You’ve found your dream home. What comes next? PrimeLending can let you know what to expect when it comes to actually buying a home, from extending an offer through closing. Our experts are always here to be your guide.
STEP 5: The Process
You’ve found the perfect home. Now what?
Extending an Offer
Purchasing a home is a transaction that involves heavy negotiations. A REALTOR® can be a valuable resource to have on your side as you determine the appropriate initial offer to extend. During this part of the process, you’ll want to consider the following:
- To add extra weight to your offer, you’ll want to provide the prequalification* letter from your PrimeLending loan officer.
- Sellers obviously prefer an offer with financial security.
- Make sure all of your negotiations are in writing. This will provide a record of deals and decisions made as well as help clarify any misunderstandings.
- You’ll want to have money ready to use as an earnest money (or “good faith”) deposit. While the amount varies depending on your location, all of it will be placed into an escrow account until the purchase transaction is complete.
The seller has accepted your offer. Here’s what you’ll need, now that you’re in the final stretch:
- Review the loan commitment with your PrimeLending loan officer and be sure you understand your loan’s rate terms and any additional requirements or details.
- Obtain homeowner’s insurance and, if required, flood insurance.
- Using your loan commitment and purchase agreement as guides, set a closing date and time.
- Verify with the closing agent or attorney that a property survey was ordered.
- Prepare to move by making a checklist of necessary actions and setting timelines.
- Do a final inspection of the home you are about to purchase.
- Confirm that you have met all the guidelines and conditions in the purchase agreement established by the seller. The purchase agreement is detailed below.
- Bring the total you owe in closing costs in the form of a certified or cashier’s check to your closing appointment.
- Typically, personal checks and/or cash are not accepted.
The Purchase Agreement
Money has now officially changed hands, and you’re getting closer to the end. You will now need to finalize the purchase agreement, a legally binding contract between the buyer and the seller of the property that outlines all terms and features of the final transaction. This can include:
- The property address and legal description.
- The sales price and the loan, down payment and deposit amounts.
- The names of all parties involved including the buyer, seller, buyer’s agent, seller’s agent, mortgage broker/banker and any attorneys.
- Time limits that might apply to the transaction.
- Any contingencies that must be addressed prior to the deal being complete and finalized (such as the sale of the buyer’s present home, issues from the home inspection that might need to be repaired, etc.)
- Because every home transaction is different, these contracts are not exactly uniform. A REALTOR®, a title company or an attorney may assist in the negotiations and execution of a purchase contract; this is dependent on the state in which the transaction is being conducted.
The final step is the close. Luckily, now you know what to expect at closing.
*A prequalification is not an approval of credit, and does not signify that underwriting requirements have been met.