How The HomeBuying Process Works

How The HomeBuying Process Works

                                                                                                                                Image title

                                                               How the Home Buying Process Works

1.   The most important thing to do, before even looking at homes, is to speak with a lender.
      Why? Well, you need to find out:
     a.       If your credit rating is insufficient, or what you may need to do to get it there. Ask them how to fix credit, report errors & how to raise your score.
     b.       How much house you should be looking for, taking into account your current debt and income as well as your cash availability.

Having this initial conversation with a lender before looking at homes will ensure that when you find the home that suits you best, you are ready to move forward with the process of making it yours. Buyers who wait to talk to a lender until after they have found a home take the risk of losing that home to another buyer who has already done their homework.

2.   Pre-Approval vs. Pre-Qualification
     a.       A pre-qualification is quick and simple. Typically, just a credit check is done to be sure your score is sufficient. Your incomes vs. debts are compared to be sure your ratio is at a level that would allow you to afford a monthly mortgage payment.
     b.       A pre-approval is obtained from your lender by taking the pre-qualification process a step further with the verification of your income through submission of your tax returns for the last two years, and paystubs and bank statements for the past two months.
This is what you need before home shopping. Pre-approvals are what sellers are looking for from someone who presents an offer to buy their property.

It may sound like a lot of work just to get ready to look at homes, but serious buyers know that they will need to go through this step anyway.

 c.           Cash buyers may take out equity in another property or pull funds from investments. These buyers must show their account statements to assure the seller of their seriousness.

3.  Finally! The search for your new home begins.
        a.    Have a conversation with your Realtor about your wants and needs in a home, your intended                                                         

time frame, your current living situation, and any future life-changing events you anticipate.

         b.    Check our website and choose the homes you want to visit.
         c.     Visit homes with your Realtor so they can offer advice and guidance.

         d.     Find the home that suits you best and move forward with your purchase.

4. When you are ready to make an offer you will need 2 things:
        a. The pre-approval letter from your lender.
        b. Earnest Money Deposit of 1.5-3% of the offer price. Remember your offer, if accepted, is a BINDING CONTRACT. You are showing the seller that you are serious by offering the Earnest Money Deposit up front. Sellers need to feel comfortable with taking your offer because they are required to stop marketing the home during your contract period. Your deposit is accounted for at settlement, so don’t worry that you are paying anything above the agreed purchase price.
5. Negotiate any counter offers from the seller until everyone is comfortable and happy and the sales agreement is signed.

Believe it or not, you are now only part way through the home buying process. During your contract {escrow} period for the next 45 to 60 days {or longer}, your agent, will be working hard to manage all of the players involved in your home purchase transaction. This includes your lender with their loan processors and underwriters, the title company, the sellers and their agent, any home inspectors, appraisers, surveyors, insurance companies, etc. It is only when everything has been completed that settlement occurs, and you receive the keys to your new home.

Jon DeCurtins Headshot
Phone: 513-600-7231
Dated: March 9th 2016
Views: 489
About Jon: Jon is the Lead Agent for "The DeCurtins Team," one of Cincinnati's top real estate teams. The DeCur...

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