The first step in buying a home starts with financing. Whether you contact your local Lender or search rates on the internet, it is a good idea to gain information regarding the loans available to you, how much you can qualify to borrow, and how much that payment will be including taxes and insurance. Your Realtor can help you find Mortgage Brokers that will work with you by phone, visit or email to attain initial information and pre-approval. You may search rates online by clicking the Interest Rate button on my Home page at www.realtyworldhickory.com. You can play with payment scenarios by clicking the ?Calculator´ button.
There are many different loan programs available now that fit many homeowner needs. However, most lenders will require at least 5% of purchase price as down payment. Closing costs again will vary by the type of loan received, but will run somewhere between $3,000 to $5,000. Your lender will be able to give you lots of good information in this regard. Also, the Interest Rate site from our Home Page, www.realtyworldhickory.com will also be informative.
Step Two: Contact Your Realtor and look at Homes
Armed with this mortgage information you will be more prepared to discuss with your realtor exactly what you wish to purchase; your Realtor can let you know what is available in your price range in the areas where you wish to live. This can be done by beginning an internet search from our Multiple Listing Service of all homes currently available on the market in our area. Your Realtor will feed your criteria into the MLS database and see what all is available that meets the criteria you have established in the area and price range you need to be within. We can email you these results, discuss them by phone, or set up a personal office consultation to review the findings. To assist you in providing good search criteria, see the Dream Home Finder from our home page, www.realtyworldhickory.com.
If your search includes browsing through the Homes & Land Magazine or the Real Estate Book, you may find a helpful page on our Website home page at www.realtyworldhickory.com entitled Where is A5. This is a code which tells you what area of town where the home is located and can help eliminate a lot of time checking out the wrong area of town for you.
Once we have narrowed the search to your choice homes, we will set up a time to go visit 5 or 6 of them in person. An inside visit will give you a better idea of the quality home that fits your price range and give your Realtor a better idea of what you are looking for as you tour the homes together. This will help us better understand exactly what you have in mind. An appointment can be made for a second tour of other possible homes and continue this process until you find the home for which you are searching.
Step Three: Making an Offer to Purchase
Once you find that home, the next step is Making An Offer to Purchase. Your Realtor will complete with you an Offer to Purchase agreement making an offer to the seller as to what you will be willing to pay in a purchase of the home as well as dates and other terms you would like included as part of the contract. The Offer is made on a standard form drawn up by the North Carolina attorneys with the protection of you, the client in mind.
Along with the Offer to Purchase, you will be expected to put down an amount of Earnest Money which will accompany the contract. This money will be held in Trust by your Agent (or the Selling Agent) until closing at which time it passes to the Closing Attorney and will be deducted from the total amount due for the purchase of your home. A higher amount of Earnest Money shows the Seller you are serious about the offer as well as showing stability in ability to purchase.
The contract will include a Contingency paragraph stating what type of loan you expect to be getting and if in fact, you are unable to get the funds, you may revoke the offer and receive your Earnest Money back. This is a built-in mechanism that allows you to make an offer in good faith by putting up funds to back it, but be protected should you be unable to fulfill it due to lack of funding. This is why many Sellers require you to get that pre-approval from a lender before they accept an offer and take the home off the market.
Also included in the contract is a provision that gives you the right to inspect the mechanical, electrical, plumbing and structural portions of the property. There are inspection companies that provide services of this type and it is suggested that you utilize one. Your Realtor can assist you in setting this up. This is a buyer expense but is valuable in that it gives you an overall view of the condition of the home you are about to purchase. Some inspectors allow home buyers to accompany the inspector to observe, ask questions and receive tips on care and operations of mechanics, approximate remaining life left on a unit, etc and receive overall useful information.
