It is important to make sure the closing goes smoothly. There are a lot of people that will be involved in the transaction of buying your house.
Here is a list of who these might include:
- Mortgage broker
- Loan processor
- Home inspector
- Pest and dry rot inspector
- Title officer
- Insurance agent
The list could be smaller but you can see there are a lot of people involved in the purchase of a home. So here is a punch list to keep the process moving when you are buying a home.
As soon as the offer has been accepted it is best to schedule a home inspection right away. Usually, they can be done within a day or two of calling the inspection company.
Are These People Necessary?
It may seem like an unnecessary expense but think of it as an insurance policy. You pay car insurance every month without expecting to get in an accident.
You may not think there is anything wrong with the property you are looking at, but it is best to get a non-biased third party to look over the property and give you their professional opinion on what repairs may need to be done to the property or things that could possibly go wrong with the property in the years to come.
If there are any underground oil tanks (i.e.: for an oil furnace) on the property you will definitely want to have a soil test done after you have completed the home inspection if you are still ready to move forward on the purchase of the home.
It can cost a homeowner thousands of dollars to remove a tank if the soil is contaminated so the cost of an inspection is money well spent.
Once your inspections are done if there are items that came up that could be negotiated, you will want to look at the possibility of re-negotiating the contract.
It is best not to use this as an excuse to try and get a better deal, but it can be a great way to get the seller to help with the cost of some of the repairs that may be needed to be completed for closing.
Some Area May Need Repairing
If there are repairs that need to be completed you will want to get some estimates on the costs for these repairs and weigh the costs of having them done before the closing as opposed to doing them at a later time yourself.
Keep in mind that the lender may have repair requirements that they need to complete themselves to process the loan. After the appraisal, the lender will let you know what has to be repaired before you can get the loan.
When your inspections are out of the way it is time to have the appraisal scheduled. The lender needs to be contacted and informed that the appraisal needs to be ordered.
The appraisal is one of the costs that will have to be paid up front (along with any inspections that need to be done on the property.) The quicker all these steps take place the quicker you can close on the house.
If you are not working with a Realtor, it is best to contact your mortgage broker or lender once a week just to make sure they are not missing any documentation that you may need to get them, and that the process is moving ahead smoothly.
Once a week you will also want to contact your escrow officer that is in charge of the closing at the title company.
They are very busy, but just let them know it is important that you stay notified of anything you can do to help with the loan. Like any other business, it is the squeaky wheel gets the grease.
At this time you will also want to call your insurance agent and inform them you will be buying a house and will need coverage for the closing of the loan. The title company will send you out a form that you will fill out with your insurance information, but it is a good idea to contact your agent up front and get the wheels moving as fast as possible.
Whenever the title company or the lender calls you requesting information get it to them in a timely manner. The quicker you respond the quicker the loan process will take place.
You can generally expect closing to take about 30 days from the time an offer is accepted, If you have all your ducks in a row you can move the closing forward about a week. But that is about the quickest you can expect the closing to happen.
You can talk with your mortgage broker and get a figure from them as well on what their average closing time is.
There are a lot of people involved in any single home purchase, but by understanding the order in which things take place, it will help you to make sure you will get the keys to your property in a timely manner and that you will have made the process as easy as possible.
Understanding “As Is” Homes
Purchasing a newly built home can be difficult, if not seemingly impossible, the task for many potential home buyers. Seller-driven economies keep the price of new homes at a high rate, and often offer fewer options for potential buyers without a significant deposit or high credit rating.
However, there are numerous opportunities available through the Federal Housing Administration that are designed to help home buyers. The promotion of “As Is” homes is a great opportunity – particularly for those with the skills and ability to repair and work on a home.
What Is An “As Is” Home?
The Housing and Urban Development department offers potential home buyers the opportunity to purchase homes through them on an “as is” basis for significantly lower prices.
The advantage to a HUD home is that they are priced lower than the typical average for a specific area. However, as the term applies, “as is” homes may need some work or renovations to remodel to make it a more comfortable home.
Many people assume that there is something “wrong” with the home or that it will require massive renovations to make it habitable, however, an “as is” home must, by law, be deemed reasonable and safe to live in.
All HUD homes are sold through HUD-approved real estate agents on a bid process. They work through an open “Offer Period,” typically of 30 days, in which the highest reasonable bid is accepted. If a bid is not accepted within the Offer Period, the first reasonable bid will be accepted.
HUD homes sold on an “as is” basis can be considerably cheaper in the long run, particularly if the new owner has experience renovating or repairing a home. These remodels may also rapidly increase the value of the home should you look to sell in the future.
Furthermore, other government incentives such as tax breaks for environmentally-friendly modifications may help cover the cost of some of the repairs.
HUD home sales may also come with other incentives, such as a cost-of-moving incentive, an early-closing bonus, or even an allowance for upgrading the home or property.
While, in theory, there is little difference between a standard sale and a HUD home sale, the extra steps, and different channels may delay the sale of the home to you by a couple of months.
