First time home-buyer....step by step??

Question

Can anyone tell me excatly what comes first second third and the avarage time for each to be completed etc.
does the inspection comes before you make an offer (or is it in the contract).....after you made an offer and get it inspected what happens if something is wrong with the house can you take back your offer........
what if you get it inspected and one month after you buy something goes wrong who pays for it...me?or the seller?or the inspector??
any info would be great thanks

Answer 1

First - go see a reputable lender and get pre-approved. You will generally pay more fees with a mortgage broker than with a direct lender, but if you have credit issues then a broker may be the way to go.

Then find a reputable REALTOR who you are comfortable working with, who will take the time to sit down with you and asses your wants and needs before putting you in the car, and who is knowledgeable about the local market. Interview a few if you have to! I say a REALTOR because we have a code of ethics in place that we abide buy to protect our clients (you) and to ensure the highest level of professionalism and ethics. (yes there may be some bad apples, but that is a whole other topic)

Then find a house. The offer should be continget on financing, appraisal, inspections (with many different types to choose from, home, mold, lead paint, well, septic, chimney etc ) most common is home inspection which generally looks at structural, mechanical and electrical items. You generally have anywhere from 1 week to 2 weeks after the offer is accepted and becomes a contract to complete the inspection and ask for repairs based on that inspection (or those inspections). The seller will either say yes or no to all or some. Usually at this point you can walk away if they refuse to make all the repairs, make sure though before you sign anything (even the initial offer). Other items to consider are ask for the HVAC to be serviced as part of the purchase offer and ask for a home warranty. If the HVAC breaks shortly after settlement a lot of the home warrantly companies won't cover it if you can't show it was in working order when you bought the house.

In terms of things breaking after settlement, it depends on what it is that has broken. Major appliance, if the inspector certified it that is something to consider, if you have a home warrantly it will usually be covered (though it may take some time). I could present a million scenarios here, remember structural, mechanical and electrical. If a window breaks, that is on you. If you discover the basement flooded and the seller hid it, it is on them. They do have an obligation to disclose any material latent defects, so if they know the ac doesn't work and you are buying the property in December, when the ac can't really been tested then that is a problem with their disclosure, not the inspector... There is no perfect answer unfortunately, that is why having a qualied agent and inspector on your side are key. And get the home warranty and have the HVAC serviced and spectic pumped (if applicable)

Other important things to consider:

You can certainly buy with no money down, and only have to come up with the money for items paid out of closing (poc). You can even do 107% loans, and finance those things. I can't imagine a 107% loan being a good idea in any situation, but they are out there. With 80/20 loan programs you can eliminate the higher interest rate, and mortgage insurance associated with a 100% loan.

Earnest money is usuallt $1000 min. For a higher priced home expect higher. During the boom market sellers began to expect 1%. You will get this money back at settlement as a credit to you.

Appraisal approx $350 you will pay this to the lender when you make loan application.

Application fee approx $15-$65 it costs money for the lender to pull your credit, and they look at many before they close a loan. The cost of your credit report is usually passed on to you. You pay this at loan application also.

Home Inspection $250+ depending on the size of the home. Don't buy a home without one.

Transfer and Recordation taxes - varies by county, generally around 1.5% of the sales price, you get a discount from the state of .25% if you are a first time home buyer. (first home in the state of Maryland), paid at settlement

Title company fees for title examination, file processing, courier service, notary, etc. $200-$500, paid at settlement

Various lender fees - If you include discount points and origination fees this could get as high as a couple percent of the loan, or it could not exsist. It depends on your loan program, if you want a discount point, and your personal credit situation. There are usually a couple of hundred dollars of other processing fees as well. Also, paid at settlement.

Title insurance - you must buy lenders coverage, owners coverage is optional. This also varies based on the value of the home. It could be a few hundred to a few thousand. There is a calculation for figuring the cost, I can not remember the calculation, and my title rep is probably a sleep right now.

I generally tell my clients to be sure they get a good faith estimate from the lender before they start looking. Some of the items depend upon your credit. If you work with one of the lenders I refer, you will get a good faith estimate, and it will be accurate. (within reason, it IS called an estimate afterall.) Your closing costs at settlement will be 4-6% of the sales price of the home depending on your situation. The four fees at the top of this list are the POC items. You should also keep in mind there may be deposits for utilities if it is your first home. In a balanced market like we are in right now we can usually negotiate that the seller make a contribution to this costs. It reduces the amount of money out of pocket for the buyer. If we target our search a bit, we can find a seller willing to pay it all. (with the exception of the POC items)

Hope this long drawn out answer gives you a good idea of the process and costs...

Answer 2

the inspection is after they accept your offer. Make sure the paperwork for the accptance offer says contingent upon inspection so you can take back your offer. Before you close on the house you do a final walk through.Do it the day of the closing and if anything is broken or damage it is the seller's responsibility to fix it. If you don't do a final walk through and you close then find out there's some damage you are now responsible. ask a lot of questions about the plumbing, electric, water damage or past leaks and whatever you can think of that way if something comes up later and they denied there was a problem or lied you can sue for damages to recover the amt of $ you spent to repair

Answer 3

Hi, I am a real estate broker, and I would advise first-time home buyers to get pre-approved for a mortgage before looking for a house. This makes the process a lot easier for all parties, and in applying for a mortgage you will know exactly what you can afford, thereby circumventing any surprises in the buying process. Also, in this competitive market, being pre-approved is key to having an offer accepted, if you are competing against other qualified buyers. So it is a very big and important step. You can ask friends, lawyers, accountants, etc., for recommendations on great mortgage brokers, and shop around if you are not happy or feel comfortable with the rate and terms you are getting. Then its time to find a great agent and figure out your parameters and strategy. Good luck! I hope you find your dream home! :-)