Jan. 2, 2020
Understanding the Home Buying Process presented by NJ REALTOR® Pablo Lopez
The Home Buying Process - this information is shared by a NJ REALTOR® experienced in Passaic County, Bergen County, Hudson County and Essex County. The process of buying a home varies by state and might vary in other counties in New Jersey please check with your real estate professional in your area. The content is intended to give you an outline and provide guidance during your home purchase in Northern New Jersey. Now that we’ve got that out of the way lets start by congratulating you for taking the first steps towards homeownership. Whether you are a first-time homebuyer, move-up buyer, downsizing we are hoping that this information will be of value to your home buying process.
1. Financial Heath - You won’t go to the mall shopping with out knowing what your budget is, cash or a credit card right? The very first step that we encourage you to seek is financing, meet with your banks loan officer or find a reputable mortgage lender there are many. This is a good time to learn about the different mortgage programs FHA, Conventional, VA, Renovation Financing, Fixed Rate, Adjustable Rate, a very good ideas to know what type of loan your are qualified. Your loan officer will request from you Tax Returns, PayStubs, Savings Account Statements, Checking Account Statements and credit. The information will help your loan officer paint a financial picture including budget, monthly payments make some projections for you to make an educated decision on your home purchase. Once you know how much mortgage you qualify for you can decide how much house you like to purchase.
2. Decisions Decisions - Deciding on your needs and wants, do you want to live in a suburban area or you want to stay in or near the city amenities. Are schools an important decision factor weighting on your decision. Committing distance, public transportation, houses of worship, shopping, are you looking for a gated community, townhouse or condominium all of these decisions are going to be major factors in your home purchase. Bedrooms, bathrooms, basement, garage, driveway family room, pool just to name a few.
3. Lets go House Hunting - Now that we know how much and where it’s time to go out and see all the available listings that meet your home needs and wants criteria. How many homes do you need to see before you make a decision “measure twice cut once” keeping this in mind you can narrow your search to the specific homes you really like. There’s a few things that you can not change in real estate i.e. Neighborhood, if you drive-by the neighborhood of a prospective house listing and you don’t like what you see around SCRATCH IT OFF!. the facade, you drove to an available listing and you don’t like the Curb appeal, architecture or anything else in front of the property SCRATCH IT OFF. Many experts will agree that a home that is not property maintain on the exterior most likely the interior is not going to be well maintained. Here’s an outline of the things that most likely your can’t change, Location, Facade, Architecture, Floor-plan. Almost everything else can be repaired, or remodel to meet your taste.
4. Game On! We found the Right House now What? - First we’ll generate a market report to determine that the house price is in accordance with the neighborhood. Agree on an offer price, downpayment and closing timelines. Keep in mind your first offer might not be accepted you need to be open to negotiate or walkaway from the deal. In our local Clifton NJ market 3-4-5 offers sometimes is what it takes to get the foot in the door. Be ready to walkaway from a deal if it you need to do so, some times it is a mistake to fall in love with the very first home you see and expect the seller to accept the offer even if you are offering full price in a sellers market that some listing are selling above asking price a good reason to have a good valuation in front of you before making an offer. For the sake of this article and keeping it as short as possible lets say that you have an accepted offer, what’s next?
5. Attorney Review Period - Once the parties buyer and seller have agreed on initial terms and condition meaning Price, Closing, and initial terms. The signed offer will go to your real estate attorney for review. Your real estate attorney will call you or request a meeting in person mind you some attorneys require a retainer. During your initial meeting your attorney will review the language of the sales contract with you terms and conditions, change add or amend any part that needs to be clarified. The sellers’ attorney will then review the terms and/or revised terms with the seller, if there’s something that the seller don’t agree too then we’ll go back and forth until mutually agreeable terms are reached or the offer is cancelled if the parties can not reach an agreement, there are many factors in this part so we will not go over every possible scenario here if you like to lear more lets connect.
6. Ok Attorney Review is Over the Offer Survived till this point - Inspection time! very exiting time this is where you learn abut the health of the house you are buying. Your inspector will go over safety, structural, radon, asbestos, plumbing, electrical, roof, mechanicals, roof, windows, appliances and termite inspection. It is a good time to ask questions to the home inspector and lear more about the house your are buying and how things work perhaps find out about maintenance of certain critical items.
7. NO ISSUES With the Home Inspection and I am still in love with the house - in a perfect world there’s always a few issues that need some attentions some critical others no so much. What every the issues some can be negotiated with the seller and request for remediation or a financial credit upon closing of escrow. Keep in mind you are buying an old house some times 100-year old house some more mothered than others. If you like to buy a new construction we can help you with that as well.
8. Time to put the pedal to the metal - literally this is a stretch to the finished line, at this point your purchase has serviced attorney review, various inspections and you still in love with your new home. Make ready for the mortgage commitment, on step one you covered a lot of ground with your mortgage company and you received a Pre-Approval subject to final underwriting. Not is time to contact your mortgage lender to go ahead to process your loan and obtain a commitment. Once your lender issues a commitment there’s are a few steps waiting to happen. We’ll outline those next.
8.1 City Inspections and Certificates of Fire and Habitability - While we are working on all the other stuff to get to closing theres no closing until the proper certificates a.k.a CO/CCO and Fire Compliance are issued by the city Code Enforcement and Fire Prevention. On traditional real estate transactions the seller is responsible to obtain the various certificates prior to closing. Foreclosed "REO" Properties is a different story all together.
9. Mortgage Commitment is in - once your received the bank/lender approval letter we’ll need to provide a copy to your title company and attorney. Title company then will oder a title and name search, crate an abstract and make sure that title is cleared of envy encumbrances or clouds that can affect the transfer of title, just to name a few: Tax Liens, Mechanic Liens, Second mortgages and so on.
10. Happy times - we’ve have a fantastic 45-days to accomplish all the above on average to get to this point it takes about 40-45 days yes that long, some times longer if there are mortgage or title contingencies. Assuming that there are no title issues, and no mortgage issues we’ll have also while working on the above obtain a CTC a what? Clear to Close form your mortgage lender. Once the CTC is issue by the bank, once the underwriter has reviewed the file and Quality Control at the bank is happy with the file then you can arrange with the parties, your attorney, seller attorney, title company, mortgage company to schedule your closing.
11. Moving Date! to be continued.
If you want to lear more about the closing process or where to get stared with your real estate purchase give us a call we’ll be delighted to help you navigate the complexities of home buying in our New Jersey neighborhoods. We are NJ REALTORs® dedicated to help you achieve your home buying needs.