Need help buying a home? Here's more about the buying process...

The Home Buying Process

First and foremost. If a buyer is not paying cash to purchase a home, they need to speak with a lender and obtain a pre-approval for a mortgage letter before doing anything else. We would be happy to help you find a lender that’s best fitted for your situation. A mortgage pre-approval is a requirement of most sellers! Without one, most sellers will not even look at your offer. IF, the lender is not able to issue you a pre-approval, we have a relationship with an excellent and very reasonable credit repair company! Please let us know if you would like our assistance with locating a lender.

IF, you are a cash buyer, please have your POF (proof of funds) available to submit with any offer.

Property Search. We will be happy to setup a customized property search for you upon request. However, it is in your best interest to already have received your pre-approval letter BEFORE asking us to show you any homes. In the past, we’ve had clients go home shopping without being pre-approved first, they fell in love with a home only to have their dream smashed when they found out they weren’t able to get a mortgage. So, it’s become our policy to insist that our client’s are pre-approved before viewing any homes. We will email you the homes in your chosen areas. We would need to know what your “requirements” are in a home. How many beds/baths, do you require a garage or basement? What city, county or school district, etc? Once we have that information, we will begin sending you updated listings.

How much money will I need? The amount of money that you will need to purchase a home can vary greatly. If you are purchasing a home with an FHA mortgage, the down payment is 3.5% of the purchase price of the home. There are some areas that you can get into a home with as little as $500 down, but the location of the home is one of the determining factors as to whether or not that loan type will be available.

Closing costs. You need to be prepared to have additional money available for closing costs. In most cases we can get the seller to pay for the majority of them for you, but some sellers will only pay a maximum of 3% of the purchase price and some will pay 6%. Closing costs and pre-paids required by the lender typically range from $3500-$6000.

Closing costs for a cash transaction are much lower. Their range is anywhere between $350-$1000.

Do different banks offer different types of loan programs? Most banks offer very similar financing programs. However, in some cases a bank may offer its own type of programs targeted at specific types of borrowers and might offer some promotions as well. We will be happy to help you find a lender suited to your needs.

What if the home needs repairs? Some homes are available for cash buyers only. Some may require an FHA 203k renovation mortgage depending upon the scope of the repairs needed. We also work with a lender that can finance repairs into the mortgage as long as the appraisal supports the combined purchase price + repairs dollar amount. The FHA 203b loan with repair escrows is a very rare product and can be a very lucrative product for you as it offers much lower closing costs, fees and interest rates than the FHA 203k product. Please understand, with either product, the majority of the repairs must be done with a certified contractor. You cannot do the repairs yourself with the exception of a few minor types.

What happens after the offer is submitted? The buyer’s agent submits the offer to the seller’s agent, who in turns presents it to the sellers. If it is a bank owned property, the seller’s agent will deal directly with an individual employed by the bank who’s called an “asset manager.”

How long will it take to know if my offer is accepted by the sellers? The time can vary greatly between sellers as to the time involved in the acceptance, counter-offer or denial process. It can range from as little as a few hours to several days. It depends on their work load, their eagerness to unload the property etc.

How long until closing, once my offer is accepted? When buying a home, anything can surface that might delay the closing process. In bank owned homes, it is not uncommon for title issues to surface which can greatly impact the closing date. Before any seller transfers title to the buyer, it is to be clear of any known defects or errors.

If the purchase is a simple FHA or conventional transaction, you can close in as little at 4-6 weeks. If it is a 203k or 203b with repair escrows transaction, it can take as little as 7 weeks or possibly longer depending on the amount of repair estimates that need to be obtained, etc.

Is purchasing “owners” title insurance necessary? Owners’ title insurance can help protect the buyer in the situation of boundary disputes, claims to the property by heirs, undiscovered liens on the property; just to name a few. It is HIGHLY recommended especially when buying bank owned foreclosures, short sales or HUD owned homes!!! In some cases, the seller may be willing to pay for and provide the policy to the buyer if certain conditions are met.

Do I have to submit an earnest money deposit? Most sellers will not accept an offer without a sizable amount of earnest money deposit. Usually $500.00 - $1000.00 is most common, the more, the better your offer appears.

What happens to my earnest money if my offer is accepted or declined? If the seller accepts your offer and all documents are signed by all parties, it then becomes a valid “contract”. The earnest money is then deposited into a non-interest bearing brokerage account. The money will be applied to the buyers’ credits on the closing statement. Once the contract is valid, the earnest money could be non-refundable, especially if the buyer declines to abide by the terms of the contract. If the home inspections reveal serious defects to the home and the seller declines to make repairs or credits to the buyer, then the earnest money should be returned to the buyer; however, it isn’t automatic and requires written approval by all of the parties involved.

Should I have the house that I’m buying inspected? Home inspections are always recommended for any type of home purchase by a qualified company. We can offer suggestions if you don’t know of any inspection companies, however it’s ultimately your choice of which company you want to use.

The cost of the home inspections range from $250-$500 depending upon the company and the amount and types of inspections you are requesting to be done. The buyer pays for the inspections including activating the utilities in most cases.

How low will the seller go in price? The only way to know “how low” the seller will go in price is to “make an offer.” There is no magical formula used to determine the bottom line the seller is willing to accept. The bank and HUD owned homes are being priced VERY aggressively. In many cases they actually sell for MORE than asking price!!!

Buyer gets pre-approval letter & earnest money check is submitted with offer à Buyer’s agent presents offer to seller’s agent à Sellers’ agent submits it to the seller àSeller will either accept, reject or counter-offer à The buyer will accept, reject or counter-offer à Negotiations (if needed) à Buyer makes application for a mortgage (if needed) à The lender will gather and process all necessary financial documents from buyer à Once the mortgage paperwork is ready, it’s then submitted to the title company à Title company examines legal documents pertaining to the property purchase and requests are made of any surveys or needed documents à If all of the legal documents pertaining to the property being purchased are in order, then the closing is scheduled.

If you have any additional questions or would like to be added to our FREE REO mailing list or have a free “customized” search done for you; Please call: Martin (Marty) Snyder , 513.292.9374 or email: marty.snyder@homeexpertsrealty.net or my business partner, Greg Hancock, 513.292.2235 or email: greg.hancock@homeexpertsrealty.net Our website is: www.swohiorealestate.com

Please let us know what we can do for you!

The home buying process can be quite complicated and every transaction has its own caveats. Please understand that a variety of issues can surface which might affect any of the datelines mentioned above.

We are the Home Experts!!!