Buying a piece of real estate for the first time can seem pretty overwhelming. There are so many things going on, with so many individuals involved. It’s easy to get lost in figuring out what comes next in what seems like a long and complicated process. This article will explain how it all goes.
#1. Loan Limit Pre-Approval
Get yourself preapproved for your loan. This will involve filling out forms listing your assets and income. When you get your pre-approval, you will know how much you can budget for the purchase.
#2. Home Search
Early in the process, start looking at homes. It is good to begin the process already having defined what it is that you actually want.
#3. Identify Home
When You find the ideal place, you’ll know it. The right place for you could be the first one you find or the fortieth.
Before you make an offer, put some serious thought into it. Learn what properties in the neighborhood are selling for. Make the seller a fair offer — too little and you could risk alienating them, too high and you would be paying more than you should. According to about.com, when you make an offer, you will need to put up a small percentage of the asking price in earnest money. Your offer should cover terms and contingencies in addition to price, such as inspection, any required repairs, and the closing date you want.
After some negotiation, you and the seller will agree to the particulars of the deal.
#6. Review of Title
A title review, in most states, is usually done by an attorney who researches the title, or ownership history of the property, and gives a formal opinion as to whether the seller’s title is clear and meets the contract to which you have agreed. In some states this is done without the services of a lawyer but almost without exception there is a requirement for some kind of title search and getting title insurance.
Never buy a home without having it inspected. An inspection can reveal problems that could be significant, from a leaky pipe to deteriorating foundations. If the inspection does find problems, you will discuss and agree on the cost of repairs.
#8. Getting an Appraisal
An appraisal offers a professional estimate of the property’s value. Your lender will not be able to lend you more than the appraised value of the property, so if the appraised value comes back below the agreed selling price, your deal is in trouble. Possible solutions include your adding in the difference additional cash, the seller agreeing to lower the selling price to meet the appraisal amount, or requesting a second appraisal. This subject has come under increased scrutiny and regulation in recent times, so be cautious on the matter of dueling appraisals.
#9. Final Loan Commitment
The lender reviews the files and approves your loan.
#10. Buyer’s Final Inspection
The final walk through inspection is scheduled shortly before closing. During the walk through inspection, you have the chance to assure yourself the property is in the condition you agreed to purchase it in — that all repairs that the seller has agreed to do have been completed, and that the property has not been damaged since you agreed to buy it.
Closing is the transfer of title of the property to you, the buyer,. You will be expected to hand over the agreed down payment and any closing costs. Before the day of the closing find out exactly how large a check you’ll need to have on hand.
That’s it! You’ve made it. Once you’ve accomplished those few steps, you’ll be the owner of your new Bellingham dream house.
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