Because HUD houses are sold on a bid process, there is a chance that your initial offer may be outbid above list price, you may be obligated to pay the difference on top of your initial down payment and closing costs.
And, since these homes are sold “as is” it is reasonable to assume that some work will be required to make them completely comfortable.
The cost to renovations is not going to be considered through a primary mortgage, though a second mortgage, as well as numerous incentive programs, may be readily available to help with the renovations.
Tips To Buying A HUD Home
It is important to have the home properly inspected by a licensed inspector as opposed to just the appraiser. An inspector will thoroughly investigate the repairs needed and give you an estimate of the cost of repairs. This should be done before any bid is placed.
While HUD home sales fall under the umbrella of the federal government, the actual sale of the home is through Marketing and Management Contractors.
You may contact your local Marketing and Management contractor to see what homes are available as well as read up on customer satisfaction with the particular company before entering in with them.
The HUD department takes a fairly hands-off approach to the actual sale of the home, instead of acting as intermediaries for the seller and potential buyer.
Ways to Streamline Your House-Buying Process with Ease
Whether you are buying a home for the first time or are already an experienced home buyer, the process can seem to be very long and drawn out. Finding the right home typically does not happen overnight, but there are some ways in which you can go about streamlining your home shopping process and making it easier on you in the long run.
If you are looking for a new home, there are many things to be considered. You will need to find the perfect home and you will need to find the right financing to purchase the home. Financing requires planning ahead of time in order to make sure that you are prepared to meet lender requirements.
This process will be simplified if you know what you want and where you stand with your finances.
Hire a Real Estate Agent
One of the best ways to shorten your home-shopping process is to hire a local real estate agent. He or she will be able to find listings that match up with your desires and budget quickly and without any further effort from you. Furthermore, a real estate agent can negotiate with sellers to get you the best deal on your new home.
Establish a Budget
Knowing what your budget for your next home will be and getting pre-approved for a mortgage is another great way to streamline the process.
This will help narrow down your search options to homes that are within your budget, saving you the hassle of browsing through listings that are too far above or below your comfortable spending limit.
Know What You Want
Before you even begin home shopping, make a list of must-haves for your next home. You may also wish to make a similar list of desires, but understand that you may not be able to get everything on your list in your next home.
The good news is that you can always hire a contractor or home improvement company for the kitchen renovations, such as Mike’s Country Kitchens & Woodworking in Halifax, they will help you transform and customize your space after you move in to make it exactly how you want it.
Build and Maintain Good Credit
If you have already purchased a home, then you realize the importance of building and maintaining good credit. If this is your first time as a buyer, you should make sure to check your credit report for accuracy and to ensure that your creditors are reporting positive information about you.
Lenders have stringent requirements for home buyers that must be met before a mortgage loan will be granted for a home purchase.
Save for a Downpayment and Other Expenses
You will need cash on hand during the home buying process. There are several different times when you will need to have money ready, hand money for when you place an offer on a home, closing costs at the time the sales transaction is completed and a downpayment that will be given to the lender at the time of the closing.
Depending on your credit and lender requirements, the amount of money that you will need can change. Talk to your lender about downpayment requirements and closing costs as early as possible to ensure that you have the necessary cash reserves at the time of purchase.
Work with a Realtor
It is a good idea to enlist the help of a Realtor for your home search. Meet with a Realtor and explain what you are looking for. Let them know your requirements and what things will make or break a deal. For instance, some buyers want a two-car garage and would not consider a home without one.
Others need a single-story home or one with an accessible bathroom. Make a list of what you need, what you want and what you cannot live without. Present this list to your Realtor in order to help him or her find homes that meet your requirements.
Expect the Unexpected
Be ready for eventualities, because in the process of buying a home it is likely that you will encounter some. You find the perfect home and the seller pulls it off the market at the last minute. Your closing is pushed back because your lender needs one more piece of documentation from your employer.
There are many different situations that you can encounter during the process of buying a home and it is always a good idea to stay open-minded and to expect that sometimes things will happen that are out of your control.
Choose the Right Mortgage Lender
Before you start looking for a home, you should begin shopping for a lender. Search the internet for reviews or ask your friends for recommendations of lenders (good or bad) and learn from the experience of others.
Financial professionals at the Legacy Lending Group suggest that you find at least four lenders and then compare. Depending on your financial situation, one lender will likely be better than another for you specifically.
To learn more about what to look for when searching for a trustworthy lender, click here. Remember that you need to do your homework and shop around. Don’t just compare two lenders and choose between the two—take your time and do research.
Many home buyers are surprised to find that, even upon agreeing on an offer with the seller of a home, the closing process can be painstakingly slow.
Often times, this is because mortgage companies are slow to fill out and file necessary paperwork. To speed up the process, be sure to go with a mortgage company that specializes in quick closing procedures.
Overall, the process of finding and buying the home that is right for you will take some time and is not something you should rush into.
After all, buying a home is a large and long term investment so you will want to make sure the home you end up with is one you will be happy with for many years to come. Still, these tips can help you to speed up the process.