The Home Buying Process

One Step at a Time

This worksheet is being provided to familiarize you with the steps necessary to purchase a home. I hope that this document will help you to ask questions regarding the transaction and to understand where you are in the process at any given time.

Starting Your House Hunt

Consultation with agent to analyze home buying needs

Start preapproval process with your loan officer 

• Mortgage application
• Most current paycheck stubs

Set up auto email search

• requires email addresses of all buyers involved in the purchase
• Agent will set up a broad search to capture all the potential homes that may interest the buyers or set up multiple searches for different geographic areas or search parameters.
• Buyer feedback is essential for a successful search. The better the agent's understanding of the buyers needs the better the chance of being first in to see a desirable home or getting leads on rare off-market properties. Communication is key.

Complete loan approval process

  Some of what your Lender will need: 

• Verification of income 
• Credit report
• Past 2 years of taxes
• Miscellaneous documentation to substantiate debt and savings

Select and view properties

Agents work best with buyers who dedicate time to seeing new listings as they come on the market. I start with touring a large number of properties to get feedback from buyers on their preferred style, tolerance for "fixers" and to gauge what their reaction is to a variety of homes and neighborhoods. That information is used to prepare future home tours and narrow the home search. Once we have eliminated the homes currently listed for sale the search becomes less frequent but more time sensitive. When your agent says "you have to see this home today" you should make every effort to show up. 

Write offer to purchase

   Agent will need 

• Preapproval Letter from lender (lender contact information)
• Proof of Funds (bank statement showing where the down payment money is coming from)
• Verification of Earnest Money to Deposit into escrow upon offer acceptance

The Escrow Process

Acceptance of offer 

Seller sends back a signed (ratified contract)

• Escrow is opened
• Signed Contract sent to Escrow and to the buyer's lender
• Buyer’ Earnest Money Deposit sent to escrow by wire transfer from bank account or personal delivery of cashier’s check 

Inspection Period 

• Pest inspection
• Home inspection
• Other inspections as indicated by location or condition of property

Appraisal 

• Is paid for by the buyer directly to their lender at the time the appraisal is ordered
• Appraiser is hired by lender through a third-party vendor
• Appraiser will generally contact the buyer’s agent to schedule and appraisal inspection

Review Disclosures

• Preliminary Title Report. (Escrow company’s offer to provide title insurance subject to conditions as       outline in report)
• Natural Hazard Disclosure (California-specific report that home sellers must obtain for their buyers in order to sell a home in a natural hazard zone.) 
• Seller’s Disclosures (vary depending on type of sale)       
•  Agent Visual Inspection Disclosure ( A list of things that were visibly apparent to the agents involved in a residential real estate transaction.)       
• Home Owners Association documents (if applicable)

Negotiate or Remove Inspection Contingency

(Choices are below)

• Accept property in its current “as is” condition
• Requests seller to make repairs
• Cancel escrow based upon inspections results

Lender’s underwriting process 

(Lender will give…)

• Loan approval
• Loan approval with conditions
• Rejection

Loan Contingency Removal 

written confirmation from the lender that all conditions have been met and it is okay to remove loan contingency

Loan documents are drawn up by the lender and sent to escrow

• The buyer is provided with a Closing Disclosure or an Estimated Settlement Statement and told how much money to bring to escrow.
• The escrow officer sets up an appointment for the buyers to sign loan and escrow documentation. This can be done at the escrow company office or through a mobile notary. Out of country signings must take place at a US Embassy.
• Everyone signing documents will need a valid photo ID.

Closing Escrow

• The buyer's deposit is in escrow
• The loan funds are wired to escrow from the lender 
• Title is transferred and recorded at the county recorder’s office (same day or one day apart)
• Money is distributed to any vendors who have agreed to be paid through escrow. The real estate Brokerages are paid.
• A final Settlement Statement is generated

Buyer takes possession of the property!