How exciting that you’re thinking about buying a home! You’re smart to collect as much information as you can about process and the people involved. The two most important factors after making your decision to buy are Criteria and Budget:“What are my needs/wants?”, and “What is my budget?” The answers to these two questions will drive the direction of your home quest. I’ve compiled some information here I think you’ll find helpful, including things to expect and the kinds of service providers you’ll likely encounter along the way.
The primary driver – your lender, who really determines: How much home can you afford?
The time to put your financial papers in order is before you start looking. Pre-approval for a loan positions you to act quickly when you find the home you want.
You will want to put together a file that includes this information:
o Bank account statements (checking and savings)
o Investment statements
o Financial statements concerning income or debts
o Credit card information
o Auto loan information
o Recent pay stubs
o Tax returns for the previous two years
o Current credit score
o And after you are pre-approved, don’t go buy a boat or another car – it kinda messes things up for you
• You’ll want a full-time agent who has experience completing transactions similar to yours.
• An agent who is willing to spend time with you, both attentive and a prompt responder
• Knowledgeable of the latest real estate trends and markets, and it doesn’t hurt if they’ve lived in the area a while and know what’s what
• Has a great track record – and works hard
• An agent with whom you feel comfortable – trust is a big deal.
You will need to select a title company, which acts as a neutral third party holding all instruments necessary to the sale, including funds and deed. The title company will also research the complete recorded history of the property to insure that the title is free and clear of encumbrances by the date of closing and that all new encumbrances are properly added to the title – click here for a list of our personal favorites.
How to Hold Title
Consult with an attorney or tax adviser on the best way to hold title. Different methods of holding title have different legal, estate, and tax implications, especially when selling or upon death of the title holder.
Once your offer is accepted by the seller, you’ll want to have professional inspectors evaluate your home. We can recommend which inspections your property will need and how to select a proper inspector.
Appraisal and Lending
Your lender will let you know if and when additional documents are needed to approve your loan application. They will send an appraiser out to the property. Appraisers are specialists in determining the value of properties based on a combination of square footage measurements, building costs, and recent sales of comparable properties.
Before you move in:
Your lender will require that your new home be insured – click here for my recommendation
A few days before you take over the property, we’ll do one last inspection – the “walk through” – to make sure everything is in order.
Utilities and Services
You will have to transfer the utilities and services of the house over to your own name, effective the day you take possession of the house.
When your transaction is nearly completed, the title company will provide you with a “closing statement” that details all of the financials of your home purchase. As the last step in the buying process, the title company will have you sign the final documents, including loan documents (“deeds of trust”). When everything is complete, the title company will record the transaction for you at the County Assessor’s Office, and you will become the official new owner.