You've found the house of your dreams and your offer has been accepted. Now what? For a first-time buyer, purchasing a home may seem a bit intimidating. Don't get too stressed! Whether you're buying your home through a realtor, directly from the owner or via a discount brokerage, the basic process is the same. Keep in mind that many of these steps overlap and should be initiated early on in the process.
Negotiating Your Contract
Once your offer has been accepted, a purchase contract needs to be prepared and signed. Don't do this without your lawyer! The purchase contract essentially says that you will buy the home for the agreed upon price contingent upon various factors such as:
- The home passing inspections
- The sale of your existing home
- Obtaining your mortgage
The contract usually states that the buyer will deposit 10% (minus the initial good faith deposit) into the escrow account of the seller's attorney and establishes a deadline for the arrangement of financing. It also describes the furniture, appliances and fixtures that are included or excluded from the sale. The purchase contract is quite extensive and can take several days to negotiate.
Applying for Your Mortgage
Unless you're in the fortunate position of buying a home without a loan, your next step is applying for a mortgage. If your intended closing date is not too far off, you should start this step during your contract negotiations.
Once you've shopped around and found a good rate and reputable firm, your mortgage broker will guide you through this paperwork-intensive application. You'll have the option of locking-in the current interest rate and you may be asked to pay several fees related to the application and appraisal.
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9 Key Steps in Buying a Home
