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Youre ready to buy a house; how do you "Make an offer"? There is a formal process, and the real estate agent(s) will assist you. The offer will involve: Price: how much are you offering? Under what conditions? Time: when do you want to close? Move in? Financial Terms: How much are you offering in down payment? What financing details might affect the offer? Contingencies. Does the offer depend on any other events, such as the sale of your existing home? Earnest Money: what amount are you committing to show that you are in earnest about the purchase? Deadlines: how long is the offer valid? An offer will include the complete legal description of the property, and a few other formal details. Keep in mind, it is "an offer, not a deal." Buyers will frequently provide a counter-offer that changes some of the terms to meet their desired outcome.
It is difficult not to hit information overload while looking at possible home purchases. Take pictures, measure and maintain a scorecard as you go, but pay especial attention to these things: Maintenance and Potential Problems. Look critically at systems like heat and AC; appliances and working mechanisms like doors and garage doors. Observe the roof as best you can; even though it will probably be inspected, its a critical aspect of each house. Look down! Carpets and floors are big wear points. Ask lots of questions about the house, and include questions about the neighborhood and community. Look for clear and complete answers as you go. Consistent questions and a scorecard will save you time in the long run. This free Federal resource may be useful: https://www.hud.gov/sites/documents/CHECKLIST-EN.PDF
Watch this short video for some useful tips for the overall home-search process. These include: Take lots of pictures of each. Outside, key rooms, yard, garage and features you care about. Comparing pictures is faster than re-visiting. Document and "score" as you go. Measure — ideally, the same measurements for each place. The Federal Housing and Urban Development agency - HUD - provides a helpful scorecard to use. They recently moved the scorecard; heres the new web address: https://www.hud.gov/sites/documents/CHECKLIST-EN.PDF Alternatively, keeping record on a smartphone with an app or spreadsheet may facilitate the process, especially for couples and families.
Buying a home is so complex that getting started may be intimidating. Ask yourself some basic questions before getting deeply involved. Are you prepared financially and emotionally to make the long-term investment and commitments involved? Are you clear on your budget, both up-front costs and monthly costs? Have you discussed the things youre looking for in the house — space, rooms, features and the rest — in advance? Have you narrowed down the places that you think will fit your life? You will find it easier to get started after being clear on these key factors; writing them down may even help you stay objective through the many decisions to come.
Buying a home is a complex decision financially and emotionally, with long-term effects on life. Being clear on your housing needs and wants before starting can help make the process easier. As much as possible, your home should fit the life of everyone living there — space, features, neighborhood, and more. Try to agree on your priorities before you have narrowed down to a particular house. Things to consider: Home features. How many bedrooms? Offices? Garage size? What are your must-have and like-to-have criteria for common areas such as kitchen, living room, and media room? Home size. Square footage is a big factor in pricing; how does your desired size compare to your current situation? Lot and yard. The outdoor space around the house may be a big or small factor for you. Other amenities such as distance to work and schools, neighborhood character, parks and common facilities, as well as in-house amenities — everything from the floors to the roof — are also part of your decision process. The experts advise knowing your minimum requirements — those must-haves — and your wish list of nice-to-have features.
The mortgage Loan Estimate includes two lists of services involved in the loan process: services you CAN shop, and services you CANNOT shop. Borrowers are free to shop and compare the first list; they may have the lender provide these services, or another part. Borrowers MUST use the lender or listed provider for services on the other list. The CAN shop list might include the following: Pest Inspection Property-Line Survey Title-related services. These might be broken down further: Lenders title policy, protecting the lenders interest in the collateral (usually, the property.) Settlement agent fees, to cover the costs of facilitating the final transaction. Title Search, to document legal ownership of the property. Title Insurance Binder, which allows use of the title search results for a period of time. Fees from providers on the list provided by the lenders are restricted by the Loan Estimate figures; their fees cannot change by more than 10% between estimate and closing disclosure. Providers not on the list are not restricted by the Loan Estimate; the lender is not responsible for changes in their fees or variances from the estimate.
The mortgage Loan Estimate includes two lists of services involved in the loan process: services you CANNOT shop, and services you CAN shop. See the other video in this series on "can shop." The Cannot Shop list covers fees and costs for outside parties (not the lender themselves). This list may include: Tax status research on the property Tax monitoring on property-tax payments Appraisal, which gives the lender a reliable value for the property Credit Reporting on the borrower. Flood Risk fees Flood Zone Monitoring Fees for these services in the Loan Estimate and in the final Loan Disclosure must match. There is ZERO tolerance for change on these items under lender compliance regulations.
Lenders supply a Loan Estimate form for valid mortgage applications. This form documents these essential elements of the approved loan: Services borrowers CAN shop in relation to the loan Services borrowers CANNOT shop Loan terms Loan costs Project payments Cash and costs required to close the loan A loan summary to aid comparing this estimate to other estimates. Loan Estimate forms also provide details about loan assumption policies, appraisal, insurance, late-payment policies, and refinancing. The Estimate should also disclose whether the lender intends to service the loan directly. All Loan Estimates are not identical. Information that is NOT related to a specific application may be excluded. Careful reading and comparison is always a good practice.
By law, a mortgage loan application is valid when these things are provided to the lender: Loan Amount applied for Estimated Property Value Property Address Borrower Name Borrower ID — preferably Social Security Number Borrow Income Supplying these establishes a legitimate loan application under the Federal TRID guidelines. While submitting these in written form is preferable, providing them in conversation — live, phone call, or video conference — is also valid. You should request a written record of the conversation, of course. Once supplied, these 6 facts start the clock for a lender. Under the TRID guidelines, financial institutions must return a Loan Estimate within 3 business days. (See other videos on Loan Estimate details here.)