What Can I Expect When Buying a Home?
If you are buying a new home, you can anticipate that the process will generally be the same for most real estate transactions. Knowing the process will help you successfully find the right home, negotiate a fair price, secure financing, request needed repairs, and come to the closing table ready to be a home owner.
So what can you expect when buying a home?
Step 1: Understanding Your Needs/Financial Ability and Finding a Property
The goal is to find a home that matches up with the majority of your basic life requirements, as well as your budget. If you are a first time home buyer, or not sure what you can afford, you may want to advise your financial institution to get a base range for your lending qualifications.
Step 2: Initial Negotiation
Now that you’ve found that perfect slice of real estate, it’s time to make an offer. The offer engages the negotiation phase. Most agents will help you establish the right ‘offer price’ according to real estate market trends. Ultimately, the offer price is always up to you. Along with the initial offer to purchase, you will have the opportunity to request paid closing costs by the seller, the closing time frame, appliances and fixtures, etc.. Once you’ve submitted your offer, the seller has the opportunity to counter offer which may ultimately change the terms of the original offer.
Step 3: Earnest Money & Due Diligence Fees
The Due Diligence (DD) fee essentially buy the purchaser time to investigate the property to determine whether or not that purchaser wants to move forward with the ultimate acquisition of the home. Until the expiration of the DD period, the buyer reserves the right to terminate the contract for any reason or no reason, The DD fee is non refundable in all events, absent a seller breach, and will be credited to the purchase price if the home is ultimately purchased.
The Earnest Money(EM) fee is also credited to the purchase price as well in the event the home is ultimately purchased. If the buyer terminates the contract AFTER the expiration of the DD period, the buyer forfeits the EM deposit.
Because of the structure of our North Carolina contracts, the buyer should complete all matters of investigation and negotiate any repairs or other concessions prior to the expiration of the due diligence period.
Step 4: Appraisal
Your lender will order an appraisal of the home (with a cash purchase, you or your agent can order the appraisal to verify the value of the property).
Step 5: Inspections & Repairs
Once an acceptable appraisal is received, inspections (home inspection / termite inspection ordered 30 days before the closing) will be ordered. (The Inspection process can be completed earlier if all parties are confident the home will appraise at an acceptable amount.) Once the inspectors have provided their reports, you will be able to negotiate necessary repairs with the sellers.
Although the time line referenced herein is a good guide, we would always defer to the opinion of your real estate agent as it relates to timelines, as each situation can present a particular set of circumstances that may require more or less time.
Step 6: Property Survey
After you successfully receive an acceptable appraisal and inspection report, you can order a property survey. The survey can be ordered earlier in the process but it will risk investing money that is unnecessary if the appraisal and inspection reports are not adequate.
Step 7: Hazard Insurance
Different than home owner’s Insurance, hazard insurance gives you peace of mind when it comes to natural disasters, vandalism and theft. This policy is sometimes covered by your lender to provide protection for their investment. Proof of insurance is required to be sent to the closing attorney.
Step 8: Schedule Utilities to be Switched Over/Turned On
As you get closer to the closing date, check with your utilities providers to make sure they service your area and schedule a date to switch your utilities over to the new location. If you are moving to a new area, we have compiled a list of utility service providers by location.
Step 9: Attend Closing
The closing will typically take place at the office of the buyers’ attorney. See seller tab for additional information if seller is unable to attend closing on the scheduled date and time.
Step 10: Payment and Signatures
During the closing, you’ll provide the attorney with certified funds to pay for the closing and sign all of the loan papers and other required documents.
Step 11: Record the New Deed
Once all documents are signed and paperwork is verified, the closing attorney electronically (in most counties) records the deed and deed of trust (if applicable) and disburses funds consistent with the NC Good Funds Settlement Act