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  • Writer's pictureChris

Understanding The Home Buying Process!

Buying a home can be super stressful, especially if you don't know what to expect! In this weeks blog post, we break down the flow chart of buying a home, and what to expect and when! Any questions? Message us any time!

  1. Pre Qualification (or Pre Approval) letter.

This is SUPER important, and will let your sellers know you mean business. The difference between a prequal and preapproval is that a pre qualification letter is usually more casual, maybe a phone call with a lender taking your word on your debt to income ratio, whereas a preapproval means that lender has run your credit, and verified your income to make sure you're not only qualified, but approved for a loan.

2. Submit your purchase contract!

This one seems kind of self explanatory, but you can't move into your new home without finding your new home. In NJ, it's pretty laborious, submitting an offer is in the form of a full purchase contract, but it's how we roll. Get those 20 pages or so signed and submitted to the seller ASAP!

3. Attorney Review.

Now not all states have this process, but in our section of NJ, both the buyer and the seller have attorneys. This phase is where they both sign off and agree on the contract as presented, or after modification, and once both attorneys sign off, you are officially UNDER CONTRACT! Woohoo! That means the sellers can only accept backup offers, and you are safe.

4. Inspections.

Now that you're Under Contract, it's time to get those inspections lined up! Usual inspections include, home inspection, termite inspection, radon (if there is a basement), but some others include septic (if a rural property), well test (paid for by the seller in NJ), and of course, the always important oil tank sweep. Once your inspections are done, if you want to ask the seller to fix some things, put it in writing, and negotiate it, this is called the end of the "inspection contingency". Once settled, the inspection phase is complete, and you are off to the finish line!

5. Appraisal and Title.

Now that you know this is yours, and your inspections went fine, its time to order title (which searches the ownership and guarantees once closed, only you have ownership and nobody else) and appraisal (the bank verifying that the property is worth what they're lending you), you're good!

6. Mortgage Commitment.

Assuming you've been supplying your lender with all the needed documents thus far (and there are a lot needed), your lender now has title and appraisal, they can issue you a mortgage commitment letter. This states that you're ready to go and have satisfied all the contingencies within the mortgage process!

7 Obtain Insurance & Switch Utilities.

Closing is nearing, time to get that homeowners policy active and switch your water, gas, and electric over!

8. Clear to Close & Walkthrough.

Now you're in the home stretch...your lender issues a "clear to close" which means the funding is ready, and you do your walk through! The walk through being the day of closing is SO important, as you are liable for garbage left behind or repairs not rendered once you close, so go back with a punch list and a fresh set of eyes, and make SURE its the way it was supposed to be for closing!

That's it for that, and we will see you all next week!

Chris & Nikki

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