10 Steps to Buying a House
By Vanlines.com Staff
Before you call the moving truck, you need to buy the house. Of all the major happenings in one’s life, buying a property is perhaps the most exciting and most wrought with fear.
It’s an exciting time for sure, and closing on a home consists of many steps involved in sealing the deal on a home purchase. Here are 10 of the big steps you will encounter.
Making an offer
Once your realtor has found you the perfect property, you need to be ready to jump. Make your first offer low, but not so low that you’ll get laughed at. Try eight to 10 percent below the asking price and go from there. This will give you room to haggle, while making sure you stay in the game.
This is a precursor to a mortgage down payment, and is usually one percent of the purchase price. It signifies the commitment of sale by both the seller and the buyer. The deposit is held in a trust until the deal closes. Be aware that if you renege on the agreement, you could lose the deposit money. If the buyer does not accept your offer, you will get the money back.
The big ones are your ability to get a mortgage and the seller’s ability to pass a home inspection, which usually takes place 10 to 14 days after acceptance of the contract.
A professional home inspector needs to go over the property to be sure that the roof is not going to fall in on your head once you move in. They can also spot heating, cooling, plumbing and other structural issues. Any issues should be dealt with by a licensed contractor, plumber or electrician at the owner’s expense.
This is a big step that follows the acceptance of an offer by the seller and it is a legal and binding obligation on the part of the buyer. It outlines the details of the transaction, including: a description of the property, price, date of closing, possession date and any applicable contingencies.
Also called a “closing statement” or a "settlement statement," this is a document that the Department of Housing and Urban Development requires to account for all financial aspects surrounding the sale and purchase of a home. It provides a list of the funds that were paid at closing. A copy of the settlement sheet should be distributed to both parties at least one day prior to settlement.
The buyer must have these completed before the closing can go forward. They include completing a title search to make sure the title is clear, buying insurance to protect the buyer and the lender from an oversight regarding a claim on some aspect of the property and an application for homeowner’s insurance (which is also necessary for securing a mortgage).
To be brought with you to the closing. The total amount includes a loan origination fee, an appraisal fee, the cost of a credit report, a lender’s inspection fee, the cost of title insurance, a mortgage broker fee, taxes and a document preparation fee.
Before the deal is closed and you take possession, you must make some practical arrangements regarding utility service and first mortgage payment.
Settlement describes the payment of the balance of the purchase price the buyer owes on the property, and the transfer of the title. It takes place on the possession date specified in the agreement.
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