How Does Home Buying Work?

Before You Start Your Search

With the constantly changing laws and market for real estate, you should go through a professional who deals with these issues every day. Hiring a real estate attorney or realtor will be inexpensive compared to the problems and lawsuits that could occur because some paperwork or an inspection was missed. Meet with your real estate professional and discuss the needs and wants you have for a home. If you don't know a mortgage broker or deal with a bank on a regular basis, ask your professional for some referrals. Get a pre-qualification letter, stating that you can spend up to a certain amount for a home. There are various mortgage programs, and you want to make sure you get the one that best fits your needs. Sometimes, you will only be qualified for a certain type of home. Decide if you want new construction or existing homes. You may only want to look at mobile homes or modular construction. This information will help your professional find homes for you to view. You may want to ask about schools in the area or proximity to hospitals and doctors. Make sure that anything that is important to you is covered. Once you've done this, it will be time to go looking at homes.

Your Seach for a New Construction

If you are looking at new construction, go to a model home that the builder has already built. It may not be the floor plan you want but you will be able to see the quality of their construction. Then sit down with the builder and your professional and put together your new home. Ask every question you can think of and make sure to get a price list of extras. You will be surprised at what isn't considered part of the price. The same thing goes with new Mobile Homes or Modular Homes. You will need to know if they have lots that can be included in the price. If you already have a lot picked out, what would be the price to build on it. Normally, with stick built homes the septic and well are included in the price. This is not the norm for mobile homes. Ask your professional for a check list of questions to ask the builder or distributor. You don't want any surprises later. Once you get a final price and time frame, go back to your mortgage person and see if it will all work together. Then you are ready to have your professional draw up a contract.

Looking for Existing Homes

Sometimes new construction is not an option because of a time constraint. And some people just like the charm of an older home. Or sometimes it comes down to price. Whatever the reason, the major difference is the need for inspections. New construction will be inspected as part of obtaining a certificate of occupancy by the builder. Existing homes will be inspected either by law or by contract. If you don't state in the contract that a certain inspection must be done, then you can not hold a seller accountable if you find something wrong later. Your professional may know certain things to look for as clues that there is a problem, but they are not construction professionals and you should not depend on them to spot a problem. Hire a licensed home inspector to go over the home from roof to basement and give you a report of any problems with the home. This doesn't mean you won't buy the home if there is a problem; it just makes you aware of what may need to be done so you can negotiate with the seller for repairs. The few hundred dollars it costs for the inspection could save you thousands on a repair that is not visible to you or the seller. Once you have found the house you want and negotiated the terms with the seller, your professional will draw up a contract.

From Contract to Closing

After you have a signed contract by all parties, the mortgage process begins. Your bank will want a lot of paperwork from you verifying everything that you told it in the pre-qualification stage. It will also order an appraisal to find the value of the house. It must be equal to or more than the sale price, or the bank most likely won't make a loan on it. The bank will require a title search be done to make sure there are no liens on the property. Your professional will be coordinating all of this for you. You will pick a title company or abstract company to use for closing. Some attorneys will order the abstract and do the closing themselves in their office. When the day of closing finally arrives, you will need to bring certified funds to closing and two forms of ID, one with a picture. Your title clerk, mortgage broker or real estate professional will tell you an amount to bring to closing. At closing, you will sign a note and mortgage along with other paperwork required by your lender and title personal. Once the paperwork is complete, you will be given the keys to your new home.