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    Anatomy of a Home PurchaseOpen or Close

    For most people, finding the right home begins with a house-hunting strategy combining personal preferences, guidance from others (including an agent) and a mix of neighborhood exploring and online search.

    For some, the search takes a while; others find what they want right away. In either case, your real estate agent can be a huge resource of insight and guidance, working through issues or complications that arise along the way.

    Here’s a general outline of what to expect during a home purchase, from the buyer’s perspective.

    Buyers make a purchase offer.
    This is it! You’ve found the home of your dreams, looked over disclosure documents, reviewed comparable sales data, talked it over with your agent and submitted an offer. The sellers may accept your first offer, but more often will return a counteroffer. In fact, additional negotiations are common, and your agent will help you through this generally stressful stage.

    Check out our interactive HUD-1 and GFE (Good Faith Estimate) documents so you’ll know what to expect when these appear lap during the transaction.

    The sellers accept.
    Once everyone is happy with the terms, the parties have reached what is known as mutual acceptance and enter into a purchase and sale agreement.

    Buyers put up earnest money.
    To solidify your intent to buy, you’ll place a deposit, or earnest money, on the property. The amount varies, but is generally at least 1 percent of the purchase price. You’ll write the check to the escrow company, not the seller. Note: This money counts toward your down payment later.

    Escrow opens.
    The earnest money deposit goes into an escrow account, where all funds will be held until closing, when they are then distributed to the right people (lender, mortgage broker, title insurer, real estate agents, etc.).

    Buyers apply for a mortgage.
    This step is streamlined if you’ve already been preapproved for a loan (which is a smart thing to do). If not, you’ll begin the loan application process now.

    The lender inspects title history and orders a property appraisal.
    The lender needs key information about the property before granting a loan. This is when potential problems can come to light. For example, the appraisal could show a lower value than the purchase price, or the lender could have trouble finding comparable homes. Also, the title search could turn up liens or other problems.

    A home inspection takes place.
    You’ll hire an inspector – generally, your agent will suggest one, or provide several options – to check the home and point out minor and major problems that should be fixed before closing. At this point, you still have the option of backing out of the deal. Through your agent, you’ll submit a list of requested work, and the sellers have the option to complete the tasks, do some of them but not others, or reject the request. The sides will negotiate until reaching an agreement.

    Removing contingencies.
    If the house passes inspection, appraisal and title search, and everything is good to go, then all contingencies can be removed, paving the way to a closing.

    Closing time arrives.
    Once contingencies are removed and financing is set, all parties sign a seemingly endless stack of documents, and the transaction closes.

    Packing begins!
    When the final signatures are in place, it’s time to put down the pens, shake hands, exchange smiles and start packing for the move!

    Contact us today for more information about the home purchase process

    About the Author

    Janette Ledea ()

    Certifications CDPE: Certified Distressed Property Expert EPRO: e-PRO GRI: Graduate Realtor Institute SRES: Seniors Real Estate Specialist Languages: English, Spanish Specialties: Condominiums, Development Land, Foreclosure Property, Investments, Luxury Homes, New Construction, Relocation, Senior Communities, Short Sales

    2 Replies to “Anatomy of a Home Purchase”

    1. May I simply say what a relief to uncover somebody that really understands what theyre discussing over the internet. You certainly know how to bring a problem to light and make it important. More and more people really need to check this out and understand this side of the story. I was surprised that youre not more popular because you certainly have the gift.

      1. Aww… thank you so much for taking the time to read it and for your thoughtful comment.

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