Buying a house is one of your most significant investments you will make in your lifetime. The process can be intensely emotional both with the highs and lows!! The buying process can be intricate, particularly for first-time home buyers. Working with an excellent agent who can guide you through the simple six steps to home buying is the best way to ensure the process is a success.
There are two phases of the home buying that include six simple steps. There is the before contract and then the under contract: LET’S BREAK THAT DOWN!
Phase 1: Before Contracts
Step 1: Educational Meeting
This step is crucial when buying a home. When we are done you will know Denver’s housing market, understand the national market, and discover what to expect when buying a house.
Things We Cover:
- The steps of buying a house: I will take you through the steps involved from lending to keys.
- Documentation: We will chat about the essential documents needed for a seamless transaction.
- Q&A: I will answers the questions you have about the process of buying a house.
- Establish your needs: We will chat about criteria for your home search. discuss timeline and motivation to buy.
Step 2: Get Pre-Approval
Pre-approval is an express commitment by a lender for a specific loan. The lender verifies your credit history and income once you apply for a mortgage. Once they know more about your financial and credit profiles they give you a letter outlining your qualification details. The pre-approval, if often times, good for 45 days! So it is time to get out shopping.
Lenders may work you through different mortgage options before you get pre-approved. These mortgage types are:
- Fixed-rate mortgage: You pay uniform interest.
- Adjustable-rate mortgage: You pay varying interest amounts.
- Government-insured loans: The government supports these loans. They offer perks, such as VA loans for veterans, low down payments via FHA loans, and USDA loans.
- Conventional loans: The government doesn’t back these loans. They follow guidelines set by Freddie Mac or Fannie Mae.
Through many conversations you and then lender determines the best mortgage option for you based on your goals and qualifications. You may get several pre-approvals from lenders. Pre-approvals show sellers that you are a legitimate, qualified buyer.
Step 3: Writing Offers
Once you find a house that you like we get ready to make an offer. The offer’s amount can also change with developments in the real estate market and the house’s time on the market. As your agent I will always provide you with options for offers based on the information I acquire from the listing agent. In fact, here is another article of 4 Things to Get Your Offer Accepted!
I will draft the official purchase document. The agreement should include your mortgage details, contractual terms, and the offer’s validity period.
Phase Two: Under Contract
Step 4: Pay Earnest Money
You deposit earnest money (EM) as a show of good faith. It is your way of showing the seller you are committed to moving forward and meeting at the closing table. The amount of EM is normally between 1-2% of the purchase price, but can vary outside of that amount.
The EM amount remains in escrow until closing, and the parties can apply it to the buyer’s closing costs or down payment.
As an agent I will protect your earnest money through these steps.
1. Ensure reliable third-party handles the deposit.
2. Understand and follow the contractual terms.
3. Include the contingencies for inspections and financing in the contract.
Step 5: Safety and Security
You’ve completed the time-consuming parts of purchasing a home when you get to this step. It is time to ensure you are getting ready to move into a safe home and that your investment is a sounds investment. We do that through two procedures.
- Home inspection: This process helps you discover repairs and potential issues. The inspector and myself will guide you on all the essential assessments including roofing, sewer, radon, structural, electrical, HVAC system and anything else.
- Home appraisal: This step helps you pay the home’s fair value. The agent guides you if the appraisal’s amount is over or under the offer price.
Step 6: Closing
Once everything is in order, you sign documents and get the keys to your new home. Before we sit down at the table we do a final work-through of the house to ensure the seller met all the contractual terms. You ensure the down payment is ready to go and bring your biggest smile!!!!
These six steps are general steps, and they can vary with a transaction. I am so excited to help you find that home and with these six steps the process will run smoothly!!
Cheers,
