Home Buyer's Guide ~ Step by Step Process for Buying Your Next Home

For Home Buyers in North Carolina...a step by step guide to tell you exactly what you will need to do while buying your next home.

1. Start by talking with a lender- you need to get pre-qualified to buy a house.  The lender will be able to tell you what you can afford, how much your monthly payment will be for that amount, and can give you an estimate of what you should expect to pay in closing costs.  This does not mean that you have to work with this lender.  You can shop for a better interest rate later in the buying process.
2. Find a local real estate agent - you will want to find an agent that works and/or lives near the areas that you are interested in buying a house.  Be very honest with your agent by telling them exactly how much you want to spend and exactly what type of house/area that you wish to buy.  Begin an online search and pick a few houses that you want to view and let your agent show you several that they think you will like.  If you tell your agent what you do and do not like about these houses, it makes it easier for them to find houses that you will be interested in buying.
3. Make an offer- once you have viewed several houses and decided that you have found the house that you want to buy, let your agent know you are ready to make an offer.  Your agent should show you the recent sales (past 4-6 months) in the area and you all should discuss what you want to offer for the house.  At this time you should already know how much you want to put down as earnest money (this will be applied to your down payment at closing and is usually around 1%), the type of loan you will be applying for, estimated date to apply for and to receive loan approval, how much of the buyer's closing costs to ask the seller to pay for at closing, the amount to put in the cost of repair contingency, estimated date to complete inspections, and an estimated closing date.  Your agent should be able to guide you through this and should tell you what dates to include in the offer.  Your agent will negotiate the offer with the seller's agent and only after both parties have agreed on, and signed off on, all terms of the offer are you actually under a binding contract.  I realize this sounds complicated...North Carolina will be changing their contract next year to make the buying process easier for both the buyer and the seller.
4. Apply for your loan- once you are officially under contract, you will want to find the lender you want to use and you will want to apply for your loan.  This usually happens within 5 days of being under contract.  If you are getting a loan, your lender will be the one that orders your appraisal.
5. Home Inspection and Negotiating Repairs - Your agent should be able to give you some options when it comes to choosing an inspector.  Most home buyers use the inspector that their real estate agent is comfortable with.  You can attend the inspection if you wish, but you should expect your agent to at least attend the end of the inspection so that the inspector can point out exactly what he reported.  You will receive a report, with pictures, of what the inspector found.  Your agent should advise you on what items you request that the sellers repair.  Most sellers will repair most "necessary repairs" (items that are not performing the function of which they were intended)...cosmetic repairs are not necessary repairs.  If the necessary repairs are greater than the amount that you put in the cost of repair contingency paragraph of the contract, then you have the right to exit the contract even if the sellers agree to repair all of these items.  Your agent will negotiate with the seller's agent until both parties agree on, and sign off on, what the sellers will and will not repair. 
6. Decide what day you want to close - Your agent should be able to give you some options when it comes to picking a closing attorney.  Again, most buyers will let their agent use the attorney that they are confident in.  You should tell your agent exactly what day you wish to close.  Your agent will schedule this with the attorney and will pressure the lender to get the loan package to the attorney on time.  Your attorney will be responsible for doing the title search and for getting all of the legal work ready for the closing.  This is the time you will want to decide if you want to order a survey for your property.
7. Home owner insurance - you want to have insurance on the property so that you are covered from the day you purchase the home.  Your agent has dealt with many insurance agents and can point you to several to choose from.
8. Receive Loan Approval - Remember that date you put in the contract that said what day you would receive loan approval?  Be sure your agent remembers this date also because you need to have received loan approval by this date, asked the sellers for an extension, or you may want to back out of the contract if you do not think you will be approved for the loan.  Whatever you decide, just be sure you do it before this date so that you do not lose your earnest money.
9. Do a walk-thru the day of closing- be sure to take the inspection report to the walk-thru.  You want to make sure that all of the repairs have been completed.  Also make sure that all of the fixtures are still in place, all agreed on appliances are still in the house, and that the house is in the same condition that it was when you went under contract.
10. Attend your closing - be sure to bring either a drivers license or your passport.  The attorney will need to make a copy of your identification before closing.  You should have received a copy of the closing statement a few days before.  This will state the amount of money you need to bring to closing in form of a certified check, made payable to the closing attorney.  The attorney will tell you exactly what you need to do in order to complete the home buying process.  Some sellers will give you the keys at closing and some will want to wait until the attorney has recorded the new deed at the court house.  If you close in the morning, the attorney can usually get everything recorded that early afternoon.  If you close on a Friday afternoon, your deed may not be recorded until Monday and the sellers may hold the keys over the weekend. 

Whew..if you read all of that then you do need the guidance!!!  Feel free to ask me any specific questions that arise during your home buying process.