The first question most buyers ask is “Where do I begin?” The first step is getting approved… Why do you need a preapproval letter before you start looking at houses??

Final Points on Financing:

Occasionally, you can ask the seller to pay for closing costs; however, if you offer $100,000 and ask the seller to pay $3500 in closing costs, be aware that the seller is only going to make $96,500 on the sale. Closing costs would be deducted from the total amount offered.

 Once you are pre-approved, have your lender email me a copy of the pre-approval letter to Tina at Tina@RxRHomeTeam.com

If you decide to go with a different lender at ANY time during the process, you MUST tell me and get me a new pre-approval letter. Once you start the house buying process, do NOT open any new lines of credit (new car, DirectTV, credit card – anything that requires pulling your credit). This can negatively affect your credit score.  Also, do NOT transfer/deposit/withdraw any large sums of money unless you keep accurate receipts/records. For example, if you sell your ATV for $4000 and deposit it to your account, you will have to provide your lender with a detailed paper trail. 

Welcome to the fun part!

• To get started, I will set you up on an automatic search that fits your house hunting criteria. You will get daily updates with a link to view these homes.
• When you see a house you like, enter the address on Google Maps, and then go drive by it. See if you like the neighborhood.  Decide if the exterior is inviting enough for you to want to see the inside.

You’ve found your dream home.  Now what? Now you have to make an offer. Here’s what you need to know about this next step:

1. Contact your lender to get an updated pre-approval letter. You will need to tell the lender the address of the property, square footage, last year’s taxes. Give me the updated pre-approval letter.
2. We will run a market analysis of the neighborhood, looking at houses that have sold in your dream home’s neighborhood in the past 90-180 days, within 200 sq feet of your dream home’s square footage, and within 5 years of age.  We will compare the condition of the sold homes to that of your dream home, and based on what you’ve found, you’ll decide on a price to offer. But that’s not all!

Your option period began at midnight….now what?

1. You will need to make out 2 checks: one is usually 1% of the sales price and this is the earnest money made out to the title company; the other is usually $100 and is the option money made out to the seller. The earnest money is a guarantee that you are serious about buying and is held in escrow by the title company. When you close, the earnest money is credited toward the sales price.  If you back out of the contract during your option period, you will be refunded the earnest money.  If you back out after the option period, it’s a little trickier and you may lose the earnest money. The option money is used to “buy” you a period of time in which you can back out of the contract for any reason/no reason. The option period is typically 7-10 days and begins at midnight on the day the contract is executed. If you back out of the contract, the seller keeps the option money.  If you close on the house, the option money is credited toward the sales price. Both checks will be cashed immediately.
2. In addition to the earnest money & option money, plan to spend $1000 out of pocket if your offer is accepted: $500-700 for inspections, $500-700 for the appraisal.
3. You want to get the inspections done before the option period ends. You do not have to be present for the inspection, but if you want to be, that is fine and recommended. My team does NOT attend inspections for liability reasons, but if you have any questions, you can call the inspector back after the inspection and ask more questions, or if you attend the inspection, feel free to ask all the questions you want. A whole house inspection is a necessity.
4. After the inspections, we will discuss any issues found and what our next steps will be. We can negotiate for repairs, a reduced sales price, or both during the option period. There are three possible outcomes when negotiating for repairs:
   1. Seller says yes to all requests
   2. Seller denies all
   3. Seller picks and chooses what to repair/amount to give back

If you are still satisfied with the house, repairs, etc, you can move on to the closing countdown. If you’re not satisfied and want to back out of the contract, do so during the option period. Some repairs might be required by the lender, depending on the type of loan.

After the option period ends, it’s really a countdown to closing.

The last 2 main obstacles are waiting for the appraiser to appraise the property and for the lender to give you the “clear to close,” meaning your loan has been fully approved.

As you wait for those 2 steps, here are the other things you must do before closing:

1. Choose a homeowner’s insurance – contact them and give them the address of the house, square footage, and tell them to send a binder to the Title company for closing.
2. Choose a home warranty (if applicable).  We usually negotiate for the seller to pay for a 1 year home warranty of your choosing.
3. Set a closing time with the Title company. Let your lender know the time in case he/she plans to attend.
4. Provide lender with anything he/she needs: Current pay stubs, current bank account statements, etc.
5. Prepare to move into the house NO SOONER than 1-2 days after closing, in case there are delays.
6. Call/schedule utilities to be turned on NO SOONER than the day of closing.
7. Change your address to your new address: driver’s license, bank accounts, credit card accounts, car insurance and title, online accounts (PayPal, Amazon, etc.)
8. Schedule a walk-through the day before closing. Look for appliance manuals, garage door openers, etc. This is where we make sure the house is in the same condition after the seller moves out as it was when you agreed to buy it.
9. Prepare to get a cashier’s check or wire (check with your lender) for the cash down/closing costs.  The title company will send you wiring directions to give your bank. PLEASE CALL THE TITLE COMPANY TO VERIFY BEFORE YOU WIRE ANY MONEY.  If the email you receive from them has a different number, only call the number I just gave you. After you verify with the title company, you will instruct your bank to wire the amount that is on the CD.