Buying or selling your home is a huge commitment!
The Home Buying Process
Making an Offer on a Home
- When should I make an offer? If the house is 80% right, 10% things you can change, and 10% things you can live without. That's the secret formula.
- How much should I offer? This depends on how much you are willing to pay for that particular house, but you should keep in mind the overall market and how many days the house has been for sale.
- What happens after the seller accepts the offer? There will be an inspection of the property, renegotiation (if needed), and the lender will order an appraisal (the cost of which will come at closing). If the appraisal is lower than the offer price, the buyer needs to increase the down payment to make up the difference, renegotiate the price, or both.
- How much earnest money should I put down? In general, the earnest money is 1% of the purchase price, but more than that will show your seriousness. It will be deposited to the listing agent broker's trust account and will be returned at closing.
- Will I get my earnest money back if the contract is canceled due to the inspection results or financing issues? Yes, unless it is written otherwise in the purchase agreement.
- What happens if there are multiple offers on the house? The seller will typically focus on the PRICE and the TERMS. When the net prices (offer price minus the seller's closing cost assistance) are similar, no closing cost assistance is preferable because the lower purchase price has less risk with appraisal. Frequent terms of interest include the closing date, financing (usually people prefer cash, conventional, or FHA in that order), down payment amount, and the approval letter by a reputable mortgage broker.
- How long does the inspection take? The inspector will only need 2-4 hours for the inspections. You should join in for the second half, and the buyer will pay for it at the time of the inspection.
- Do I really need a home inspector? Yes, unless you are one yourself. It is important to know what you are buying.
- Can you recommend a lender, home inspector, and insurance agent? Yes, yes, and yes!
- How long does it take to close after an offer gets accepted? Usually 4-8 weeks.
Things to Expect
- You will most likely be anxious or nervous at some point during the buying or selling process. You could even have buyer's remorse!
- You will not be told exactly how much money to bring to the closing until the actual day of the closing.
- You will become irritated or annoyed about the frequent paperwork requests with seemingly impossible deadlines from the lenders.
- The lender will most likely pull another credit report or call your employer before or even on the day of your closing.
- The "buying committee" (your friends, family, and neighbors) will give you their opinion on the price and the terms whether you ask for it or not, but with the best intentions. Remember, every market is different depending on the location, price point, and the supply and demand each month. No one has studied the immediate area with your personal considerations more than you and I.
Getting ready to move? Here is a Moving Tool Kit to help you out!