INFORMATION FOR THE FIRST TIME HOMEBUYER
I’ve been there before personally. I’ve been a first time homebuyer. At first glance, the process can look overwhelming and confusing. But when you break it down, it isn’t. It especially isn’t when you are working with a real estate professional that will walk you through the entire process with ease.
For a private, no-obligation consultation to learn how I can help you with your home buying needs, please contact me.
For more information on the first time homebuyer tax credit, visit http://www.federalhousingtaxcredit.com/.
The Timeline of the Home Buying Process
Many buyers believe that the REALTOR’s primary job is the showing of homes. While this is, of course, an integral part of my job, the process begins well before that point.
The first step is a meeting with you and with anyone else who may have a part in the decision-making process. This meeting will encompass several important steps:
Step One: Agency. We will discuss the laws of agency, and I will explain how and when I will represent you. The State of
Step Two: Fair Housing and Lead-Based Paint. I will also give you brochures explaining Fair Housing and the hazards of lead-based paint, and answer any questions you may have regarding either. You will have an opportunity to waive the option of a lead-based paint inspection when you write an offer on a house. It is important to read this pamphlet so you will be able to make an educated decision when the time comes.
Step Three: Open Houses. If you “drop in” at an open house and register without informing the host agent that you are currently working with a buyer’s agent, you may be required to purchase that home through the host agent. A problem could occur if the open house agent represents the sellers’ best interests, in which case he or she will be unable to negotiate in your best interest. Sellers’ agents are required to represent the interests of their clients in all transactions. You can avoid this potential problem by asking the agent if he or she will honor me as your buyer’s agent. If so, you can register at the open house using my name and telephone number. The best way to view open houses in which you are interested, however, is to call me and allow me to set an appointment to view the home – either accompanying you to the open house, or seeing the home as soon as we can tour it together.
Step Four: For
Step Five: Financing Alternatives. I would be happy to set up an appointment for you to meet with a lender, if you have not already done so. Even if you have met with a lender, we have an on-site lending representative (one-stop shopping) who can meet with you and explain any available incentive programs for which you may qualify.
Step Six: Offer Presentation. When we find a home for which you would like to tender an offer, we will meet back at the office and prepare the contract. I will compile a market analysis, outlining the prices of homes in the neighborhood where the house is located. After that, we will review the Property Disclosure completed by the sellers and acknowledge (by signature) that you have read it. We will complete the lead-based paint disclosure and decide whether to accept or waive your right to a lead-based paint inspection. The actual offer involves several important decisions, as enumerated below:
1. Offer price
2. Earnest money (expressing your sincerity in purchasing the property – typically between $0 for VA Loans and $2,000)
3. Amount of down payment
4. Date of closing and move-in date
5. Home inspection (highly advisable!)
6. Items to remain with house (e.g., appliances)
Multiple Offers: When a property commands more than one written offer at the same time, the buyers enter into a competitive bidding situation. The sellers will review all offers and usually accept the best offer outright, unless all offers are too low. As a buyer, you must be willing to write your highest and best offer right from the start. The buyers with the best initial offer (i.e., price, terms, points, dates, financing strength) will have their offer accepted. Negotiation is not typical in this type of situation.
We will now review homes that fulfill your needs and set an appointment to view those properties. And now the fun begins – looking for your new home!
After the Offer and Beyond . . .
Should the sellers not accept any terms of your offer, they may “counter.” If this should happen, it is up to you to determine whether you are comfortable with the terms of the counter offer. If you are not, you may counter their offer. If you are comfortable, you will initial and date any changes made by the sellers, resulting in a valid contract and a major step toward owning your new home.
The timeline from the day you enter into a mutually accepted, signed contract becomes an important factor at this point in the transaction. Dates and timeframes are negotiable, but must be specific.
Within 5 Days . . .
Typically you have five (5) days after an accepted contract to make written loan application with your lender.
Within 7 Days . . .
If you wrote the offer contingent on a home inspection, you must have the home inspector of your choice inspect the property within the time specified on the contract. The home inspection typically takes about two hours. The inspector is paid and hired by you, and will give you a report (usually written) with his findings regarding the condition of the home. It is advisable to be present at the inspection to learn and understand more fully the strengths and weaknesses of your new investment. The inspector is bound to find some problems with the home; no home is perfect, and all homes will include regular maintenance items. If the inspector should find a material condition that would have affected your offer price (if you’d known about it when writing your offer), this is the time to renegotiate.
Within 30 Days . . .
You normally have 30 days within which to receive notice of final loan approval from your bank. You must make sure to immediately send the bank any information they request (e.g., bank statements, rent statements, tax records, etc.). Being prepared will speed the approval process.
Within 30 to 50 Days . . .
The bank will require an insurance binder from you as proof that you have acquired insurance on the new home. After loan approval, you should contact your insurance agent to begin this process. The bank will also inform you of the amount of money you will need to bring to the closing. At that time, you must bring a certified check or money order in the amount of your down payment and closing costs. Once you have proven insurance coverage and obtained the check or money order, you will sign all of your final papers.
Seven to ten days before title transfers, you should call the utility companies to have the accounts transferred into your name(s). Inform them of the possession date as activation date.
As a rule, within five days of signing (refer to your contract for the exact date) the deed will be recorded with the county in your name and filed. This is known as the title transfer date.
Again, depending on the date in your contract, you will generally obtain possession of your new home 0-7 days after title transfer. On the day of possession, you will receive the keys to your new home. It is recommended that your actual moving date be a day later, as actual time the keys are handed over can vary from
CONGRATULATIONS! You dreams of owning your new home have become a reality! Now comes the fun part – unpacking.
