First and foremost let me say, being a homebuyer has MANY steps... Let's be real with each other here, it isn't that often when the average person is seasoned enough to remember the entire process, unless of course you do this for a Living... Now, keep in mind that people typically don't sell their first home for 7-10 years on average. With this in mind, like the weather in Houston, the process is always changing.
I am going to provide you with a step by step process on what you need to do and prepare for as a buyer...
1.) Breathe, this process can be as amazing as you and your Realtor allow it to be.
1.) Really this is number 2.) but I wanted to remind you the importance of taking a step back and breathing. Please, do yourself a favor and this is really the first thing I try to tell all of my customers, find a LENDER that you feel comfortable with. Someone you feel that really has your best interest at heart. Many buyers just pick a lender because it was convenient and it really was a terrible event because they felt like just another number. YOU are the Lenders employer, YOU are how he gets paid.... Just bare this in mind. Next, once you choose your lender, you get a Pre-qualification. Now, let me explain the difference between a Pre-qualification and a Mortgage Approval.
----The Pre-qualification is just a paper stating based on the things you provided things look good. Now the loan officer you are choosing is not the final say as to whether you get the mortgage.
2.)Once you choose a home that you absolutely like and wish to make yours, as the Realtor, we evaluate several factors before submitting an offer. First and foremost is making sure it fits all of your needs. If you run a business out of your home and the house is in a Homeowners association, the rules need to be reviewed to make sure the HOA allows for such. The sellers disclosures should be reviewed to make sure nothing CRAZY has happened to the home and the repairs the seller has made. As a Realtor, it is my responsibility to provide you with a Comparative Market Analysis. This is to verify the value of the home in the neighborhood it sits in. This too, helps in preparing an offer on the home.
3.) ---The next step is submitting an offer to the seller. It is within a few days to a week after submission, the seller either accepts, rejects or counteroffers your offer. If we get a fully accepted contract, the next process is I submit the contract to your lender to proceed with the specified financing and your provide the option money and the escrow deposit.
4.) In the contract, part of the negotiations is the option period. This allows you, as the buyer, the opportunity to pay someone to inspect the home. I HIGHLY SUGGEST Home Inspections. This consists of a major Inspection of the Home, a Termite Inspection, maybe a structural inspection pending the outcome of the home inspection and lastly a Septic Inspection if the home is on a Septic system and a well inspection if it has a well. Now, should there be anything major wrong that you, as the buyer just cannot accept, during the option period you have the ability to get out of the contract. If you don't take an option period, well, it is harder to get out of contract. The other option is to head back to the renegotiation table and try to get the seller to fix the problems with the home. Upon agreement, and addendum is created and all parties sign to the terms of the contract.
5.) Once you have determined to stay with contract the next step is to follow up with the lender, let them know we are proceeding and then they send the appraiser out to do an appraisal of the property.
Meanwhile, it is important for you to contact your insurance company to get a quote on homeowners insurance... I actually recommend getting several to find out who has the better coverage for less money. I, too will be doing the same, then it allows you to see various quotes and compare....
While we are waiting for the appraiser, the file goes through underwriting and this is where they evaluate you, as a buyer. They are looking at paystubs, 401k's, IRS's, job history/stability, credit, etc. Now if there is anything that comes up during this time, they will send the loan officer to respond to maybe needing additional information/documentation from you.
****DO NOT MAKE LARGE DEPOSITS OR WITHDRAWS DURING THIS TIME. Everything that is put into the account or taken out in large sums has to be accounted for... It is called sourced and seasoned.. Also, PLEASE make sure you do not miss any payments or open new accounts during this time... This can cause HUGE issues, ultimately leading to loan denial or delayed closings!
~~~Now, should for whatever reason the home not appraise, we get to go back to the seller and ask them to reduce the price or you can pay the asking price, that is all part of the negotiation after getting the appraisal. Once that part is done, the appraisal goes back into underwriting for review.
6.) Now, the seller can provide the previous survey if they have one, or we must order a new one. This must be sent to the title company after completion so it is not an exception to your title insurance policy.
--It is roughly at this point where there is a LOAN APPROVAL issued.. This is where the Lender is stating Hey, YOU are APPROVED providing you can get me xyz.. It could be something as minimal as them calling your employer to verify employment.
A title insurance policy provides the assurance that there are no liens, incumberances that inadvertently affect the value of residential real property...
7.) Once the title policy is submitted to the lender and all of the stipulations have been cleared than we have what is called a clear to close and then all the documentation is submitted to the title company for final documents to be prepared. We, the Realtor and buyer consult to find a convenient time to go sign all the documents on the specified closing date in the contract or sooner if the seller is on board....
8.) The Realtor and buyer, prior to closing meet at the property to do a final walk through. This is to verify that everything that was negotiated in either the contract and/or addendum are present and in good condition. If the property is in acceptable condition as we contracted for than we head to closing!!!! WOOHOOO This is YOUR NEW HOME..
9.) Celebrate after closing! :) This is the time where you should be overjoyed, relieved and ready to open the next chapter in your life :)**** Welcome Home****
Should you have any questions, don't delay, I am here to assist-
~~Mary Dover- Ross & Marshall Realty