Mortgage pre-approval should be completed even before you start looking at homes. Getting pre-approved will confirm that you qualify for the financing you need to purchase a home. It will also tell you how much money you can borrow, which will help you keep your home search in the correct budget range.
Getting pre-approved also shows sellers that you’re a qualified buyer. When you’re ready to make an offer on a home, your pre-qualification will assure the sellers that you can get the funding needed to close the deal. So the sellers will be much more likely to consider your offer.
Most lenders offer online pre-approval. You’ll simply go to the website for your chosen lender and complete an online pre-approval application. This usually takes 15-30 minutes. You’ll answer questions about your income, debt, employment, and savings. Then you’ll need to provide documents like:
You’ll also need to authorize a credit check so the lender can see your credit score.
In most cases, you’ll get your pre-approval letter within 24-48 hours. If you need any help finding a reputable lender, simply contact us.
Now comes the fun part: looking at homes!
Here are a few house-hunting tips to make the process enjoyable and effective:
When you find a home that meets all your needs and most of your wants, it’s time to make an offer.
This is where your real estate agent’s market knowledge and negotiation skills become a major factor. We know what it takes to get an offer accepted. And we know when you can ask for extras from the seller (like asking the seller to include certain fixtures or even pay some of your closing costs).
If you would like to make an offer on a property, and you’re not currently working with an agent, contact us asap! We will run comparable sales to advise you on an appropriate offer price, we’ll draft the paperwork for you, and we’ll present your offer to the seller's agent for the seller’s consideration.
The seller might accept your offer as-is. Or they might counter-offer with a different price or different terms. In a hot seller’s market, it’s also possible that there could be multiple offers on the property, and the seller will choose another buyer’s offer over yours. If you’re serious about a home, make a strong offer so that you don’t risk losing it to another buyer.
Once the seller accepts your offer, we are officially under contract. At this point, you will pay an earnest money deposit to reserve your interest in the house. This money is needed because there is typically a 30-60 day window between going under contract and officially closing the transaction, and the sellers need some assurance that the buyers won’t back out of the deal without legal cause.
There are legitimate reasons you can back out of the sale during the contract period, including:
Your contract will most likely include contingencies for these situations, which allow you to terminate the contract and get your earnest money back. But, the goal is to clear all contingencies and have your earnest money put toward your down payment.
It is in your best interest to order a home inspection and an appraisal as soon as the property is under contract. If you’re getting a home loan, your lender will likely require the appraisal (and possibly the inspection as well). Buyers generally pay for both. The cost varies greatly (depending on the size of the home and the neighborhood), but you should expect to pay between $500 and $1,000 for each.
A home inspection is when a certified home inspector physically visits the property and evaluations the condition of the home. The inspector will write up a detailed report outlining every visible defect or potential issue.
Most buyers are overwhelmed at the number of recommended repairs in a home inspection. Keep two things in mind:
As your real estate agent, we can review the inspection with you. If there are serious issues that need to be addressed, we might consider re-opening the negotiations to ask the seller to make some repairs or to reduce the price to account for the repairs that are needed.
The appraisal is when a licensed real estate appraiser visits the house and conducts market research to determine the value of the property. In most cases, the value will be in line with the agreed-upon purchase price.
The appraisal is rarely higher than the purchase price. But, if that happens, great! You might be getting an even better deal than expected!
Sometimes the appraisal will come in lower than the purchase price. And this can create an issue because your lender won’t want to loan more than the property is worth. Again, this is where a skillful agent can save the day! It takes a little creative problem-solving, but there are ways to get around a low appraisal and still proceed with the purchase.
All through the contract period, your lender will be working on underwriting your home loan. Your job is to provide your lender with the financial documents they need to do their job (typically updated versions of the same documents you used for your pre approval).
Underwriters triple-check every detail, so you might need to answer questions about large deposits or large withdrawals from your accounts. And your employer will likely receive multiple phone calls through the contract period to make sure you’re still in your current position.
During the contract period, it’s imperative that you keep your finances as stable as possible. Any disruption could cause the underwriting process to start over and could delay your closing.
So, while you’re under contract, do not:
Throughout the contract period, you’ll receive many documents to be signed including various disclosures, contingency removal forms, and your loan docs. Many of these docs just need a quick electronic signature. But some of these documents will need to be notarized. We’ll help you arrange the notary, and he or she will witness your signatures for those documents.
All the hard work has paid off! All contingencies have been met and your loan is funded. Now you just need to wire your down payment and closing costs to the authorized party, who will distribute the proceeds as outlined in the Settlement Statement. We’ll make sure you have all the information needed to make the wire transfer.
Did you know that buyers typically don’t have to pay for a real estate agent? In most cases, the seller pays all real estate agent fees, including the fee for the buyer’s agent. So, in all likelihood, it won’t cost you anything to hire us as your professional representative in the purchase of your new home! And the service of an agent is invaluable for buyers. Here are just a few of the reasons to hire a real estate agent:
And again, in most cases, you don’t have to pay for these services since the seller will cover the real estate agent fees. You have nothing to lose and everything to gain!
We love helping buyers find new homes to fill with years of happy memories! And we're always happy to answer your questions. Please contact us any time we can be of service.
It’s our goal to provide you with peace of mind and guidance every step of the way. Schedule your strategic planning consultation today!Contact Us