Welcome to another episode of Coffee Homes and Loans, this week we will be going over the dos and the don’ts from beginning to end in a real estate transaction. Let’s get started!
Get Ready to Meet your Lender – Make sure to have all your documents ready so your lender can review them thoroughly and let you know whether you qualify. You will normally need: 2 years of W2s and tax returns, 60 days of bank statements or retirement accounts, last 30 day of paystubs, copy of your driver’s license and if you are self-employed or own a company, you will need your business tax returns, business license, profit and loss statement and any other debt/liability documentation that may apply to you such as divorce decree, child support court order, IRS payment plan, etc.
Now that you have an Approval letter – Your home search starts! This is the most enjoyable part of the process as you get to tour homes and see you or your family in this home. Make sure you keep the same job you applied with, don’t add any new debt under your credit or co-sign for anyone and save as much as you can. The property you choose will also be subject to an appraisal inspection and your personal home inspection.
Submitting an Offer – Your realtor will go over the residential purchase contract and the terms with you to make sure you understand the paperwork you are signing, the contingencies and the fees you are responsible for paying. Make sure to have an agent that will negotiate on your behalf and protect your earnest money deposit (EMD).
Once you Find your Home – We recommend that you don’t give your notice at your current residence until you are 100% sure you have final loan approval. If there is an issue with the home, your work situation changes or perhaps the program you applied for is discontinued and you must cancel the contract, you wouldn’t have to move out.
Opening of Escrow – Either the buyer’s agent or the seller’s agent will send a copy of the fully executed residential purchase contract to the escrow and title company that was chosen so the transaction can begin. They will copy all teams involved and you will start receiving emails with wiring instructions to send your EMD, loan disclosures to accept the terms of your loan, statement of information forms to complete and list of updated documentation to send.
Home Inspection – After you wire your earnest money directly to the escrow company your realtor will help you schedule your home inspection. The home inspection will incur a fee paid directly to the third party. The inspector will look at the mechanical items of the home and make recommendations for areas of concerns or sometimes structural! Once the home inspection is complete you and your real estate agent will go over any repairs you want to request from the seller.
Appraisal – This is also a third-party company that will go to the home to make sure is in livable condition and meets the FHA, VA, USDA, or Conventional loan standards and do a market analysis to come up with the value of the home to make sure you are paying a fair value for the property.
Final Underwriting – The underwrite will do a final sweep of the loan to make sure all of the requested documentation has been turned in, the property has gone through an appraisal, and nothing has changed in credit and employment. Then we are ready to draw docs and sign.
Closing – All docs are at title company, and you know exactly how much you will pay. A couple of days before, you would want to transfer utilities under your name. Make sure to have keys on hand before scheduling moving truck you never know if something gets pushed for a few days.