Buying Real Estate can be one of the most important decisions a person will make in his or her life time. For first time buyers or even someone who has previously purchased real estate, this process can sometime be confusing. It is important that buyers thoroughly understand the process, thus enabling them to make the proper decisions.
Making the Decision
The first step in making an intelligent choice is to determine what you want, and what your needs are. Establishing your priorities will help you evaluate the properties and convey what exactly you are looking for. The next step is setting the price
Setting The Price
Before starting any serious looking, you may call on a few lenders to determine the current mortgage rates. Loan terms will help you decide how much you would be able to afford. Next: You need to determine the kind of neighborhood you would like to live in. After you have determined the criterias you are looking for, an agent can help to narrow your search to location, features, and the price you desire.
Negotiations
When you find the right property, you can make an offer by submitting an intent to purchase contract, which initiates the purchasing process. This contract indicates what you are willing to pay, and under what conditions the sale will be completed. These conditions generally include provisions that you are able to obtain financing at certain specified terms. Your offer will be accompanied by a check to indicate your intention. The contract is not binding until the sellers accept the terms and signs the contract. The seller may accept your offer by signing the contract, may reject your offer by sending it back, or propose a counter offer by modifying the contract and signing it. The counteroffer is a substitute offer; it constitutes rejection of the contract. If the counter offer is acceptable to you, you may validate it by signing the counter offer, alternatively, if the counteroffer is not acceptable to you, you may make another counteroffer. These negotiations continue until both buyer and seller achieves a suitable agreement and both parties signs the contract to indicate the acceptance. The sale contract designates the date at which the property ownership will change. When Property ownership changes, it is known as CLOSING.
Once both buyer and seller achieved acceptance of the terms, the next step is to obtain FINANCING
Financing
Lending Institutions makes most home mortgage loans; there are many types of loans available. Compare the terms. Take time to gather information on your current income, major debts and available cash. If you are self-employed or work on commission, you may need income tax returns for the past three years. You will then fill out the loan application form, stating your income, your assets and debts. You will also sign forms allowing the lender to verify information that needs verification.
The lender analyzes your application to determine if the loan commitment can be issued. The property will be appraised to determine if its value is sufficient to cover the loan. Your credit history will be reviewed to determine your affordability. The lenders will then check to determine if you can make the required downpayment on the property and whether or not mortgage insurance is required. If the decision is favorable you will be given a commitment. The commitment is good for a stated period at a stated inerest rate. Once a favorable commitment has been achieved, preparations are then made for closing.
Preparation For Closing
The Escrow company initiates a title search. Termite inspection and all other necessary inspections are initated to ensure the suitable and proper conditions for the sale. All necessary conditions are met and all contingencies removed before passing of the TITLE from seller to buyer.
Closing
On the day of closing, all parties will meet and execute the necessary paperwork to pass the title of the property. all accounts are settled and the seller passes the title to the buyer.
The seller receives the price of the property and retires the old loan(unless the buyer is assuming the old loan, or there is no loan on the property
Commission is paid
All fees are paid
The Lender supplies the proceeds from the loan and collects origination fees.
The lender usually requires interest be paid at closing to cover the period from closing day to the end of the month.
The buyer receives the documents indicating the passage of Ownership from Seller to Buyer.
Closing ends all negotiations and contingencies associated with the transaction.
As a buyer you can prepare for closing assuming that you have an acceptable mortgage commitment already.
Get a good estimate of cash required for closing, your agent can obtain this information for you
A certified check is usually required for your share of expenses on closing day.
Have all inspections made, and make sure all required repairs are completed.
Unless agreed in writing the seller has no responsibility for repairs after closing.
Make sure the survey is completed as required by the lender.
At closing you will sign several documents. These are:
Settlement Statements
Loan Disclosure
Mortgage Note
Deed(Deed transfers the title of the property to your name)
Title Policies
All Other Additional documents indicated in the transaction
Office Location CENTURY 21 SCVA Country Club 1323 Jacklin Road Milpitas, CA. 95035
Disclaimer Each CENTURY 21 Office Is Independently Owned And Operated
