1

Choose a lender

Get pre-qualified. You can’t buy a home without getting pre-approval from a lender unless you are paying cash. Your real estate associate maybe able to assist in providing recommendations for lenders based on your financing need.

2

PRE-APPROVAL

Have your lender give you a Pre-approval Letter. A pre-approval letter is a letter from your lender stating that you are approved to buy a home. You will need this document when your sales associate submits an offer on a home. Take your pre-approval letter with you when you go home shopping.

3

Choose a realtor

Choose a sales associate that is a licensed REALTOR. Communication is key here. Tell them what you expect in a home, what you desire, and what you have always dreamed of. You probably won’t get it all, but you know what is most important to you and make sure your sales associate knows too.

4

View potential homes

Be prepared to make an offer. You may find your dream home on the very first home you see, or further down the line. Many buyers are disappointed because they didn’t act quickly and lost the home to another buyer

5

Bring your checkbook

You will need to submit and Earnest Money Check with an offer. A common amount is 1% of the purchase price ($1,000 on a $100,000home), but a seller may wish to see a larger amount. This money shows the seller that you are serious about buying this home. The seller knows that the larger the earnest money, the more difficult it would be for you to walk away from it if you just change your mind. It will be applied toward your down payment or closing costs. It won’t be lost, but applied where needed. The earnest money check is usually made out to the listing broker and will be deposited in their trust account until closing day.

6

submit your offer

Your sales associate will submit your offer. Your completed offer will be submitted with copies of your earnest money check and your lender’s pre-approval letter. A deadline will be put in the offer by which the sellers must respond. If the sellers do not respond within the time deadline, the offer is void.

7

the counteroffers

The sellers may agree to and sign your offer immediately, or the may submit a counteroffer. The Seller’s Counteroffer may include a few changes they wish to make regarding the terms of the sale. You have the option of agreeing to their counteroffer or submitting your own counteroffer. If you and the sellers cannot reach an agreement, the offer are void and you can start new on another home.

8

deliver the Earnest Money

Your sales associate will deliver the Earnest Money. Once all parties have signed the contract, your sales associate will deliver the earnest money to the listing broker or the title company where it will be deposited into a trust account until closing day.

9

Have the property inspected

Have the property inspected by professionals to be informed of its condition. You may have as many types of inspections as you wish. In most cases, a general home inspection and a termite inspection will be completed. Your sales associate may supply a list of possible inspectors upon your request; however, the choice is up to you. The average price for a standard home inspection is approximately$250-$350. Average termite inspections are approximately $100. Should the inspections reveal damage beyond what you feel is acceptable, you then have the option to be released from the contract at that time and have the earnest money returned to you. In any event, it is your responsibility to pay the inspectors at the time of the inspection.

10

complete the trr form

Your sales associate will help you complete the Treatments, Repairs and Replacements Form (also known as the TRR form). Your sales associate will work with you on completing this form based on needed repairs found during inspections. Your sales associate will submit the TRR to the listing associate for the seller to agree to and begin repairs. The Seller may disagree, renegotiate, or modify the TRR.

11

schedule the Closing Date

Your sales associate will schedule the Closing Date (this is usually the day ownership is transferred) which agreed to when you submitted your offer.Choosing the title company is usually up to you (the buyer). You may ask for a list of recommendations from your sales associate.

12

submit all documents

Promptly submit all documents to your lender if required, such as bank statements, paycheck stubs, income taxes, etc. This is top priority and if not completed in a timely manner, it may delay closing. It is important that your financial picture (i.e. cash on hand, debts, expenses, etc.) remain stable through the process. Any new debts or large expenditures can hinder your loan and even result in your loan denial.Wait until after closing to buy furniture or other items you will need or want for the home.

13

obtain insurance

You need to obtain insurance for your new home. Work on this as soon as your offer is accepted by the seller. When your sales associate gave you an EstimatedBuyer’s Cost Sheet, it showed your estimated monthly payment that included an estimated insurance amount based of averages for your area. It was by no means an exact quote. Insurance companies differ in their coverages and rates.It would be prudent to compare quotes from different companies. The lower your insurance, the lower your monthly payment will be. When you have selected your insurance agent and company, give that information to your sales associate so they may forward it to your lender and the title company for processing.

14

overcome any obstacles

You will be waiting for the seller to complete the repairs and for your lender to complete the lending process once you have completed the above steps. Your loan will be in what is called “underwriting.” Each component of your financial status will be evaluated by a team of qualified financial experts to verify that you are able to repay the loan. They will also be determining that the money you are applying towards down payment and closing costs is from valid sources. If the money was given to you from a parent or friend, you will need what is called a“gift letter” to verify from where this money came. Saving large amounts of cash in your mattress and then trying to use it for a down payment is not a good idea and you may be denied the loan because they will not be able to verify from where the money came. Work closely with your lender to overcome any obstacles that may occur in underwriting. Don’t get discouraged, obstacles are common and your lender will be experienced at overcoming them.

15

appraisal

The lending company will send out an appraiser to determine the market value of the home. This costs approximately $450 to $500. Just like the inspections, this is a cost you must pay even if the purchase does not go through. If he/she is an appraiser for FHA or VA, they will also determine if the home meets FHA or VA requirements. To view these standards, you may go online to these websites: www.hud.gov/offices/hsg/sfh/ref/chap1.cfm for FHA or www.homeloans.va.gov/faqcv.htm for VA. It’s a good idea to review the guidelines prior to shopping for a home. Please keep in mind that many foreclosures, and properties that are advertised “As-Is,” may not qualify for FHA or VA financing.

16

the Title Commitment

Your sales associate and lender should receive a Title Commitment for the title company just prior to your closing date. This is a written statement by a title insurance company setting forth the conditions under which it will insure a particular parcel of property against undisclosed title issues.

17

Call the utility companies

Have services transferred into your name. This can usually be done by calling the local gas, electric, water and garbage companies.Be sure to tell the service provider that you wish to “have the service transferred to (your name) on the day of closing with no interruption in service.” Your sales associate should be able to provide you with the contact information. Most utility companies can be found at rognasteam.com/referrals

18

HUD-1 Statement

Your sales associate and lender will receive a HUD-1 Statement. This is a form used by a settlement or closing agent itemizing all charges imposed on a borrower and seller in a real estate transaction. This form gives a picture of the closing transaction, and provides each party with a complete list of incoming and outgoing funds. “Buyers” are referred to as “borrowers” on this form even if no loan is involved. Here you will see all closing costs itemized and the amount, if any, which you will need to bring to closing in the form of a Cashier’s Check.

19

Bring your Cashier’s Check

Bring your Cashier’s Check and your Driver’s License (or other photo identification) with you to Closing! This is the exciting day when both the sellers and buyers will sign over title of the property. You will also sign your mortgage and your loan note on that day. The mortgage puts your home up as collateral for the loan and the note is the actual commitment to repay the loan. If you are married, your spouse will need to attend and sign certain documents even if they are not going to be on the note or the deed. You usually receive keys to your new home at closing.

20

the closing

Funding is when the title company physically receives the funds to pay for the home. This usually occurs at the time of Closing; however, if the Closing is late in the day, the actual funding may not occur until the next morning. In rare cases, it may take a few days. When the title company receives the funds, they pay off the seller’s mortgage, any unpaid invoices for inspections or repairs, sales   compensation, and title fees. The balance may then be paid to the seller. Many contracts state that a buyer takes possession “at funding,” which is not necessarily“at closing.”