Steps To Purchasing A Home
- Set up an appointment with your REALTOR to go over housing needs, location, financing and review the Working with Real Estate Agents form.
- Sign a buyer’s agency agreement
- Qualify with a lender (no charge or obligation). Obtain a qualification letter or approval letter. This will help us show homes to you in your price range. It will also accompany your Offer when the time comes.
- Find the home of your choice.
- Make your offer using the standard Offer to Purchase and Contract written by the NC Real Estate Commission and the NC Bar Association. Due Diligence money and earnest money will accompany your offer, so make sure you have your check book with you when you look at homes. (You don’t want to be caught empty handed when you find the perfect home.) The earnest money check is made out to the closing attorney or the real estate company and is held in trust and credited to you at the time of closing. The due diligence money is made out to the seller and is also credited to you at the closing. If you do not go through with the sale, the due diligence is non-refundable. The earnest money should be refundable if you cancel your contract before the due diligence date at 5PM. Time is of the Essence.
- Your offer is presented to the seller in writing on an Offer to Purchase and Contract and then negotiations begin (if necessary). When all parties reach a final agreement, your earnest money is deposited into the closing attorney’s trust account or to the listing company’s trust account. This money is credited to you at the time of closing.
- Apply for your loan and lock in your interest rate right way. A lock-in term is usually good for 60 days. Be sure to check with your lender to ensure your lock-in will cover you at least through the closing date. I recommend making sure it goes a few days beyond your scheduled closing date. Closing is usually 30-60 days from time of offer. Some exceptions may apply and can be shorter or longer, depending on your needs. At time of loan application, you will be required to pay for a credit report (approximately $75) and an appraisal fee for FHA, VA and conventional loans (approximately $450-$600.) Please verify your fees. Each lender may be different. The total amount of upfront costs is credited towards your closing costs.
- When you apply for your loan you will need to bring the following items: (Some lenders may request these items via email and some may ask you to bring them with you at time of loan application.)
- All loan numbers (car, mortgagees, time shares, etc.) with approximate balances and minimum payments -- if you are not sure, please bring the actual statement, all credit card numbers with approximate balances and minimum payment amounts (jewelry, furniture, department stores, etc.)
- Tax returns for two (2) years, W-2 forms for two (2) years, current pay stubs, any stocks and bond information with the value of each stock and/or bond. If you are self-employed (independent contractor), please bring your last two 1099’s.
- Any retirement plan information, etc. Bring company address and account numbers.
- Bring all savings and checking account numbers with balances.
- Have employer names and addresses for the last two (2) years.
- Have landlord names and addresses dating back two (2) years.
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- Any information you forget to share with the lender can hold up your closing. BE HONEST!
- Throughout the loan process, provide your mortgage company with any and all additional documents and paper they request. Remember, do not do ANYTHING to ALTER your credit scores during the loan process. Check with your lender should you have questions about major purchases. My recommendation; DON’T BUY ANYTHING LARGE AT THIS TIME, NO CAR, WASHER AND DRYER ETC… WAIT UNTIL AFTER YOU CLOSE.
- During the due diligence period, you shall be entitled to conduct all desired tests, surveys, appraisals, investigations, examinations and inspections of the property as you deem appropriate and at your expense, including, but not limited to, the terms as listed in the Offer to Purchase and Contract.
- Schedule a private inspector to inspect the purchased property, if you elect to do so. Prices vary depending on the house size, age, and the inspector, and is generally $450-$700. The fee is paid at the time of the inspection and is NOT related to your loan closing costs. At the time of the inspection, a wood destroying insect company (i.e. termite company) should visit the property and inspect for wood destroying insects. Price for this is usually $100-$125. If there is a problem, see contract.
- If the home you are purchasing is on a well and or septic, most lenders will require a report showing the systems are functioning and you probably want one too. You will need to check with your lender to determine what kind of report is required for government loans, i.e., FHA and VA loans. This report is provided by a licensed sanitarian. The County Health Department of a private sanitarian can provide this test for you. The Amy Pomerantz Group is happy to arrange this for you. Prices vary form $400-$600 for well and/or septic. Be sure to check rates with the sanitarian you choose to use. Price are subject to change without notice.
- Upon receipt of the finalized inspection report, we will review the report. If there are any major concerns regarding repairs, we will prioritize them per need and ask the seller to address them. The seller has the right to say yes or no. You have the right to move forward with the purchase or terminate before the due diligence date and receive your earnest back. Remember the contract says the house is being sold in ITS CURRENT CONDITION.
- When the contract is written, we will already know the name of the closing attorney. This attorney must be on a list approved by your lender. Closing attorneys typically charge $950 for a standard closing. The fee is payable at closing and is part of your closing costs. You will also need to decide if you want a property survey. This is ordered by the closing attorney and is part of your closing costs. Survey’s are all different prices depending on lot size and location of property. Standard residential lot… approx.. $450 but you will need to confirm with the closing attorney.
- Near your closing date, but before your due diligence date arrives, you will need to be in touch with an insurance company of your choice. You be securing a Home Owner’s Insurance policy for your new home. Call your attorney and me and let us know the name of the company and the cost of the annual premium. The insurance company will need to arrange for a binder and will need to provide this information to the closing attorney.
- Arrangements between the lender and the attorney are made immediately to prepare your loan closing package. This usually take a couple of days and then it will take the attorney 24-48 hours to process all the paper work. (Check with your specific lender for more details.)
- Please call your new utility companies and have all utilities put in your name for the date of closing: i.e., gas, electric, cable, garbage, telephone, water and sewer. (If you are renting the property back to the seller, arrange for these for the date of possession of the property.
- About 24 hours prior to closing, I should be able to give you an exact dollar amount needed for closing. You will need to have a CERTIFIED CHECK (Bank Check) or wiring instructions (routing and account number) to the attorney. Make sure you have the correct name of the attorney firm. The attorney distributes and pays all necessary recipients. Closing usually takes approximately an hour. You must bring your DRIVER’S License for proof of identity. Bring your checkbook, too, for any incidentals. If you don’t have a checkbook, please get a check from the bank to have on hand.
- A final walk through of the property will be scheduled for you prior to closing. This is a 10 minute walk through to make sure the house is still standing prior to going to closing.
- Settlement is defined as the time the closing statement (HUD) is signed. Closing shall be defined as the date and time the deed is recorded. You will then be given keys and possession of the home. Please plan on moving in the following day or later. You will not be given access to the home until the deed is recorded. We suggest never closing on a Monday or a Friday.
- Congratulations on the purchase of your new home!!!!!
