I’m proud to say my little sister is purchasing her first home! It’s in Oregon so I can’t help her directly, but in an attempt to help from a distance I wrote her a bulletpoint crashcourse. In case this can bring you value as well; I wanted to Share it here:
– Get lender your documents
– Get a copy of your credit info from lender if you decide to “shop lenders and rates” don’t shop too much, anything in excess isn’t a good thing.
– In your case, Plan for a December contract, with close of escrow being in January.
– If you can close the home in mid January, your first payment won’t be until March 1st!
– Look for homes that have been on the market for 25+ days, you will be able to ask for closing costs paid by the seller in your offer.
– Agent’s Write offers. They are 9-12pages Of legally binding documents. Agents show you homes. Agents negotiate on your behalf. You are in charge, you tell them what you want to do, and they act on your behalf based on your needs, goals, and instructions.
– Lenders Write Preapprovals, they get you the loan, and they send their company’s funds to escrow. When added to your funds, it will equal total amounts needed to close the deal. (I will send you a blog I wrote describing what escrow is and what it means.)
– You must have a Preapproval for an Agent to write your offer, otherwise it is considered incomplete.
– You can write offers on anything considerable that can feel like home. Just remember you can only move forward on one property.
– Due Diligence period – after your contract gets accepted, you have 10 calendar days to cancel for any reason and not lose your EMD.
– EMD – means earnest money deposit. This is a set amount (2000-3000$ Average) that goes straight to escrow within 48 hours of an executed contract. This is your skin in the game. If you back out after your due diligence period, you lose this. If you cancel within those 10 days, you get this back no matter what. (There are other instances, this is a 101 course)
-Home inspection – during your due diligence period (10 days) you can pay a third party to have the home professionally inspected. You will be provided a report. You can have the agent prepare a document requesting any repairs and/or money instead of repairs (they don’t have to give you anything at all, and you will want this done in that 10 day span with enough time for the seller to respond). Any items agreed to be fixed must be fixed before you close, not before the 10 days is up. This should cost around 300-400$
Appraisal – after the inspection, you will order an appraisal through the lender. It will cost approx. 400-600$. This is the loan company verifying the value of the property. (If you qualify for a loan of 200,000 and the home appraises for 190,000, you do NOT get to keep any overage).
If the home appraises for less than your purchase/offer price –
You will ask that they reduce the price to the appraised value. A lender will only loan for the amount the house is worth!
Try to get them to lower the price while keeping any closing costs the seller is paying for during the initial negotiation when you submited your offer and/or counter offers.
If the home is worth more than the offer price – then you do not need to get a loan for more! You get the home for what your contract says, and you walk in with instant equity!
After that, you continue to get the Lender any paperwork they require. And you wait.
They will give you numbers and estimates and balance closing figures with escrow.
Once you reach the finish line
You will walk through the property 3 or less days from the time you close. Walkthroughs are conducted with your agent.
You will sign all final docs at title.
The last of the money due (minus your EMD, minus your loan amount) must be Wired from your bank, to escrow.
After your Agent or Title tells you that you’ve successfully recorded. You are now a homeowner. And ask, where’s my keys!
Lol happy hunting 🙂
* This is applicable mainly during the winter months and our current marketplace as of (12/1/18) and is not a way to go about things during other times of year!
Reach out with any questions 🙂