Understanding the home buying process.

The first step in the home buying process is not actually part of buying the home but equally important. getting pre-qualified not pre-approved is important. Providing a little historic context here not long ago real estate agents would drive people around looking for homes, their customers would make an offer on a home only for the agent to find out they couldn’t qualify for the home. real estate agents got wiser and requested their customers get pre-qualified before they would take them out and show them homes.

Here are some of the downsides of using these sites. not all of the information is accurate and the images of the homes are taken by professional photographers, they make the home appear to be pristine. The photographer also uses what’s called a fisheye lens. The lens makes every room appear to be larger than it actually is so don’t be surprised if you show up at the home and the rooms are much smaller than the photographs.

Once you find a home that checks all the boxes, you’ll sit with your real estate agent and write an offer. As a former real estate broker, I will tell you everything is negotiable. you’ll want to add everything you’re looking for in the very first offer. for example, I had a client that fell in love with a set of burgundy curtains in a home. my clients requested in the offer that the curtains remain. This may seem like a small thing but if it’s something you want, request it in the offer. The worst case scenario is the seller says no.

Things like the electrical system, the plumbing system, air conditioning units, the condition of the roof and items similar to this require a professional to give you a report on the condition of these systems. If it is discovered that one or more of the systems is in disrepair, you may go back to the seller and request additional concessions for repairs. the seller does not have to honor your request unless these are safety items required by law. if the seller declines to assist you with these repairs, in most cases this will allow you to legally back out of the contract.

Home Inspection note

A home inspection is not mandatory for home buyers, but is highly recommended in the case of older homes. An example of not needing a home inspection is for new construction. If you are buying a home that is under construction and will be completed shortly, you will not need a home inspection as the home will have a warranty for a specific amount of time.

Next steps in the home buying process

When you apply for a loan, documents are collected and an assessment is made of your ability to repay the loan. This is known as underwriting. An underwriter will review your income, assets, credit, employment industry and other factors for loan qualification. They will also review the appraisal and the title report to ensure their collateral, the home. Once this process is completed your application will either be approved, denied, or suspended.

With a loan approval the lender will issue conditions that must be met prior to closing. This is known as a conditional approval. You must be able to fulfill these conditions in order to close the loan. If you cannot, the lender will not grant the loan.If the loan has been suspended, there are specific conditions that must be met in order to bring the loan to an approval status. These items will be clearly identified in the suspension. Not always do these items have to do with the borrower for example, a home that is in disrepair must be repaired prior to loan approval.

A wet funding state is a state where all parties show up to the closing, documents go around the table and everybody signs. This is also known as a live closing. A dry funding is where you’ll have an appointment, you show up and only sign your portion of the documentation. In either case, any monies that need to be brought in or handed over to the bank’s representative, normally in the form of a cashier’s check unless the money has already been wired.

1: Set up a budget, you’ll want to know how much home you can afford without breaking the bank. Gather your income and asset documentation for preparation in applying for a loan.

3: Begin researching the real estate markets. Find the areas, zip codes, schools and other pertinent details within the areas you choose to live.

4: Create a wants and needs list. What items do you want/need in a home? Beds/baths? Go through anything you can think of. This will benefit you in the long run and allow your decision to be an easier one.

5: Create a viewing schedule. Can you only view on weekends, weekdays? Mornings afternoons or evenings. Stay consistent so you can take in as many homes as possible.

6: Find a mover. Even though this may be the last item on the list you may want to begin this process sooner rather than later. Moving can be costly, specifically when moving to another state.

The Home buying process timeline differs from state to state, although generally it will take anywhere from 30 days to 90 days. If you’re purchasing new construction, the Builder will inform you of the construction completion date. That can take over 6 months in some cases.

Some states use attorneys and some states use escrow companies. When attorneys are involved it generally slows the process down to a crawl. The attorneys will write the contracts, send them back and forth to one another and ultimately come up with a working contract we’re all parties will sign. when an escrow company is involved, the real estate agent will generally write the contract, both parties will sign and the transaction can close in 30 days or less.

The short answer is no. While there may be incentives for a first-time home buyer the process is relatively the same. There are specific programs for first-time home buyers called HomeReady and HomePossible. These programs tend to make it a bit easier for first time home buyers to get into the home buying process.

The minimum requirements for purchasing a home come directly from each individual lender. The lenders with the most relaxed requirements are called portfolio lenders. they will keep the loan and service the loan on their own so in most cases they do not need to meet the standards required by Fannie Mae and Freddie Mac. Minimum requirements will also revolve around income, credit score and assets.

Fannie Mae and Freddie Mac are the government entities that make up a huge portion of the mortgage markets.

You can buy a home with low income. There are special programs that apply in two specific situations for low to moderate income borrowers. You can find more information about these specific programs by searching for The Community Reinvestment Act.

1: If a borrower’s income is 80% below the (AMI) Area Median Income, you may qualify for a special incentive.

2: If the property is located in a census tract area that is deemed low to moderate income you may also qualify for a special incentive.

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