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The Home Buying Process

The Home Buying Process

Buying a home for the first time is exciting and can seem to be somewhat of a challenge. There are many overlapping things going on, with so many people involved. It’s all too easy to get confused about what to do next in the process. This article will explain how it works.

1. Getting Yourself Pre-Approved for a Loan

Get yourself preapproved for a loan. This will involve completing paperwork about your financial status. When you complete that process, you will know how much money you have to spend for the purchase.

2. Getting Your Desires Clear

Early in the process, start looking at actual homes for sale. It is good to start looking already knowing what you really want. You can define your ideas methodically, by making a comprehensive list. It’s important that you know exactly what you want.

3. Identify Home

When You find what you’re looking for, you’ll know it. The right home might be the very first one you see or the nineteenth.

4. Making the Offer

Before you make a formal offer, do the right homework. Learn what price houses in the area have sold for. Make a fair offer — if it is too little you might alienate them, or too much and you would be stuck paying more than you should. Normally, when you make an offer, you will probably need to put up anywhere from 1% to 5% of the asking price in earnest money. The offer should cover terms and contingencies in addition to the price, such as being subject to inspection and your desired date of closing.

5. Agreement

After a little negotiation, the seller and you will agree to the details of the deal.

6. Review of Title

A title review, in most states, is normally done by an attorney who examines the title and gives a formal opinion as to whether the seller’s ownership is clear and meets the contract to which you have agreed. In some states this is done without involving an attorney but in most cases there will be some form of title search and title insurance required.

7. Inspection

Never buy property without having it inspected by an unbiased third party. An inspection can turn up problems that may be really significant, from a plumbing problem to a cracked fireplace. If the inspection does uncover problems, you will need to discuss and negotiate repairs with the seller.

8. Appraisal

An appraisal offers a professional estimate of the property’s value. The lender will not be able to approve a loan for more than the appraised value of the home, so if the appraisal turns out to be lower than the agreed sale price, your deal is in trouble. Actions you can take include the buyer making up the difference in cash, the seller agreeing to lower the purchase price to match the appraisal, or requesting a different appraisal. This is an area that has come under increased scrutiny recently, so you will have to be cautious on the matter of conflicting appraisals.

9. Loan Commitment

You will feel a big sense of relief when the lender reviews your documents and approves your loan — you’re almost done!

10. Buyer’s Final Inspection

The final walk through is scheduled shortly ahead of closing. During the inspection, you get to make sure that the property is in the condition you agreed to purchase it in — that all of the repairs required to have been completed by the seller have been completed satisfactorily, and that the property has not been damaged since you contracted to buy it.

11. Closing and Possession

Closing is the transfer of the title of the house to you, the buyer,. You will be expected to pay the agreed down payment and any closing costs. Before the day of the closing you will know exactly how much money you will need to turn over to close.

That’s all there is to it! You’ve made it. Once you’ve made it through those simple steps, you’ll have your home.

If you ever have a need to check out homes in Boulder, try the Colorado real estate experts at Automated Homefinder. for free information and instant listing updates, for homes that match your exact criteria.

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