Home Buying Process

12-Step HOME BUYING PROCESS 

Step One

Buyer obtains Pre-approval (if mortgage is needed); pre-approval or Proof of Funds shared with REALTOR®

Step Two

Search criteria established, Buyer reviews listings, visits properties & selects property to purchase

Step Three

Buyer's REALTOR® ascertains approximate appraisal value 

Step Four

Buyer estimates costs to "cure" (may include mandatory Point of Sale (POS) violation repairs as well as desired updates/upgrades to the property) 

Step Five

REALTOR® submits offer, negotiates counter-offers, arrives at agreed purchase price; Earnest Money - 1% of purchase price or $1000 minimum – paid immediately upon acceptance of offer to Title Company; Earnest Money may be forfeited if buyer breaches contract at any time before closing date. 

Step Six

Immediately after receipt of signed contract: 
a. Within 1-5 business days, Buyer begins loan application (if applicable) and pays for appraisal; Lender issues Loan Estimate for Buyer to show loan fees and closing costs 
b. Within 1-7 calendar days, Buyer conducts any inspections included in offer as contingencies, (i.e. General Home Inspection, Pest Inspection, Water Potability, Sewer/Septic Inspection, Radon Test, Structural Inspection, Well Inspection, Roof inspection, etc.) NOTE: proper inspections will require that all utilities be in service; this may require that the Buyer make arrangements for service connection for the day/time of scheduled inspection(s). Inspections to be conducted by a licensed Inspector. 
c. Within 3 calendar days after inspection(s), Buyer either 
1. accepts property "As Is" and releases any/all contingencies OR 
2. Buyer releases contingencies with conditions (Buyer shares report(s) from inspection(s) with Seller, and Seller corrects specific items as identified in inspection, OR seller can reduce price of home and Buyer will assume identified items) OR 
3. Buyer cancels and is released from contract; earnest money returned to Buyer.

Step Seven

For options 1 & 2 above, Buyer continues to submit requested items to loan officer; Appraisal is ordered and should be received by underwriting within 2 weeks (property must appraise at or above purchase price for loan approval); 

Step Eight

Title company is given a completed contract/addenda and determines how property is deeded, etc.

Step Nine

If POS escrow is required, Buyer obtains contractor estimates for repairs, submits to city building commissioner; Escrow amount is determined, and Buyer deposits said amount with city; city issues POS Buyer affidavit which is sent to title company. 

Step Ten

For financed purchases, underwriting department issues "Clear to Close", Escrow officer prepares Closing Disclosure (CD), must be received by Buyer 3 days prior to closing); Buyer compares CD with original Loan Estimate (any differences cannot exceed a tight margin of change); For cash purchases, Title company indicates when ready for Closing. 

Step Eleven

Escrow officer contacts Buyer & Seller to set an appointment to sign documents; Buyer brings certified funds (down payment if using mortgage or entire funds if Cash purchase) to closing.

Step Twelve

If closing is completed early enough in the day (usually prior to 1 pm) title may transfer the same day; Buyer receives keys when title has transferred!