Not all deficiencies noted in this report can be expected to be remedied by the seller; however it allows you better insight as to exactly what you are buying. You will receive a written report itemizing any areas of concern. If repairs are needed, you can request the seller to make them in accordance with the provisions of the sales contract. This usually reverts back to a negotiating point. If it is a major item the seller will usually be willing to repair in order to sell. Should he be unwilling to repair, (if it is a major item and not performing the function for which it was intended) you would then have the choice of accepting the home as it is or walking away from the contract with your Earnest Money.
Once you have completed your Offer to Purchase, it will be presented to the Seller´s Agent to present to the Seller. Unless the Offer is a Full Price Cash Offer meeting all terms according to the listing, the Seller will have two options; he can accept the offer as is or refuse it. If he refuses it he will most likely come back in the form of a counter-offer stating that he will not accept your offer as is but he will accept ? At that point you will look at the counter offer and can either accept or reject it. At any point where an offer is countered that signifies a rejection of that offer and presents a new offer for consideration. One party cannot go back and accept an original offer on which they have already countered, without the consent of the other party to offer it again.
Step Four: After the Offer is Accepted
A typical contract will allow for a closing in approximately 6 weeks. This allows you three weeks for your lender to process your loan and give you final loan commitment. (This differs from the pre-approval letter by the fact that the loan commitment is actual commitment to loan the funds where pre-approval states that based on your criteria you qualify by their standards for a loan of that amount). Your lender will also order an Appraisal to be sure the home is worth the value they are willing to loan.
Once you know you have loan commitment, we have the last 3 weeks to start the home inspections. Your lender will typically require a Termite Inspection and sometimes other inspections such as water testing and/or survey, etc. This would be the time for the Home Inspection as well. Most Lenders do not require Home Inspections; thus it is up to the buyer to make that decision. Again, we do suggest that this Home Inspection is well worth the money as a form of knowledge and security in a major purchase.
Your Realtor will work closely with you, your lender, and attorney all the way through from Offer to Closing, making sure they have all the information they need to put everything in order for a smooth closing. She will make an appointment with a Real Estate Attorney of your choice to do the closing and coordinate with him and the lender the paperwork needed to make sure a smooth settlement occurs.
About a week prior to closing, your Realtor will get a utility list from the seller with the names of their utility companies. You will need to call each of them and arrange for these utilities to be placed in your name as of the day of closing. In some instances it will be a matter of switching accounts; others might require a deposit and application.
You will also need to contact your Insurance Agent prior to closing and get insurance coverage on the home effective the day of closing. You will need to provide a copy of the cover page with a years coverage, to the closing attorney. A portion of your closing cost will also go toward a few months of escrow which will be to pay for insurance and taxes; however, this year´s coverage is required up front. The escrow monies is just to insure that when the time comes for the lender to make the payment again, enough funds will be there to do so.
Just Prior to Closing we will set up a time where we can go through the house one more time for a final walk-through. This is just merely to check and make sure the home is still in tack as was at the time you made the offer. All repairs and requests for such should already have been settled by this point.
Step Five: The Closing
The closing attorney will do title work and will be responsible for disbursing all funds required to give clear title and record the deed. He will gather payoff information on any outstanding leins on the property and make sure they are paid. Your Realtor will coordinate with you a time for the settlement where you will meet at the attorney´s office and sign numerous documents relative to the purchase. Your lender should have familiarized you with several of these documents in your initial meeting. Your settlement attorney can answer any questions you might have regarding any of the documents you sign.
Prior to closing (usually the day before) the Attorney will do a final settlement statement with all the final costs itemized which are required to close. Your Realtor will review this with you and give you the amount you will need to bring to closing. This amount will be required to be in the form of a Certified check made payable in the name of the closing attorney´s Trust Account. You will then need to allow time to go by the bank or make arrangements to get these funds prior to going to closing.
Once all documentation has been signed by both Seller and Buyer, the Closing Attorney will take the documentation to the Court House and Record the Deed. (Once the Recording has been made and all disbursements complete, the attorney will make copies of all completed and signed documentation and mail it to you.) Most settlements will run smoothly and will take from 30 minutes to an hour.