First Time Homebuyer Series: Contract To Closing
Buying a home for the first time can seem to be a daunting task, but it doesn’t have to be. This article is part of a three part series dedicated to helping you, a first time homebuyer, understand the process of buying a home. This time you will learn what happens from the time when you find that perfect home to actually getting the keys in your hand.
Making An Offer – Once you find your dream home, you will discuss making an offer with your Realtor. Your Realtor will help guide you to a reasonable offer. The home seller will then determine if they want to accept, decline or submit a counter-offer.
Loan Application – Once the contract is negotiated, you will go back to your lender to apply for the financing necessary to purchase the home. If you are a first time homebuyer in the Cincinnati area, the Lowry Team can set you up with a preferred lender who will work with you to get you the best possible home mortgage.
Appraisal – Before finalizing your mortgage, your lender will require you to have a home appraisal. A home appraiser will tour the home and compare it to other properties in terms of size, condition, location, and amenities. For the most part, the appraiser will generate a fair market value that falls within the same range the buyer expects. However, every once in a while, a home doesn’t appraise, which means the generated value is less than what you have agreed to pay for the home. If this happens, your lender won’t write you a loan for more than the home’s appraised value, so it would be up to you to come up with the funds to cover the difference. This may seem like a scary possibility if you are first time homebuyer, but it doesn’t happen often, and there are solutions to this that you can discuss with your Realtor.
Due Diligence – A whole-home inspection is a very important part of buying a home that you won’t want to skimp on. While the seller is required to disclose any latent defects to the buyer, there may be some issues that they aren’t aware of. The home inspector thoroughly inspects the home to make sure that they are no other latent defects that could affect your decision to purchase the home.
Homeowner’s Insurance -Not only is homeowner’s insurance important, it is required when buying a home. You will have to present proof of your policy at the closing. A basic homeowner’s insurance policy protects you against loss or damages to the property itself, and also against liability in case someone sustains an injury while on your property. As a first time homebuyer, all the different choices of policies can be overwhelming so it is important to do your research and possibly even consult your attorney on what would be best for you.
Closing – As a first time homebuyer, closing day is a very exciting day for you. On closing day you can typically expect to sit around a table with everyone involved in the deal and a bunch of pens, signing your name so many times you’ll lose count. At closing, payment arrangements will be made, documents will read, etc. Depending upon your negotiated occupancy date on the contract, you may get the keys handed to you right at closing, or you may have a certain time to wait until you get the keys. After closing, it’s done. You are no longer a renter, or a first time homebuyer, you are a home owner! Now it’s time to move in, relax, and paint the walls whatever color you want!
Read The Rest Of The First Time Homebuyer Series:
First Time Homebuyer Series: Can You Afford To Keep Renting?