1. Select a Loan Officer and Get PreApproved:
There are many loan options. A loan officer will be able to help personalize your search for loan options that fit your specific financial situation. They will be able to break down your monthly payment and let you know exactly how much house you can afford. This number does not always match what you are comfortable with. Create your own personalized budget and stick to it. Make sure to complete the loan application with your loan officer and submit any and all required documents in a timely manner to ensure a smooth purchase once in escrow. Once you have a pre-approval letter, keep your finances the same. Do not make any large purchases on credit cards and do not take a loan out to buy a car. Your conditional approval is based upon this moment in time, do not change your financial situation.
2. Work with your local Realtor to find your perfect home within your budget:
Choose a local Realtor who knows the area best. Explain to your Realtor in detail as to what you are looking for and what you like/dislike about each property you view. There are many properties out there; your Realtor will be able to guide you toward properties that best suit your needs/wants.
3. Submitting the Offer:
Once you commit to a property, your Realtor will draft your offer for the property. There are many factors to an offer other than just the offer price that can help make it stronger. The comparable report your Realtor will generate is a great starting point. Depending on the loan option you’re using, who is paying the closing costs, pest inspections, home warranty costs, contingency removal dates and any additional requests in the offer – these items can drastically change the offer price. Listen to the advice of your local realtor who follows the market daily. Depending on the market, the above terms can and should change in order to get you into your dream home. Your Realtor will write a strong offer in your favor, while ensuring they still get your offer accepted. Be open to negotiations and counter offers. Remember your budget and make sure you are comfortable and committed before moving forward into escrow.
4. Your Offer is Accepted!
5. Escrow is now opened:
You will have 3 days to submit your EMD (earnest money deposit, i.e. good faith deposit).
6. The next 3 steps happen simultaneously:
First. Typically, seller will have 7 days to submit their disclosures about the property to the buyer. We suggest scheduling your Home Inspection for after you receive the disclosures from seller. In other words, when you open escrow, schedule your Home Inspection for 5-7 days out from the start of escrow. In a typical escrow, you will have 17 days to conduct any and all physical investigations of the property. Work with your Realtor in regards to potential “request for repairs” or “credits.” Depending on the terms of your offer, a request for repairs might play a big part or no part at all. During this time, you will also want to shop for Home Owners Insurance. You will have up until the last week of escrow to inform the escrow company who you are using for Home Owners Insurance. Be on the lookout for the Escrow Instruction Packet from your escrow company (via email or the USPS mail). Your Realtor has already reviewed the terms in this packet that relate to your purchase. Please review, complete, sign, and send back to the escrow company no later than a week before closing.
Second. Your Realtor will oversee the Formal Loan Application process and underwriting processing. Final credit report will be ordered, verification of Income/Assets/Debts, Appraisal ordering. Your loan officer might ask for additional finance documents or updated documents at any time. Make sure to get any and all documents to your loan officer ASAP. Time is off the essence to make sure your lender can fund your loan on time.
Third. Your Realtor will oversee the Preliminary Title Report process. Title search will be conducted by the Title company. Any and all easements/liens can be addressed by the title company.
7. Contingency Removal Time Frames:
Traditionally you will have 17 days to remove the Physical Contingency and 21 days to remove the Loan and Appraisal contingency. Once you remove contingencies, your EMD (good faith deposit) funds will go “hard.” You will not get your EMD back if you cancel the contract at this time. At this point, you are 100% committed in moving forward with your home purchase. Your job is to ensure you are comfortable with the Physical aspect of the property. Your Realtor’s job is to ensure your loan has been processed so you can have your Full Loan Approval on time. Your Realtor will also be focusing on the appraisal to ensure the report is ordered on time, appraisal scheduled/conducted, and the Appraisal Report is back in hand on time.
At this point, you are (typically) 21 days into escrow, your loan has been fully approved and your loan officer will soon be sending you the Closing Disclosures. The Closing Disclosures will have the final details about your mortgage loan. It will include the loan terms, your projected monthly payments, and how much you will pay in fees over the term of the loan. Make sure to discuss any questions you have at that time with your loan officer – time is always of the essence. The sooner you sign the closing disclosures, the sooner your lender can start generating your loan documents. Your lender will first send your loan documents to escrow. Escrow will connect with you in regards to a day/time for a notary to come to you for signature on your loan packet. They will schedule this signing for usually around 3 days before your scheduled closing date.
9. Final Walkthrough:
Your Realtor will schedule your final walkthrough for 3-5 days before closing. During this time, you are ensuring the property is in the same condition it was in when you initially wrote your offer. If the seller agreed to any repairs, now is the time to ensure the repairs were completed. You can request for seller to be present to show you how to work certain items in the house or on the property if needed.
10. Signing Loan Documents:
You will be sitting down with a notary to physically sign your loan documents at a time and place convenient for you. In your loan packet, your lender will have the exact dollar amount of your closing costs and down payment, which is your “cash to close.” Wire your “cash to close” funds to escrow ASAP. Once escrow has your cash to close and signed loan documents, your lender will fund your loan.
11. Your loan is now Funded!
This typically happens one day before closing.
12. Title Records:
Title for your property will be recorded with the County Recorder’s Office. This office is closed weekends and holidays. If your closing date falls around a holiday, expect delays of recording. Your Realtor will keep you up to date on all scheduling. Once your Realtor receives Confirmation of Recording from the title company and escrow company – they will immediately inform you. You are now the proud owner of your beautiful home!!
Unless otherwise noted, you shall receive the keys to your new home by 6pm on the day title records (closing day).
**There are many moving parts while purchasing a home. This is a generalized description. Your offer and timelines may differ. Your Realtor will stay in contact with your loan officer, appraiser, title company, escrow company, seller and seller agent to ensure everyone is working together, staying on track and working towards the goal of your home ownership. Please do not feel overwhelmed. You should aim to educate yourself on the home buying process but ultimately, your Realtor will guide you through the process and will let you know each step and what you should be doing at that time.
*** Wire Fraud Warning ***
DO NOT wire funds to escrow from wire instructions that you received via email. Escrow companies DO NOT email wire instructions. You will need to call your escrow company for wire instructions.