Congratulations! You’ve done your research, you’ve saved for a down payment, and you’ve found that one special house that you can call home. It’s the one, but what is the next adventure you are about to embark upon? What are the nitty-gritty details that make up the process of becoming the new owner of that home?
First, with the help of your realtor, you need to make an offer to the seller. Your agent, who will be familiar with the competition and other critical factors in coming up with the right offering price, will guide you in the right direction. Your agent will provide the official document that you will sign in order to make an offer. When you hear back from the seller, he/she will either agree to your offer, decline your offer, or make a counter offer. Then, the ball is back in your court. Your agent will keep you informed, usually hour by hour, of the communications regarding you and the seller.
Many times, especially if the house is older, you may request that a professional home inspection be provided. As a result of the home inspection, there may be problems that you would like addressed as part of your agreement. For example, the inspection might reveal a major issue, such as an aging roof. In your offer, you could ask that the roof be repaired or replaced, or that the offer price be lowered with consideration to the price of a new roof in the near future.
When you and the seller come to an agreement on the price, (and any other special requests your realtor has of the seller), he/she will notify you that your offer and any contingencies are agreeable and you have a deal!
At this time, you will sign the purchase agreement and you will be “under contract” to buy this house. You will need to make an earnest money deposit to the seller that will be in safe-keeping with an escrow company. This deposit is to show that your offer is in “good faith” and will be held during the lending process. If you change your mind about buying this house, the seller will be able to keep, in most cases, your earnest money deposit. When you sign final papers, you can use your earnest money toward your down payment.
Next, you will take your purchase agreement to your lender and sit down and fill out a mortgage loan application, which is lengthy. You will need proof of employment, income, debts, savings, etc. Your lender will pull your credit report, probably from all three credit reporting agencies. This application will proceed to the underwriter for the lending company, and you will be notified if your application was accepted. Once approved, final papers will be drawn up for closing.
Most often, you will next have an appointment with a closing agent at a title company that has ensured that you are buying a property that can lawfully be sold. Additionally, they will check that the title to that property is clear. At this appointment, you will spend about an hour reviewing the closing documents with a closing agent, signing papers, and giving a cashier’s check for the down payment. At the end of this appointment, you will have just purchased your house! But wait for it… You will need to wait between one and three days for the purchase to be recorded in the county, and then you can finally pick up your keys! The best part is that you won’t have to make the mortgage payment the first month you move in to your new home, as that is included in closing.
Congratulations! You’ve just become a new home owner!