood info. However, it’s also important to view homes in person. While their property details may seem similar online, homes can actually be very different in terms of layouts, design, workmanship and other aspects. In addition, you should ideally view homes with the help of an experienced Realtor who will notice things you might have missed, provide expert analysis and act as an impartial sounding board.
3. Make an Offer and Negotiate with the Seller
Now that you’ve found the home you’d like to buy, it’s time to make an offer. Your Realtor has a contract approved by the Tennessee Real Estate Commission where you will specify a sales price and include clauses specifying various terms of purchase, such as the closing and possession dates, your deposit amount and other conditions. I am will happy to answer all questions about the offer process should you have any.
The offer will then be presented to the seller and generally a seller will either accept your offer, reject it or counter it to initiate the negotiation process.
4. Secure Your Financing
Once you have a pending agreement, it’s time to go back to your chosen lender to finalize your mortgage details so you can close the deal. This means finalizing your down payment, interest rate, regular payment schedule and any other financial conditions associated with the closing.
5. The Home Inspection & Termite Inspection
Generally you will have 10-14 days upon binding agreement date to have the property inspected. A general home inspection is typically performed first. Should there be any items that need further inspecting, the remaining days in the inspection period, should time permit, will allow for further inspections.
When receiving a loan you must obtain a clear termite letter. I will order a termite letter on your behalf and will have the termite inspection completed at the time of the home inspection. The termite company will require payment from you the same day the letter is ordered.
6. Repair Negations
Once all inspections are completed, per the contract, you will generally have 3 days for the buyer and seller to come to an agreement based on what repairs will be completed by the seller.
7. The Appraisal
Once under contract your lender will order an appraisal on the property of interest. A professional appraiser will estimate the market value of the property on local market data and the recent sale prices of similar properties. The purpose of an appraisal is to let the bank and lender know that the loan collateral is of equal of lesser value than the said subject property. Should the mortgage default on the loan the bank wants to ensure that they can recover the money loaned through the resale of the property.
An appraisal also benefits the buyer by reassuring the buyer that the property is worth the amount they are paying. It is my goal as your Realtor to have the appraisal come in above contract price, which in turn means you are saving money and already have equity in the property when purchased
8. Closing the Deal
The finals steps of closing are sometimes referred to as “escrow” or “settlement”.
The Title Search: a historical review of all legal documents relating to the ownership of the property – ensures that there are no claims against the title of the property. It is also necessary to purchase Title Insurance in case the records contain errors or there are mistakes in the review process. Your title company will provide you with title insurance.
The Final Walk Thru: you’ll be given a chance to look at the home to make sure it is in the same, if not better, condition as when you signed the contract. If the seller made repairs, your Realtor will inspect repairs with you at this time to confirm completion.
The Settlement: On closing day you will go to a lawyer’s office to verify and sign all paperwork required to complete the transaction. The settlement will include paying your closing costs, legal fees, property adjustments and transfer taxes. At this point you will receive the property title and copies of all documentation pertaining to the purchase.