Begin with preapproval:
When purchasing a property, your first step before driving around looking at properties, contacting a Real Estate Agent to show you properties is getting preapproved by you mortgage lender. Work with a mortgage lending agent to identify the exact price range for which you are qualified, and to present yourself as a very serious buyer to the seller.
Do your research. Make a "wish list”: of characteristics that you would like in your new home. A Buyer's Agent can help you find available homes in your price range.
Make an offer. Once you have found a property you would like to purchase, your real estate agent will assist you by preparing an offer, which will include among other things, the purchase price and closing date. The offer may also include contingencies for a home inspection, pest inspection or financing and will be presented with an initial deposit - usually $1000. The seller may accept, counter or reject your offer. If there are many offers on the same property, the seller- may opt for a sealed bid. This means that each offering party will make a final offer in a sealed envelope. The best offer prevails.
Schedule an inspection. Home inspections are used to identify concerns about that condition of the property prior to signing a P&S. A certified home inspector is trained and licensed to assist the buyer in this process. If you find items that need to be repaired, you may repair them after closing or request that the seller repair them or credit you the money for repairs.
The property is not the only item you should inspect. Gather all of the paperwork that comes with the home - if you are buying a condominium unit, Condominium Documents include a Master Deed, Declaration of Trust, Rules and Regulations, Condominium Association Approval, Annual Budget and the amount of money in Reserves. In the case of a new condominium, the developer will create a draft budget with good faith estimates. If you are buying a building, you may want to check with City Inspection Services to make sure the property is properly zoned for its current or projected use.
Signing the Purchase and Sales Agreement (P&S). The P&S is a more detailed agreement than the offer. This step is marked by payment of an additional deposit (which may be up to 20% of the purchase price) and the negotiation of additional terms of the purchase. You may wish to consult an attorney to assist you with the negotiation and finalization of the P&S, or to assist you with reviewing any other documentation.
Securing financing. There are many types of mortgage loans. Work with a mortgage lending agent to decide which loan program works best for you. Submit an application and obtain a commitment letter from your lender. Obtaining a loan commitment on time will fulfill your mortgage contingency. Your lender will assign a closing attorney for your loan, who will research the title, prepare the closing documents for your lender and schedule the closing.
Conducting the final preparations. Most lenders for home sales require that the buyer has insurance prior to closing. Be sure that you are fully insured. Condominiums should have a Master Insurance Policy that generally fulfills your lender's requirements for insurance. The Master policy will cover the condominium building, commonly owned property and liability insurance for the association. You will need an additional policy to cover your possessions.
Review your closing costs. There may be legal fees, points paid toward your loan, advance condominium fees, filing fees, real estate taxes or other cost that you will be responsible for at the closing.
Conduct a walk-through inspection. Prior to closing, schedule a walk-through to verify that the property is in the same condition as when you last saw it and that it meets the terms of the contract (i.e. clean and vacant). Make a list of concerns that need to be addresses prior to closing. The resulting list is called a "punch list." If the parties agree, some of the funds due to the seller as a result of the sale may be held back until the repair or completion of the punch list items.
Closing the deal. Arrive on time at the prearranged location for your closing. Bring the funds required in the form of a bank or cashier's check, made out to yourself. This insures that you can redeem the check in the event of a last minute postponement or cancelation. You may also have the funds wired directly to the closing attorney. Bring your checkbook for minor adjustment fees. You will also have to sign a lot of documentation. The closing is usually about one hour. You will leave with copies of the documents you have signed.