You’ve made the decision to buy, but you’re overwhelmed and not quite sure where to start. It’s OK, we’re here to hold your hand through the home buying process and make it as stress-free and seamless as possible. So what do you do first?
Get a prequalification! Before you even start looking for your new home, you need to know what you can afford. A prequalification is the process in which a lender determines your eligibility based on your credit score/history and the information that you give them about your income, assets and debts. Not sure who to call? The Riffle Group has several experienced, trusted, preferred lenders that we can direct you to.
Let’s start looking! Once you know what you can afford, we’ll start looking for homes within your search criteria. It is important that you tell your agent what you are looking for in as much detail as possible. (Now don’t be too picky, no house is perfect – well unless you can afford to have it custom built.) And our website is a fantastic resource for searching for your new home! Of course you can search by county, city, zip code, like with a lot of the other sites, but did you know you could also search for a specific subdivision such as ‘Piney Orchard’, ‘Farmington Village’ or ‘Prospect Bay’? Or, if you’re looking for homes within a particular school zone, you can search by school name too, such as ‘Broadneck Elementary’! Lastly, you can also narrow your search results even further, but using the polygon drawing tool on our map view, and outline a specific area you’d like to look in. Of course you will then choose what you’re looking for – a single family home or townhome, with your minimum number of desired bedrooms and bathrooms, etc….
Showings! Your search results have come up with 5 options you really like – let’s go look at them! We suggest seeing no more than 5 homes in one day so as to not start getting the homes confused. You can nickname the homes like “gorgeous waterfront home in Prospect Bay” or “cute colonial close to Forte Meade” to help you remember what you’ve seen. And it’s always a good idea to jot down some notes to keep it all straight as well.
Offer! Yay! You’ve found it – you’ve found the house you’re looking for! So let’s go ahead and put in an offer. Your agent will give you a suggestion for an offer based on a comparative market analysis that they will do comparing similar homes that have sold in the area within the past 6 months. They’ll do adjustments for any upgrades, or lack thereof also. Remember, if you’re asking the sellers to pay your closing costs, that’s that much less they’ll be netting, so you need to ensure that your offer is fair. Providing everyone’s agreed to all the terms of the contract, such as price, home inspection time frames, settlement date, etc., you are now officially under contract!
Loan Application: Once you are under contract, your lender will submit a formal application based on the details of the property such as purchase price, annual property taxes and other associated fees such as HOA dues. At this point, they will also request that you submit supporting documents such as pay stubs, bank statements and any other documents they may need.
Costs: A few out of pocket costs that you will incur along the way are as follows:
– Earnest Money Deposit – when making an offer, you will be required to give the sellers a deposit in good faith so that they know you are serious about your offer. You will get this money back however – especially if the seller has agreed to pay your closing costs – or it will be applied to your closing costs at settlement.
– Appraisal – appraisals are the bank’s version of a comparative market analysis. The bank wants to ensure that the money they are lending you is secured by the property, therefore they need to ensure that the property is worth what you offered on it.
– Home Inspections – We always suggest having a home inspection done! This will give you insight on issues that the home may have, and allow you to ask the seller to fix these issues before keys change hands. Aside from a General Home Inspection, there are other inspections that may be necessary as well, such as chimney, well & septic, lead-based paint, and termite, just to name a few. You will have a timeframe to get all these inspections done, and each inspection is the buyer’s choice and expense. (With a VA and FHA loan, the seller is responsible for paying for the termite inspection.) The Riffle Group is always happy to recommend qualified home inspectors.
Title Company/Home Inspection: You may choose a title company or home inspector yourself, or you may enlist the help of your agent in referring you to one that they’ve worked with in the past and trust. We’ve touched base on home inspections above, but what does a title company do? A title company essentially insures that the title on the home is clean, and prepares the documents for settlement.
Settlement! It’s been a few weeks, and all has run smoothly with the aid of your awesome realtor, lender, inspectors and title agent! 😀 Depending on the time of your settlement, you may do your final walkthrough the morning of, or the night before. Now it’s time to meet at the settlement table. Don’t forget to do some finger exercises and stretches the night before as you will be signing A LOT of documents!
The Keys! Congratulations! You’re a homeowner! See, I told you it was easy. Now pop open the champagne and celebrate! 🙂