Important Home Buying Steps & Tips
- Mortgage Pre-qualification and Pre-Approval. Get Pre-approved first so that you’re able to confirm that sufficient Financing is available and so that we know which Homes are appropriate.
- If the purchase will be a Cash purchase, you will need to obtain a Letter of Qualification from your Financial Institution stating that you have the necessary funds (specific amount should be shown on the Letter—equal to the amount of your projected Home purchase) to complete the purchase.
- How much money do you have available for a Down Payment? At least 20% Down payment is typically required in our current market. The exception to this rule is for Buyers who are qualified for FHA Financing, which only requires 3.5% Down.
- How much money do you have available for the Deposit that’s required to be submitted when you place an Offer on the selected Home? This Deposit is also known as the Good Faith or Escrow Deposit and should typically be at least 2% of the price that's being Offered for the Home
- How much money do you have available to cover Closing Costs?
- Determine Housing Needs (Home Location, Type of Home, etc.)
- View Homes and select a Home
- Submit an Offer along with 50% of the "Good Faith" Deposit. If the Offer is accepted by the Homeowner, it will then become a Contract and you will submit the remaining 50% of the Deposit. This Deposit is usually equal to at least 2% of the Offer Price. Your Pre-approval Letter will be required to accompany the Offer.
- Order a Home Inspection (as the Buyer, you are responsible for paying for the Home Inspection—approximately $300.00 for Homes under 2,000 Square Feet)
- 4-Point Inspection is required for older Homes
- Roof Mitigation Inspection should be added to the basic Home Inspection—approximately $125.00 additional Cost. If the Roof is determined to meet specific standards and proof of this is submitted to the Insurance Company, you will receive a discount on your Home Insurance premium.
- The Lender (your Lender) will order an Appraisal and you are responsible for paying for the Appraisal—approximately $350.00). The Appraised value of the Home needs to equal at least the amount of your Offer (if the Home appraises for less than your Offer price, the Lender will not Finance your Offer price). If a Home appraises for less than the purchase price that you and the Owner agreed to, the Owner will have a choice of cancelling the Contract and not selling the Home to you for the Appraised price OR decreasing the original price that was agreed upon and selling it to you for the Appraised price.
- A Title Search will be ordered to determine if the Home’s Deed is clear and acceptable for purchase by a new Buyer (Title Search also includes search for appropriate Lot Surveys and Open Permits for work completed on the Home such as Remodeling, Repair, etc.).
- Home Insurance. I will submit requests for Home Insurance Quotes. You will then select one of your choice and the Insurance Company will prepare an Insurance Binder (payment for the Policy will be due at the time of Closing). If the Home is determined to be located within a Flood Zone, Flood Insurance will be required in addition to the basic Home Insurance policy. If purchasing a Condo, you will be required to Insure the interior/contents of your unit.
So, how should you estimate the amount of Home Insurance? Contact a Home Insurance Agent to provide a Quote for you. Home Insurance amounts vary significantly from one property to the next (factors that affect the amount of Insurance include, but aren't limited to, the Home's size, the Home's type of Construction, type of Roof, age of the Roof, its' location within a Flood Zone or outside of a Flood Zone, a Home's Waterfront location, the amount of Insurance for your personal contents within the Home, etc.)
- If the Home is located within an area governed by an Association (Homeowner’s Association or Condo Association), you will be required to apply for and receive Approval by the Association prior to occupancy (typically, most Associations require a face-to-face Interview as part of the approval process).
- Note that Lenders are now requiring Condos to meet certain criteria before they approve Financing for a purchase in the building. Some Buildings do not meet the criteria and, in most of those cases, Cash purchases are the only ones allowed.
- Note that if you're a Buyer who's approved for FHA Financing and you're planning to purchase within a Community Governed by an Association, many such Communities will need to be ones that are approved to accept Buyers with FHA Financing. Unfortunately, many Communities have not applied for nor received FHA Approval, in which cases, most will have to be eliminated from consideration in your Housing choice. If you're an FHA approved Buyer, I will check the List of approved Communities to see if the ones you're interested in have been approved or will otherwise qualify.
- Note regarding the timeframe for closing: With a normal purchase (NOT a Short Sale), you can typically estimate 30-45 days from the time of placing an Offer until Closing. During this time, the items completed include Home Inspection, Appraisal, Title Search, securing of Financing from your Lender (IF you're financing the purchase), arranging and securing Home Insurance, and obtaining Association approval (if you're purchasing within a Community that's governed by a Homeowner's or Association or Condo Association. Keep in mind that if the Home is occupied by its' current Owners, they will typically request a minimum of 30 days to vacate the Home once there is an accepted Contract for the purchase of the Home.
- Planning to purchase a Condo? Review IMPORTANT FACTORS TO CONSIDER WHEN PLANNING TO PURCHASE A CONDO
- Planning to purchase a Single Family Waterfront Home? Review important Waterfront Home details FIRST!
- Planning to purchase a Bank Owned Foreclosure? Review details here.
- Planning to purchase a Short Sale? Review details here.
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