In: Categories » Home and family » Home business » 12 Steps to Quicker and Easier Home Buying
Imagine trying to win a game of football without knowing the rules. You’d send your team out into the field not knowing the difference between quarters or innings, how many points you would get for a touchdown or a field goal, or even which direction to run! It wouldn’t matter how professional your team was. If you didn’t know how the game was played, even a grammar school team could beat you. Real estate is similar. Buying a home is not like buying anything else. It’s not like buying a car, or a computer, or a jar of mayonnaise. It has its procedures, which in most cases are rigorously followed. If you’ve bought a home before, you probably have a good idea of how it’s done. But if it’s been some time since you bought, or if this is going to be your first purchase, the process may seem mysterious, even arcane.
But not anymore. In quickstep, here are the 12 procedural motions you’ll want to go through in making your purchase:
The 12 Steps to Making a Purchase
1. PRE-APPROVAL You decide you want to buy (or at least want to look) and get pre-approved.
2. AGENT Along the way you talk with one or more agents who show you properties.
3. OFFER You find the home of your dreams (you hope!) and make a written offer on a document called a purchase agree-
ment, usually for less than the sellers are asking. (Verbal offers aren’t illegal, just unenforceable.)
4. COUNTEROFFER If the sellers don’t accept, they may make a counteroffer, which you may in turn accept or decline, in which case you may then counter.
5. ACCEPTANCE The sellers eventually accept your offer, or one of your counters. (If the sellers don’t accept, start over with Step 1.)
6. ESCROW Your agent or you open escrow. Used today in most states, it is a licensed and bonded company that acts as a neutral third party. The escrow holder receives all funds, makes sure that all documents are properly executed, and when all the conditions of the sales agreement (and the lender) have been met, transfers title to you, records the mortgage in favor of the lender, and gives the sellers their funds. Escrow typically lasts 30 to 60 days.
7. FINANCING You secure your financing (if you haven’t already) from the lender who pre-approved you, or some other lender.
8. APPROVALS You approve (or disapprove) a home inspection. You approve (or disapprove) the seller’s disclosures about defects in the home. If you disapprove, you may negotiate a lower price, get sellers to fix the problem, or get out of the deal, depending on how your purchase agreement was worded.
9. CONTINGENCIES You fulfill any other obligations you’re committed to as part of the sales agreement, such as putting extra cash into the deposit or approving a contingency. The sellers do likewise, such as providing a termite clearance, obtaining clear title, and clearing any contingencies they may have.
10. FUNDING Your lender agrees to fund your mortgage.
11. WALK-THROUGH You have a final “walk-through” inspection of the property. Then you sign the final documents (mostly loan papers); the escrow records the documents and transfers the funds.
12. POSSESSION You get possession and the key.
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