How to purchase home
Learn about purchase process, understand how home buying works, and shortcuts on how to get the best transaction possible.
The steps to get home financing for the next house your looking to buy is the first question you should ask
yourself. Getting yourself home is the next to last. Through the information contained here, we will help get you started to purchase the house of your dreams. In a nut shell, here are the steps
we will cover.
1. Getting ready to get a loan
2. Apply for a loan
3. Find representation / Find home
4. Make offer
5. Execute contract
6. Get loan funded
7. Close on your home
8. Get your keys
Getting familiar with these 8 steps is how to make one of the most stressful experiences people go through, especially
the first time, a little easier.
Before we proceed, it is important to note that before getting started in the purchase transaction,
keep your head clear, try not to get emotionally involved and just deal with
each situation as it arises. Allow people involved in your transaction to do the work they are paid to do
and stay calm through the entire process. This will make your experience much
better, and increase the probability of it working out in your favor. Always stay positive and keep your mind
clearly focused on your intended goal of moving into your new home. See it clearly and
handle any situation that could arise with the knowledge and insight that this is going to work out!
We will briefly cover the details of each step.
1. Getting ready to get a loan
Locate and put together all the documentation you can regarding your income. For best scenario, locate your most
recent pay stub(s), and last 2 years worth of W2 statements. If this
proves challenging or your not sure if this will afford the home you want, then visit our additional
information section about income needed to qualify. Identify, the past 2 years worth of employment history including name,
address, phone of employer, and the exact date and position with that employer.
Locate statements for all assets including 401k, Retirement, Stocks, etc. Get your last two months worth of
bank statements which show any down payments or at least 2 months worth of the projected payment amount in the account.
Make a enlarged, legible copy of your drivers license or other legal form of Identification.
Create a derogatory credit letter to explain any problems which appear on your credit report.
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2. Apply for a loan
The next stet is to apply for a loan in order to get a pre-approval. If your working with a real estate agent,
he or she may be able to point you in the right direction. Alternatively, you could use this Website and find mortgage lenders in your area to help you
get financing to purchase your new house. Either way, get a loan!
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3. Find representation / Find home
We do suggest using a real estate agent if possible. You would not go to court without an attorney, so don't get involved in a
legally binding purchase transaction with out adequate representation. Try to avoid using the agent you see posted on the sign in front of the
house you would like to buy. Instead, ask your friends and family who they recommend, or visit a local agency in your area. You really want your own representation
who is only looking out for your best interest. Using the sellers agent is ultimately a conflict of interest.
With your approval and real estate agent in hand, go shopping!
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4. Make offer to purchase
Once you locate the home you would like to buy. Your agent will complete a purchase contract and offer to buy. The realtor will then submit this to the sellers agent for seller approval. If you want the home, make a fair offer, don't ask for the moon.
In your contract, only ask for the items you need to successfully move into the home. Help yourself increase the probability of the seller accepting your offer by making it something he will more than likely accept.
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5.
Execute purchase contract
If the seller accepts the offer first time around, great! If not make any neccessary changes to offer which both you and the seller will agree on.
After what is called " acceptance of contract ", you will move then to execute contract. This entails
a. Meeting all financial terms of contract
b. Opening escrow and depositing initial good faith money ($500 - $1000)
b. Getting home inspected from qualified inspector
c. Getting home appraised, which will be ordered by mortgage lender
d. Satisfying items require to be paid or taken care of by buyer or seller.(spelled out in contract)
e. Finishing or "Closing Escrow"
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6. Get loan funded
To officially "Close Escrow" you must get your loan funded and the ownership of the property be transferred from the seller to you. So having your
pre-approval before hand helps to ensure that your loan will actually fund. Having all your paperwork before applying for the loan will make the whole process go smoother. After the lender signs off on your loan completely, they will issue a "Wire Transfer" for the loan proceeds. The funds will arrive at the escrow or attorney office usually within 2 - 24 hours. A escrow agent, or real estate settlement
attorney will handle the closing and the transfer of ownership so this is not something you have to be overly concerned with.
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7. Close on your home
Once all the funds from your loan have been disbursed or paid to the people that require payment. The escrow agent or attorney will then record the
neccessary legal documents and transfer of ownership with the county recorders office. Once the agent gets confirmation that all items have been successfully recorded, then there is just one more step.
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8. Get your keys
In what is usually 24 hours after the loan funds and/or the following morning after successful recording you will be notified by the title agent or your realtor that you may pick up your keys. This is the most exciting part of the whole process and if you had your ducks in a row before hand, and kept a cool head. Than this will be indeed a wonderful experience and we wish you the best of luck.
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