Do you want to know how to buy a home? Fantastic, you are in the right place! The Forney Group has put together a short video breaking down the process into 12 steps that take place on the journey to homeownership. Watch the video now or read the transcript below if you aren’t a millennial
Welcome to the Forney Group’s How to Buy a Home Video. In a few minutes, you will have a complete overview of the home buying process and what to expect during each stage of the transaction.
1. PRE-APPROVAL The first step is to get a pre-approval letter from a reputable lender. This process will educate you on available loan products and determine how much home you can afford. Ask your Forney Group agent for lender recommendations.
2. HOME SEARCH Together, we will start looking for your new home. Most buyers start their search online, but a knowledgeable Realtor is essential to the process at this stage. Realtors have direct and immediate access to market information through the Multiple Listing Service. Often what you see online is yesterday’s news, your agent can tell you what is happening right this minute.
3. MAKE AN OFFER Once we’ve found the right home, it’s time to make an offer. There are several parts to an offer that need to be taken into consideration. Your Forney Group agent will guide you through the contract, ask the important questions and put an offer together with your best interests in mind.
4. NEGOTIATE When the offer is presented to the sellers, they will respond in one of three ways. They can reject, counter or accept the offer. If the offer is countered, the buyer and seller will continue negotiating towards acceptance.
5. EARNEST MONEY Once the offer is accepted, the buyer needs to deliver earnest money to the listing brokerage immediately. Earnest money is a negotiable term on the purchase agreement, but in general, the amount will be roughly 1% of the final purchase price. The listing brokerage will deposit the funds into an escrow account to hold as security. This money will ultimately be applied to your closing costs at the end of the transaction. Keep in mind that these funds will not be available to you until closing, which may be 30 or more days away, depending on the type of financing and contract terms.
6. START LOAN Next, the buyer will contact the lender to start processing the loan. The lender will need a copy of the purchase agreement as well as numerous financial documents such as pay stubs and tax returns. Getting the loan is the most time consuming step to buying a home and the main reason closings are delayed. As the buyer, make sure you get the lender everything they need as quickly as possible to prevent unnecessary and costly delays.
7. INSPECTIONS In addition to starting the loan, the buyer will schedule a home inspection. It is important to schedule the appointment right after the offer is accepted to make sure there is time for the inspector to view the home, complete the report, and for the buyer to request any necessary repairs.
8. REPAIRS If repairs are needed, the buyer will submit an inspection response form to the seller. Similar to the offer negotiating step, the seller can reject, counter or accept the buyers’ request. At this point, the buyer and seller are going through another round of negotiations, specifically to address repairs. Your Forney Group agent will advise you on how to successfully navigate this stage of the transaction.
9. HOMEOWNERS’ INSURANCE The next step is to get homeowners’ insurance. Lenders will require proof of insurance in order to issue the loan but it is a good idea to have homeowners’ insurance regardless of the circumstances. A good insurance agent can put a quote together with a copy of the listing sheet and some general details from the purchase agreement.
10. APPRAISAL Another part of the loan process involves getting an appraisal of the home. By this point in the transaction, the lender will have already ordered the appraisal and the appraiser has delivered the report to the lender. The appraisal determines the value of the home to ensure that the lender isn’t loaning more money than the home is worth.
11. FINAL WALK-THROUGH Now that repairs have been completed, the home has appraised, the loan is ready and the seller has moved out, the last thing to do is to close… but before we head off to the closing table, your Forney Group agent will do a final walk-through of the home with you. We will verify that all the repairs have been made and that no significant changes have occurred from the day the offer was written.
12. CLOSING Finally, it is time to close the sale! In most situations, a title company is responsible for conducting the closing. The title representative will guide the buyer and seller through all the paperwork to finalize the sale. Once all documents have been signed and funds have been transferred, the sale is complete, and you are the proud owner of your new home.
Congratulations, you now know how to buy a home! Thank you for choosing the Forney Group to represent you with your next purchase. If you have not been in touch with us or still have questions about the process, we’d love to hear from you. Catch us on Facebook, visit our website, give us a call or send us an email.