The Buyer
Generally Pays for…
- Title Insurance Premium for Lender’s Policy
- Escrow Fee (50%)
- Document Preparation (if applicable)
- Recording Charges for all Documents in Buyer’s Name
- Termite (according to contract)
- All New Loan Charges (except those paid by seller)-Government Loans
- Interest on New Loan from Date of Funding to 30 Days Prior to First Payment Date
- Assumption/Change of Records Fee for Take-over of Existing Loan
- Inspection Fees (proper inspection, roofing, geological, etc.)
- Fire Insurance Premium (1st year)
- Next Month’s HOA Fees(s)
11 Simple Steps To Buying a Home
A Step By Step Look at Home Buying
The specific way you progress through a home buying
transaction varies depending on the real estate laws and customs where you live,
but there are many home buying steps that are standard, even though they might
not be accomplished in the same order in every location.
You'll feel more confident about your home buying journey when you understand
what is required of you and every other person who is involved in the
transaction. This guide takes you through it, and shows you that you're only 11
steps away from buying a home.
Step 1, Get Your Finances in Order
Your credit reports are an ongoing look at how you manage your finances. You
must know exactly what your credit reports say about your financial history
before you apply for a mortgage, because the reports play an important role
in the mortgage approval process and in determining the interest rate and other
loan terms that a lender offers you.
If you haven't looked at your credit reports, you might be surprised at their
contents, because errors are common.
Step 2, Get Familiar with the Mortgage Industry
Finding the right loan and lender is crucial to your home buying success.
It's up to you to determine which lender is best for your
needs, and it's always a good idea to have at least a bit of background about
the loan process before you talk to a lender.
Step 3, Get Pre-Approved for a Mortgage
Do you know how much house you can afford? Probably not, unless you've talked
with a lender.
Pre-approval helps you in other ways. Consider this scenario. A home seller
gets two similar offers. One is accompanied by a letter from the buyer's bank
that states she is pre-approved for a mortgage in the amount of the offer. The
other has no supporting documents. Which offer do you think the seller will
consider first?
Step 4, Determine Your Wants and Needs
Buying a home isn't as difficult as you might think, even if you're short on
funds, but the process will go a lot smoother if you get familiar with your real
estate market and narrow down your wants and needs before you start looking at
houses.
Step 5, Learn to Work with Real Estate Agents
Real estate agents represent buyers, sellers, or both--and in some states
they can work as neutral facilitators for either party. It's essential to
understand agent duties and loyalties before you make that first phone call.
Step 6, Start Searching for a Home
Your agent will give you multiple listing sheets to study. I'm sure you'll
also pick up House For Sale magazines and read classified ads in your local
newspapers. You'll probably spend time surfing the Internet for homes. You might
even plan an afternoon drive or two to preview neighborhoods. Those are all
excellent ways to see what's available. Here are some tools to help you narrow
your home buying search.
Home Buying Search Tools
·
Consider the Houses that Others Overlook
·
It’s Time to Find Out What’s Out There
·
Search Public Versions of Multiple Listing Service Web Sites
·
Find Real Estate Agent Web Sites
·
Browse Real Estate Search Engines and Networks
·
Find For Sale By Owner Properties
·
Look at Print Magazines
·
Find Foreclosed Homes
Step 7, Handle Pre-Offer Tasks
Deciding whether or not you want to buy a house involves a look at its
structure and its features, but there are many other topics that are every bit
as important to your purchase.
Things to keep in mind
·
How’s the Resale Potential?
·
Contract Contingency Basics
·
What Kind of House Is It? Site Built, Modular, Manufactured
·
Do Others Have a Right to Use the Property?
·
Can You Live with the Deed Restrictions?
·
Is the Reported Square Footage Accurate?
·
Is the Heating System Efficient?
Step 8, Make an Offer
There's no one set of instructions that can cover all the differences in real
estate laws and customs that exist throughout the United States, so the
mechanics of making an offer and its specific contingencies depend greatly on
your location. However, there are some home buying tips that can help you
fine-tune your offer, no matter where you live.
Things to keep in mind
·
What Comes With the House? Contract Considerations
·
What Should the Seller Disclose?
·
Determine if Lead Paint Disclosures Are Required
·
Decide How Much to Offer
·
Asking for Possession Before Closing
·
Special Considerations for For Sale By Owner Purchases
Step 9, Home Inspections and Other Tests
In some states, home inspections are accomplished before the final purchase
contract is signed. In other states, inspections take place after an offer is
finalized. No matter when you do them, it's critical to decide which inspections
and tests you want to perform.
Talk with your real estate agent or other advisor to find out when
inspections should be handled and if additional types of testing are important
for your specific area.
Things to keep in mind
·
Order a Full Home Inspection
·
Testing for Radon Gas
·
Looking for Molds and Mildew
·
Lead Paint Disclosures & Inspections for Pre-1978 Homes
·
Is There a Private Well on the Property?
·
Understanding and Checking the Septic System
·
Tenting to Eradicate Wood Destroying Insects
·
Should You Buy a Home Warranty
Step 10, Avoiding and Correcting Last Minute Problems
As your closing date nears,
everyone involved in your real estate transaction should check its progress on a
daily basis, because staying on top of things means you'll know immediately if
there's a problem that must be dealt with.
Step 11, You're on the Way to Closing
Most of your home buying problems are behind you now and you're on your way
to closing, also called settlement, the event that transfers ownership of the
property to you. Just a few more things to learn, a few more things to do, and
you're there!
Closing Thoughts
The steps outlined in this article are a general home buying guide. You will
encounter issues specific to your location and your transaction, issues that can
best be explained and handled by your local real estate agent, your lender, your
attorney, your closing agent, or others who are helping you complete the home
buying transaction.
Never hesitate to ask questions. Ask as many questions as necessary
to help you understand the entire home buying process. You are making a
long-term commitment and spending a major amount of money--you'll feel much
better about the transaction if you stay informed and understand what's
happening every step along the way. Home Buying Advice that Helps Put You In a
House
First time homebuyers might feel better to know that
they're not the only ones who feel confused about the home buying process.
Nearly all homebuyers feel the same way, even if they've bought a house in the
past, because it's easy to forget the steps you took to get into a home once the
event is behind you.
Get Prepped in Home Buying Basics
Before you begin, get educated about the home buying customs where you
live. Relatives or friends who live in another state might have some good
general advice for you, but chances are the process is very different in their
area, so avoid the mistake of relying solely on their advice to make important
decisions.
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