You've taken my advice! You've been prequalified by a lender to buy a home, you've researched communities and figured out where you want to live, and we've found you your dream home! So now that you've found your new home, what happens next? Let's take a look at how you go from finding your home to owning it!
Step Two: Make an offer
Making an offer on a home can be tricky. You don't want to pay too much, but also don't want to lose your dream home. What do you do? There are three ways you can make sure you're not paying too much for your new home, and you can find out what they are here.
You've looked at comparable sales I've shown you, and now you've arrived at a price you'd like to offer. We've also talked about when you would like to close on your new home, how much money you are putting down (and when the deposit money would be due), and any other considerations that need to go into the offer. I will write the offer up based on what we discussed, and we can either get together to sign it in person, or I can send it to you electronically for you to sign.
Once you have signed the offer, I will present it to the listing agent. The sellers may accept your offer, reject your offer, or make a counter offer. Most times, you can expect a counter offer, unless you've come in really strong. If we are able to come to terms everyone can agree on, I will revise the contract and send it to all parties to be signed.
Step Three: Attorney review
Once we have a signed contract, you have the right to have that contract reviewed by an attorney. Since this is most likely the largest financial transaction of your lifetime, you want to have an attorney who can make sure your legal rights are protected. While we have three days to get the contract into an attorney's hands to begin the review process, attorney review can last as long as it takes to work out the terms. While some can go weeks or even months, most attorney reviews last three to five days.
Attorney review is one of the three hurdles to buying a home. During attorney review, either party may cancel the contract for any reason. If you find a home you like better during attorney review, you can cancel the contract. If the seller finds another buyer with more money or better terms, they can kill the deal and take the other offer.
Once attorney review is completed, you are considered "under contract" - you have a binding contract of sale. If the sellers get another offer for more money and better terms, they can't take it, because you now have a firm contract with them.
Step Four: You're under contract!
Now that you're under contract, a number of different things start happening. Second deposits are due (and first deposits, if that's how the offer was written up), and you will meet with your lender to begin the mortgage application process. Your attorney will be taking care of things behind the scenes, such as ordering a title search.
You will also have an opportunity to have a home inspection. The home inspector will inspect the interior and exterior of the home, and will be able to give you a better idea of what shape the home is in. They will also conduct a wood destroying insect inspection (for termites, carpenter ants, etc.) and can test for radon (radon is an odorless, colorless gas that is produced by depleting uranium in the ground. It is believed to be a carcinogen.). A typical home inspection will take two to three hours, depending on the size of the home.
Your home inspector will give you a written report of their findings. You can review it with me and with your attorney, and then decide if there are items you would like addressed by the seller. Your attorney will write a letter to the sellers' attorney with your request. You can ask for things to be repaired, or you can ask for a credit at the closing so you can take care of the items yourself.
The home inspection phase is the second hurdle to buying a home. Since the seller is under no obligation to make any repairs, and you are under no obligation to proceed with the sale if you are not satisfied with the home or with their response to your request, the deal can fall apart. Typically, we are able to work things out, but contracts do get canceled.
Step Five: Your mortgage commitment
The third and final hurdle to buying a home is a part of the contract called the mortgage contingency clause. This is the date by which you have to have your mortgage commitment from your lender, typically a month after you are officially under contract. If you do not have your mortgage commitment by this date, either party can cancel the contract. This is why it is so important for me, as your agent, to keep track of these dates and make sure everything comes in on time. If there is a delay, your attorney can send a letter to the attorney for the sellers requesting an extension. In most cases, though, the lender is able to get everything together on time.
Step Six: Clear to close!
Once the bank has everything it needs, and they've put your loan through underwriting (these are the people that check everything and make sure the bank is prepared to give you a mortgage), you will be clear to close. This means that you are ready to head to the closing table and buy that house!
Before the closing, you have the right to a final walk through, either the day before or the day of the closing. This is an opportunity for you to make sure the home is in the same condition as when you first toured it, that nothing was damaged while the sellers were moving out, and that nothing else has happened to the house since you were last in it (like the basement flooding). Some buyers take a quick look through the house to make sure it's still standing, while others turn on appliances to make sure they're still working. The choice is yours.
If everything is to your satisfaction, you head to your attorney's office at the scheduled time, sign a ton of papers, give your attorney the remainder of your deposit money, and the house is yours! You're officially a homeowner!
Step One: Let's talk!
You may have noticed that the list of steps began with step two. That's because the first step in buying a home is putting a plan together so you can get exactly what you want without a lot of stress along the way. Call me at 908-705-5110, or email me at mark@MoveMeMark.com, and we can set up a time to speak about what you're looking for, and how we can get you there! And don't forget, you can start your search for a home by registering on my website. Home listings are updated every five minutes, and homes matching your criteria will be emailed to you automatically. You can get started by clicking here. Best of luck with your move!