1. SUBMIT THE OFFER
If you're ready to make an offer, contact me immediately so that I can draft up the paperwork as soon as possible. This way, we can get your offer in front of the seller before anyone else does.
We'll talk about this more in our initial consultation, but the primary things you need to decide on with my guidance are: 1) how much you want to pay for the property 2) how much you want to ask the seller to contribute for closing costs [the fees for all the services needed to conduct a real estate transaction and typically about 2-5% of the total price of the home] 3) when you want to close and take possession of the property.
2. PREPARE TO NEGOTIATE
After we submit the offer, the seller has a standard amount of time (usually one or two days, depending on when we send it over) to respond. They might not respond at all / reject the offer, they might accept the terms outright or they might counteroffer. If a seller submits a counteroffer, it's typically due to 1) the cost of the home 2) their contribution toward closing costs 3) the date or terms of closing. Every transaction is different, so if it applies to us, we'll decide at that time how to negotiate.
3. AGREE ON TERMS
When all parties agree on the terms, the contract is now binding and we'll closely follow this series of important dates and events:
4. LOAN APPLICATION
Remember when we talked about all the loan paperwork? As soon as we have a binding contract with the seller, that's the time to complete the loan application and give your lender all of that information we discussed earlier about credit history, debts, assets and income. It's also the time to lock down those finances and not make any major financial or lifestyle changes. Don't quit your job, don't buy a new car, don't buy any appliances, furniture, TVs or gadgets etc. Time is of the essence, so be prepared and organized to provide your lender with everything they ask for ASAP.
5. DUE DILIGENCE AND INSPECTION
In our contract, we'll have negotiated for a period of "due diligence" which is typically between 7-15 (on average, 10) days during which we choose and schedule a home inspector to come to the property, conduct a thorough investigation and report back on the findings. If your home inspector going to find issues? Almost always, the answer is YES. Even brand-new homes sometimes have things that have been forgotten or overlooked, or have been broken in the time that they were built. Don't freak out about the home inspection - this is your time to look over the report, figure out what types of things to negotiate for repair or replacement and also figure out what things you can live with for a while until you're ready to fix them yourself.
When I bought my house, the roof was "nearing the end of its useful life." I thought, "I don't have the money to replace a new roof!" and despaired. I knew the sellers weren't going to drop the price or put on a new roof, but I REALLY wanted the house. So I had two roofers give their opinions during my due diligence period and they both said "end of its useful life doesn't mean it's needs to be repaired tomorrow, it just means that this is an expense you need to budget for over the next 3-4 years." So that's exactly what I did, and three years later I had a new roof put on. And you know what? My house is DEFINITELY worth a lot more now than it was 3 years ago, and the money I spent on a brand new roof that'll last me for the next 30 years is a drop in the bucket on the value I'm getting out of owning a home.
But you know what? You're not me. I was ok with anticipating that expense over 3 years. Maybe you're not. It's your house and your money and the good news about due diligence is that if you want to walk away because you don't like what you see, you can. It's business, not personal. There'll be other houses we can look at and all that means is that we'll just start the contract process over again anew. But if you're good, we'll move forward with ordering appraisals and getting details sorted out.
If you're getting a mortgage loan, your lender is going to have to appraise the property to make sure it's worth what they want to give you! They'll look at comparable properties in the immediate area and make a decision based off of those other homes. They order the appraisal, and a professional will come to the property to give his or her evaluation of the property's value. You don't need to be present for this. You'll get this lengthy report back within a few days with their valuation listed at the bottom.
7. FINALIZE THE LOAN
As we near the end of the transaction, we'll be in communication with your lender to make sure that they have everything they need to give you final approval for your loan.
You'll also want to get the rest of your down payment money by the date of closing. You'll likely receive wiring instructions or have to provide a cashier's check. I didn't think about this until two days before my closing, but at the time, I kept all of my money in an online only bank. I had never taken out large sums of money before so imagine my surprise when I learned they have a limit of one $5,000 withdrawl a day, including wire transfers. I needed $12,000 in two days. You do the math. We got it all sorted out, but check with your bank in advance to see if there are any limits.
Toward the end of the process is when you want to start getting all your utilities in place so you'll have at least power, water and gas when you move in. Also think about cable or phone service for that first day or two if you need to work from home. You'll definitely need to order a homeowner's insurance policy on your house effective the date of closing. You'll schedule movers, start packing and get ready to move into your new house!
A day or two before closing, we'll schedule a walkthrough of your new house to make sure everything we've agreed to is in order and that any required repairs have been completed.
9. CLOSING & POSSESSION
The day has come! It's time to close on your house! Depending on how complex the transaction is, closing usually takes between thirty minutes and two hours - but on average, expect to spend at least an hour at the closing attorney's office. The closing attorney's fees are part of your closing costs, because they've been working hard behind the scenes to make sure the title to the house is free of any liens or debts on the property, making sure taxes are up to date and paid, making sure the title is marketable, and doing a LOT of additional processing to ensure that everything is in order for you to take possession of your new property.
The attorney will present you and the seller with paperwork and explain in general what each means, and then ask you and the seller to sign each applicable document. It's all incredibly routine, but if you have any questions, ask! Then they'll leave the room to make copies for everyone, come back and present you with your paperwork and that's technically it. You're bought a home!
Again, every transaction is different, but typically the sellers will transfer the keys to you at the closing table and you'll be able to take possession of the property as soon as you leave. At this point in time, you can change the locks, paint the walls, and move your stuff in. It's all yours.