Typically it is a fairly straightforward process.
First, you need to talk with a local lender to see what you qualify for. Just because you want a house doesn’t mean you will qualify for one. Get your ducks in a row and get pre-approved. Contact me for some good local lenders.
Then we grab a cup of coffee at one of Salem’s many choices in coffee houses and talk about what it is that you want and need. From there…the search begins…
After we find what you are looking for, we write up our nice 8-page long real estate contract with whatever addenda we might need. The offer gets presented and then it will be accepted, rejected, or countered.
Once an offer is accepted, your earnest money deposit goes into escrow. Earnest money is typically 1% or so of the purchase price. You can wire this directly into escrow or write a check.
Then the inspections are set up. This can be a full home inspection, radon testing, mold testing, well testing, septic inspection, lead paint testing, and whatever else the buyer would like to do. Once the buyer has satisfied themselves with the condition of the house, the transaction moves forward.
The mortgage broker/lender orders an appraisal. The appraiser determines the value of the home. As long as the home is deemed to be worth the agreed-upon sales price then things can move forward.
From here, all of the documents, including an insurance binder, are sent to the underwriter. The underwriter reviews all of the documents and decides if the buyer meets the criteria for the loan. This is called UA or Underwriter Approval. If a buyer is said to be DU, then they have been approved by the Fannie Mae Desktop Underwriter system.
If the underwriter gives final approval, then loan documents are written and sent over to the title company. The title company creates the HUD statements (the Final Settlement Statements). They set up a time for you to go in and sign the documents.
About 24-48 hours after both the buyer and seller have signed, the documents get recorded at the county, and the house is YOURS.
Sounds pretty easy??
It is as long as things go according to plan, but unfortunately, things do always go according to plan so…here is what I do to help first-time home buyers.
- Give you some home-buying education over great local coffee. I haven’t tried French Press out yet, so I need a first time home buyer to contact me…my treat!
- Help you prioritize what you want and find the right property.
- Help you write an offer that makes sense for you.
- Help you through the negotiations
- Help you arrange inspections
- Review your closing and title documents with you.
- Help you decide if this is the right time to buy a house, for you…no national campaigns here, just does it make sense for you.
A home is a large financial purchase. Get educated about the process and homes. Homeownership is not for everyone (did I really say that as a real estate agent???), so let’s talk and see if this is the right choice for you.