How-to Monday: The buying timeline
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Few things in everyday life are as intimidating and overwhelming as first-time home buying can be. There's so much to consider, and you don't know what you don't know.
So here's a rough to-do list -- the steps buyers typically go through from start to finish.
Keith L. Cross, a Realtor with Century 21 Downtown in Baltimore, suggests that Step One -- long before you get your heart set on a particular price range -- is to get pre-qualified for a mortgage. You need to know what lenders are willing to lend you in this ever-changing market.
Next, identify your wants and needs. Where do you see yourself living? What type of house do you want, and with how many bedrooms and bathrooms?
If you're working with an agent, this is the point at which he or she will make a list of properties meeting your criteria. You decide which to see.
Perhaps you'll find something immediately. Perhaps you'll look and look and look. But once you're ready to make an offer, your agent will write it up, present it to the listing agent to give to the seller and wait for a response.
"Usually in this market, there's a little bit of negotiation back and forth," Cross says.
If negotiations break down, you keep looking. If not, a contract is ratified -- and then there's even more to do.
A home inspection to see if there's anything wrong with the property. A termite inspection to look for the wood-chewing insects. An appraisal, ordered by your lender, to see what a third party thinks the property is worth.
Also during this period, both the lender and the title company you'll be using will need copies of your contract so they can get to work on processing. The title company has to make sure, for instance, that there's nothing legally preventing the seller from selling.
When the home inspection is done, you'll probably have a list of problems to consider, small or otherwise. (There's usually something wrong, Cross finds.) You can request that the homeowner make repairs or lower the sales price to give you money to make the fixes yourself. Depending on your contract, you might have to give the seller the opportunity to make things right but be able to get out of the deal if he or she isn't cooperative, Cross says.
If the appraisal comes in lower than the price you offered, you can walk or negotiate a lower price, Cross says. "In this kind of market, you may very well get that lower price," Cross adds.
Shortly before settlement, you'll do a final walk-through of the property to make sure any agreed-upon repairs were done and to give it a once-over for unexpected new problems -- i.e. flooded basement.
"Then we go to settlement -- and hopefully everybody's happy," Cross says.
Other things for the to-do list before settlement: Get homeowners' insurance, contact Baltimore Gas & Electric, start the process for telephone service ... That list can go on and on. (Click HERE to see the sorts of things new homeowners might want to do.)
Is this buying timeline missing something -- or do you have a buying story you'd like to share? Chime in.
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Comments
First of all the buyer is free to choose any service providers - Title Company, Inspectors, Lenders, agents, etc..
No mention of:
1. Home Owner's Insurance
2. Contractors (you can use your own if negotiated)
3. You might as well give out the # for BGE: 410-685-0123
4. Call for cable and phone
5. The Water bill automatically transfers
Requesting a lower sales price is unorthadox from an appriasal. Normally the seller's agent gets to justify price. Lowering the price may be a solution. You can also check with a reputable lender if you are in a targeted "Depreciating Market" ahead of time.
You also have the opportunity to get the home re-inspected by the same home inspector (hopefully a good one).
Also, what you provided is not a timeline.
1. Get pre-qualified (before)
2. locate a house and negotiate
3. Make loan application (up to 7 days after contract)
4. Perform Home Inspection (up to 1- 14 days after)
5. Negotiate Repairs (2 days)
6. Choose Title Company (anytime after contract)
7. Get Loan Underwriter everything they need (as soon as possible)
8. Termite Inspection (before settlement, sooner the better)
9. Appraisal (get your lender on it ASAP)
10. Utilities (2 days before settlement)
12. Movers (if needed)
13. Contractors (if needed)
14 Check HUD-1
15. Get certified check from bank for closing amount
16. Settle
17. Celebrate
Depending on the transaction there could be a lot more. Pre/Post settlement occupancy, City/BGE performance, Title or easement issues, etc...
Way over-simplified.
This is way over simplified.
Posted by: Dunn | May 12, 2008 1:53 PM
Thanks for the comment, Christian. These How-to posts also run in the print edition on Fridays, which means they have to stay fairly simple. I only get 9-11 inches of space on Fridays. (It's not unusual that the blog posts offer extras, but the essentials must remain the same.)
Posted by: Jamie Smith Hopkins | May 12, 2008 1:59 PM
You mention pre-qualification, but not pre-approval. Sometimes buyers are advised to get pre-approved BEFORE they start shopping, because an offer from a pre-approved buyer is considered more favorably than a matching offer from a pre-qualified buyer. Some first-time buyers may not be aware of the distinction.
Posted by: John Smith | May 12, 2008 3:32 PM
Some realtors seem to have too much time at hand (not surprising at the moment) - you should be glad you didn't get a novel in the "post a comment" ;)
Posted by: Don MacPetrus | May 12, 2008 5:58 PM
If the subprime mortgage mess taught us anything, it's that first time buyers should seek help from a legitimate, non-profit home ownership counselor prior to any of the steps you mention. These counselors help people be realistic and get good mortgages (including subsidized government first-time mortgages) instead of being "up-sold" into bad products by crooks seeking an ignorant sucker.
Posted by: Mark | May 16, 2008 8:44 AM
That's a great suggestion, Mark. Buyers can find HUD-approved housing counseling agencies here: http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?searchLang=SPA&webListAction=search&searchstate=MD
Posted by: Jamie Smith Hopkins | May 16, 2008 8:59 AM