Making it through the process to preparing to be at the closing table is an exciting time. To help you fully understand what comes with the offer process, we have some information that will be beneficial.
The first step is to obtain a mortgage preapproval letter from one lender or more. This is ideal before you even begin to start looking for a home. This determines what you can and cannot afford. Once you find a home within your price range, you want to make a competitive offer. Your real estate agent can assist you in figuring out what that means. The offer is especially important in the current market. As we know, things are a little tougher, but it is still very possible to find your perfect home. Staying a little below your preapproval amount may be a good idea as it gives you some wiggle room.
When you are ready to make an offer, here are some things you can keep in mind when it comes to the letter. A written offer may contain these items and possibly others:
Address: The legal address for the home and perhaps a legal property description.
Price: Information on the purchase price and terms.
Earnest money: The amount, terms, and disposition upon the acceptance of the offer.
Title: A condition that the seller will provide a clear title to the property being purchased.
Closing costs: Fees, taxes, and any other expenses between the seller and buyer at closing.
Tentative closing date: This is usually 30 to 60 days.
Verify down payment and earnest money funds. Guarantee that you have easy access to the money needed. The earnest money will be between 1% and 3% of the total purchase price. It will be held in escrow as good faith money. There are also some differences between closing and the various types of homes. If you are preparing to close on a rehabilitation home, the down payment will only be 3.5%. When it comes to new construction, most fees paid for by the seller for a resale home are paid off by the buyer for a new construction property. Considering inspections and repairs on a previously owned home, there will be a period for the buyer to complete all inspections and appraisals. Deciding then what to request at closing, if anything. If the home is newly built, inspections have been continuous. A final walk-through will occur near the closing date.
The offer you place can be accepted, countered, or denied. Be prepared to negotiate and possibly do more research. The right property will be yours. Trust the process and use this information to better prepare for your journey to homeownership.