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Home Buying Basics – Step by Step

Get Pre-approved for a Loan                                                    

This has never been more important! Lending guidelines changed dramatically in 2009. Start off on the right foot by getting pre-approved so we will have no surprises. There is no cost or obligation.   I will be happy to provide you a list of folks who will be happy to help! Once you are pre-approved, you will know how much home you can afford and it’s time to go shopping!   

Find a Home

There are lots of homes to choose from, so we will talk about the needs and wants of your dream home. I will then compile a list of available homes that meet your requirements.  I will also set up a search and forward new listings as they come on the market. When you see something that looks interesting, we will set a time to tour homes.              

Write an Offer

Once we find the right home, we’ll do some research to see how long the home has been on the market, what the owner paid for the property and recent home sales for the area. We will use this information (and more) to come up with an offer price. In Alabama, verbal offers are not binding, so all offers will be in writing. Our offer will also specify who will pay closing costs. We will also propose a closing date, usually 30-45 days from our agreement date. The offer will also include a time period for inspecting the home, appraisal contingency and finance contingency.

Inspect the House

Our current Alabama Association of Realtor contract offers two primary ways to accept a home’s condition.  The primary means is a “due diligence” period. Our contract will specify the number of days for our due diligence period. During that time, you have the right to right to have a home inspection, get homeowner insurance quotes, have a survey, and depending on the home, even a pool, roof, mold, termite and/or septic tank inspections.  Next, we will write up an addendum to address concerns with the property.  You can buy a home “as is”, which means you accept the home with all of its faults.  Selling a home “as is” does not relieve the seller from disclosing any known defects.  It is still highly recommended that you inspect the home with the right to cancel the contract with full return of earnest money if it is not satisfactory to you.

Negotiate Repairs

When the inspections are finished, we will make a list of the items we would like the seller to address. This is a second round of negotiations for the home. The seller considers our repair request, and can accept, reject, or counter it. If the seller’s response is acceptable, then you move forward to closing. If the seller’s response is unacceptable, then you have the right to cancel the contract with full refund of your earnest money (in nearly all cases) and start again with finding a home.

Final Loan Processing

Once we’re through repairs, there’s usually about two weeks where everyone else springs into action. The loan officer reviews the appraisal, puts the loan through final underwriting, produces loan documents, and the seller has any repairs completed that were negotiated.

Walkthrough and Signing

We’ll go back to the house and do a final walkthrough, to make sure that it is in the same condition as when we went under contract then we will head to the closing agent’s office.

You will sign and sign and sign more papers. Finally, you are a homeowner!