First Time Home Buyers How-To

    So you are ready to buy a home? Now what? The most amazing way to  go about the home buying process is to hire an amazing realtor. One of the best ways to find an agent is to call Real Estate by Design! We have an amazing team and can hand pick the perfect agent for you. Careful consideration is given to each client/agent pairing! First you will secure a lender for your loan. You will find out what amount you are approved for based on your income, credit score, length of employment, and debt to income ratio. Next, you’ll come up with a dream list of what the perfect house means to you. You’ll want to think of schools if you have school age children, square footage, number of bedrooms, and location. Once your agent has found the perfect home for you, you’ll have a lot of questions!

    The first question I want to know is if the house is priced fairly. Your agent will produce a list of comparable homes and what they have sold for in the current market. Once you have decided on an offer, your agent will write up an offer and submit it to the seller. The seller will either accept your offer or counter back with an offer. Once you and the seller have agreed on a sales price you will go into contract. Your agent will write a contract to include an option period. The typical option period is seven days. You will write a check to the seller with your option fee. Typically this will be in the $150.00 ballpark. If you choose to terminate the contract during the option period you will forfeit the option money. You will also write a check for earnest money. This is typically 1% of the sales price of the home. You will receive your earnest money back if you terminate within the option period. If you terminate the contract after the option period ends you will forfeit your option money and earnest money to the seller.

    During the option period you will want to have your inspection done. An inspector comes to the home and looks for anything that needs to be repaired. You will receive a report of any findings that the inspector has, and can request that the seller makes these repairs. It is important to have your inspection done within the option period in the event that the inspector finds something that is a deal breaker for you moving forward. Your agent can suggest inspection companies that they favor. If you move along with the contract your earnest money will go towards the purchase of the home. Your lender will order your appraisal, which will tell you what the home is worth. If the home does not appraise for what the sales price is, you can either terminate or you can negotiate with the seller on the listing price. If you terminate, you will receive your earnest money back in the event that the home does not appraise.

    Once the home has appraised, or the price has been lowered to match appraisal, you are ready to move on. I suggest finding out which utility companies you will be using and calling them to set up appointments to connect service. Your agent can get you a list of utilities from the seller. Closing costs are due at the time of closing. This includes your title, lender fees, your first year of property taxes and homeowners insurance, an escrow startup, state fees, title company fees, and lender fees. You will also bring your down payment. Next comes the exciting part! It’s closing day, which is the day you sign for your new home! This is typically thirty days after going into contract. You’re closing costs will be determined by your lender. You will sign closing documents and become a new homeowner! Typically your first mortgage payment is due a month after you close. Congratulations you are a new homeowner!

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