07/11/2023
Looks like a lot of people are buying homes for the first time. Now THAT'S adulting!!!
𝗛𝗘𝗥𝗘 𝗦𝗢𝗠𝗘 𝗧𝗜𝗣𝗦 𝗬𝗢𝗨 𝗦𝗛𝗢𝗨𝗟𝗗 𝗞𝗡𝗢𝗪 𝗪𝗛𝗘𝗡 𝗕𝗨𝗬𝗜𝗡𝗚 𝗔 𝗛𝗢𝗠𝗘:
1. Hire a Realtor! Typically, the seller pays commission to both the sellers agent AND the buyers agent so it is no additional cost to you. The Realtor you hire doesn't just open doors. They will help you find your dream home, be YOUR advocate, negotiate for you, ensure you fulfill the obligations of the contract on time, provide contact info to resources you will need throughout the process and guide you through the entire transaction. By the way, even if you're buying a new build YOU NEED A REALTOR! The sales agent at the model home works for the builder and not you.
2. Get pre-approved for a loan so you know your budget. The loan officer may also give you guidance on how to improve your credit to increase your loan amount or lower your interest rate! Your Realtor can give you the contact info for lenders. Not all lenders are the same and your Realtor will be a great resource of information to connect you with a lender that may be best for your financial situation. The lender will also give you an estimate of your monthly mortgage payment and funds needed to close which includes down payment AND closing costs. You will pay your down payment and the majority of your closing costs on your closing day. Some of your closing costs will be paid shortly after an accepted offer such as option money (varies by state), earnest money and appraisals. 𝗬𝗼𝘂 𝗻𝗲𝗲𝗱 𝘁𝗼 𝗯𝗲 𝘀𝘂𝗿𝗲 𝘆𝗼𝘂 𝗵𝗮𝘃𝗲 𝘁𝗵𝗼𝘀𝗲 𝗳𝘂𝗻𝗱𝘀 𝗮𝘃𝗮𝗶𝗹𝗮𝗯𝗹𝗲 𝗯𝗲𝗳𝗼𝗿𝗲 𝘀𝘂𝗯𝗺𝗶𝘁𝘁𝗶𝗻𝗴 𝗮𝗻 𝗼𝗳𝗳𝗲𝗿 𝗯𝗲𝗰𝗮𝘂𝘀𝗲 𝘁𝗵𝗲𝗿𝗲 𝘄𝗶𝗹𝗹 𝗯𝗲 𝘁𝗶𝗺𝗲 𝘀𝗲𝗻𝘀𝗶𝘁𝗶𝘃𝗲 𝗱𝗲𝗮𝗱𝗹𝗶𝗻𝗲𝘀 𝗶𝗻 𝘁𝗵𝗲 𝗰𝗼𝗻𝘁𝗿𝗮𝗰𝘁. Your lender and Realtor can give you an estimate on what that portion of the closing costs may be. Your lender will also let you know if you qualify for down payment assistance which will lower the amount of money you will need on closing day.
3. Once you're pre approved, it's time to go shopping! You and your Realtor should have a thorough conversation about your housing needs so they can send you homes that match that criteria.
4. Once you find a home, your Realtor will submit an offer and negotiate for you. Once your offer is accepted, you will pay earnest money and schedule an inspection. When you complete an inspection, you'll learn about the house and negotiate for repairs. Every home will have items appear on an inspection report but don't be scared. The inspector and your Realtor will help you focus on items of concern and items that a handyman can do after closing or diy projects. If you decide to move forward to closing, this will also be credited to your closing costs on closing day. If you decide to cancel, this money goes to the seller to compensate for their time off of the market.
𝗪𝗵𝗮𝘁 𝗶𝘀 𝗲𝗮𝗿𝗻𝗲𝘀𝘁 𝗺𝗼𝗻𝗲𝘆?
Earnest money is good faith money to show you are a serious buyer. It is usually about 1% of the offer price but it's negotiable. These funds are credited to your closing costs if you close. If you cancel the contract, you may lose this money. There are many reasons you can cancel and get your earnest money back and your Realtor can advise you of all of those opportunities. During this period is when you will complete an inspection, learn about the house and negotiate for repairs. Every home will have items appear on an inspection report but don't be scared. The inspector and your Realtor will help you focus on items of concern and items that a handyman can do after closing or diy projects. If you decide to move forward to closing, this will also be credited to your closing costs on closing day. If you decide to cancel, this money goes to the seller to compensate for their time off of the market.
5. When you're under contract, continue working with your lender to get fully approved. Do not open be lines of credit or do anything that will negatively impact your credit score. Your lender will give you more details. Your lender will also order an appraisal to ensure the home is valued at or over the offer price. You usually pay for this when they order it. It is not refunded if you cancel so it is usually ordered after your option period when your inspection is completed and you've decided you are moving forward with the purchase. If you do close, this is also credited to your closing cost on closing day.
6. A title search is completed to ensure you will have clear title to the home. That means no one else will be able to claim your home like an heir, spouse or relative of the seller.
7. You're in the home stretch to becoming a home owner. Time to schedule for transfer of your mail, set up your utilities, start packing and arrange for movers.
8. Once there is clear title and you a fully approved, you will be clear to close. You will sign documents which will include the deed to the house. You will also pay the balance of your closing costs and down payment. Once you're done, 𝗖𝗢𝗡𝗚𝗥𝗔𝗧𝗨𝗟𝗔𝗧𝗜𝗢𝗡𝗦, you're a homeowner!!!!
Ready to adult? Let's chat!! I cover the Central Indiana area but have connections all over the world.
317-442-8827
[email protected]
