Buying a house is one of the most important decisions anyone makes. For most people, this is the single largest investment made over the course of a lifetime.
Making it the best decision is essential. To do this, individuals need to work closely with their lender as well as their real estate agent to ensure every step of the process goes well.
There are a few key areas to consider when it comes to finding a home or making an offer.
Secure Lending First
One of the first steps any home buyers guide should offer is that the home buyer needs to obtain a loan first. Before starting to look for a home and most certainly before placing an offer, the buyer needs to have a mortgage loan in place. There are several reasons for this. Most importantly, it ensures the home buyer never buys a home outside of his or her budget goals.
It also can help to make the borrower more attractive to the home seller. If a person is pre-qualified for a loan, this can speed up the process of closing on the home.
Finding a Home
It tends to be beneficial for home buyers to work with a licensed real estate agent that knows the area well. It does not cost a home buyer anything to do this since the seller pays the commission to the buyer’s real estate agent. However, an agent can help individuals to find homes that fit their budget and their qualifications.
Agents can help buyers to locate a variety of homes to potentially purchase. This process includes providing helpful information and insight into the homes available, the risks of any home, and the true worth of any property. Once an individual finds a home, they wish to purchase, the process of placing an offer begins.
How to Make an Offer on a House
Placing an offer on a home is a legally binding contract. This means that the home buyer is required to do as they promise within this contract. To learn how to make an offer on a house, work closely with a real estate agent. The agent handles the actual completion of the contract. This will include listing out the specific requirements of the sale.
Contingencies, as they are called, give the home buyer a bit of flexibility. That is, the home buyer agrees to make the home purchase if certain stipulations are met to do so. This generally will include the home passing a full inspection.
It may also include a contingency to ensure the home loan goes through or the sale of an existing home happens first. Time limits are also a component of many stipulations in a home offer.
Once an offer is placed, the home seller has the ability to agree to the terms, reject the offer altogether, or negotiate the terms of the contract. This can go back and forth for some time until both parties are in agreement with the details. Sometimes, it takes just one offer to make this happen.
Once the Offer Is Accepted
Once the seller accepts the offer, buying a house becomes a reality. That is the individual works through the legal process of changing ownership. The first step is generally a full home inspection. Some lenders, such as those providing FHA, VA, or USDA loans require a full inspection.
This process will include steps to deal with any concerns within the home, such as with moisture or safety concerns.
After the house inspection, the lender goes to work to complete the loan process. The application is sent to the loan’s underwriters. This is the team that works to verify all information about the buyer as well as the home. They must then make the final decision to approve the loan to purchase the home.
Closing on the Home
After this step, the lender then works to close the deal. A title agent will clear the title, which is a process that ensures no one else has a legal claim to the home. Then, the title agency meets with the home buyer to sign the contract for the loan.
This closing process can take about an hour. The agency reads through all documents and ensures that the borrowers fully understand the loan terms. Once signed, the documents are processed. The payment from the lender is made to the home seller.
This is a very basic home buying guide. Various steps can happen in between these steps. However, those who work closely with a real estate agent, a real estate attorney, a title agency, and a lender will find the process is not difficult to go through.
Most homes can close within 30 to 60 days of an offer being placed, sometimes sooner.