First time home buyers: Are you still at the computer, 
doing endless "research" on how to snag the $8000 TAX CREDIT for buying a house this year?
Does the November 30th deadline seem like a million years away as you think about fireworks (not turkey leftovers)?
First time home buyers: Get your butts in gear. NOW.
This is the wrong time to claim you only get motivated when a deadline looms.
This is the wrong time to tell everyone you are a "last minute kinda person" who pulls an all nighter when you have a term paper, and shops for Christmas presents on December 24th.
Here's why: Buying a house takes longer than you think. There are 8000 reasons you DO NOT want to miss this deadline.
Let's back things up. Do you think OTHER first time home buyers might wait until the last minute? Lenders could very likely experience an overwhelming amount of applications this fall.
With applications already taking 45 days, it could easily take 60 days to close your loan. Or more. Lenders are already ridicuously understaffed.
This means you will need to be in contract no later than the end of September.
If you have not already done so, you will need to accomplish this during the months of July, August and September:
- Find a Mortgage person
- Find a Real Estate Agent
- Find a House
- Make an Offer, negotiate terms. Find another house if first offer is rejected. Get new offer accepted.
- Get financing completed and loan closed.
Some likely time lines and what to expect:
1. Apply for a mortgage. Provide the required documents and ask for a pre-approval. This will uncover any glitches standing in the way of your approval. This will make certain you have the right amount of funds in your account, or lined up as a gift. This will let you know your price range before you begin shopping for a house. This will let the Realtor know you have done your homework and are serious. ESTIMATED TIME REQUIRED: 1-2 weeks
2. Figure out where you want to live and find a Realtor. Look for a Realtor that knows the neighborhood where you would like to buy. Communicate openly and be on the same page if you are buying with another person. ESTIMATED TIME REQUIRED: 2-3 weeks
3. Shop for a house with your Realtor. ESTIMATED TIME LINE: 3-4 weeks.
4. Make an offer, negotiate terms, get in contract. Ask your Realtor about timing before making an offer on a short sale or a lender owned property. ESTIMATED TIME LINE: 1-2 weeks or more...depending on how many offers it will take to get a house. Market could become highly competitive as the deadline looms.
5. Secure financing with lender, and close the loan. Inspections and appraisal will occur during the time as well. ESTIMATED TIME LINE: 6 weeks to 8 weeks
Worst case estimated time line: 19 weeks.
Weeks until November 30th? 22 weeks, beginning next week.
Can you do this in less time? Yes you can.
Just like when you gave your Mom that lame ceramic unicorn for Christmas (purchased in a panic on Christmas Eve, thrown in an obviously used gift bag, then sneakily placed under the Christmas tree minutes before gift opening).
Written by Janet Guilbault, Mortgage Banker/Broker Based Out of the San Francisco Bay Area
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