Is it your dream to buy your own home? If so, prepare yourself to undertake a huge financial commitment. What exactly is involved in the purchase of real estate? The following information will give you a good idea of the home buying process timeline, what the key stages are, the usual fees involved, etc. Real estate transactions are not quite as cut-and-dried as you imagine they would be.
Take the following steps for the Home Buying Process Timeline:
- Engage a buyer’s agent who will represent you and look out for your best interests. If you’ve chosen a particular area, see if there’s a neighborhood specialist you can hire.
- Get prequalified or preapproved. Start by ordering a free credit report, and then research different options for mortgage. Figure out what type of mortgage is best for you. Ask your lender as well for a loan preapproval letter.
- Start shopping around for a house. Get your buyer to narrow down your search and have him look over home listings that caught your eye online.
- Make an offer. If it’s a lowball offer, get your agent to substantiate the price for you. Prepare for multiple offers if the house is in a prime location.
- Negotiate and get to know the seller. As you exchange counter offers, share personal information to establish rapport.
- Deposit earnest money when your offer is accepted. The check shouldn’t be payable to the seller to allow for contingencies that will get you your money back if the transaction doesn’t pan out.
- Open escrow. Your agent or the listing agent will open escrow and title, so get the escrow officer’s name and phone as well as the escrow file number.
- Pay your lender for appraisal. Ask for a copy, and if you get a low appraisal, discuss your options with your agent.
- Meet your lender’s requirements. When your file is complete, it will be submitted for final underwriter approval.
- Read and approve all seller disclosures. These include the TDS, the Seller Property Questionnaire, pest inspection, natural hazard report, preliminary title policy, etc. You have 10 days to consider backing out.
- Take care of insurance. It’s good to order your homeowner’s insurance early since previous claims by the seller may make it difficult for you. Make sure to get replacement coverage.
- Hire a home inspector and join him for the home inspection. Bring a list with you so you remember all that you want to check out. In case of health and safety issues, you could issue a request to repair or negotiate to lower the price.
- Remove loan contingencies, but first make sure that your loan is firm and the appraisal is acceptable.
- Inspect the property again. See if everything is in order, if the repairs agreed upon were carried out by the seller.
- Sign loan and escrow documents. In Northern California, you sign both near closing. Remember to bring a valid ID picture for the Home Buying Process Timeline.
- Issue a certified check payable to escrow or get your bank to wire it. Escrow usually pads the amount, so you may get a refund after closing.
- Close escrow. Public records will include property deed, deed of trust, and seller’s reconveyance. You’ll be notified when they record. After this, the property is yours, unless there are special stipulations in the contract.
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