Talk to a Lender or Lenders About Get Preapproved for a Loan
This is the most important first step towards buying a home. Some prospective buyers feel like this step can be skipped until they find a home they’re interested in buying. That’s working backwards though. You need to get comfortable with the money side of the transaction and find out how much money banks are willing to lend you. It doesn’t make sense to start looking at 200k homes and fall in love only to find out you can’t borrow more than 150k or that you aren’t comfortable with the payments. Getting pre-approved for a mortgage by a local lender is easy to do and should only take a couple of hours of your time. Keep in mind that lender’s criteria have become much more stringent over the past couple of years. Besides, you’re going to need it to write an offer when we find the right home anyways. Most sellers won’t even consider an offer unless it’s accompanied with a pre-approval letter.
Start House Hunting
There are many ways to find the right home. Most people start their search online, looking through listings in the MLS. The home search on this site will show you everything available via the Cleveland MLS. Some people like to identify an idea area first, and then look for the right home in that neighborhood. You can explore Cleveland neighborhoods here too. You should put together a “needs” list and a “wants” list. Sometimes your lists will change once you starting taking a look at homes in person. You may need to decide what’s more important, a large house with plenty of bedrooms or a smaller house in a great school district. Only you can decide what can and cannot live without.
Make an Offer
Once we find the right home that meets all of your needs in the right neighborhood, we’ll write up an offer to purchase that home. We’ll do some research to determine what we feel fair market value for the home is and come up with a negotiating strategy based upon that information. Everyone likes to negotiate differently. If a home is price at or below market value and is a new listing, we may have a lot of competition. In this case we may want to get aggressive with the offer. If a home has been on the market for a long time and is vacant, there may be more room for negotiation. There really isn’t a cookie cutter approach. There are many factors that can influence the seller’s response to an offer. Sometimes the terms (ie closing date, inspections, earnest money, appliances, home warranties etc.) are just as important as the price. The Seller can accept, reject, or counter the offer, and you can do the same to the Seller’s response. We can go back and forth several times until acceptable terms are met by all parties. If everyone agrees, the appropriate changes are made to the contract and both you and the seller sign off. If terms can’t be agreed upon, we go back out and find you another house.
Getting a professional home inspection is crucial to the Cleveland home buying process. We can only look at so much during our visits to a property. A home inspector will go through all of the major components of a house and determine their condition. This includes the mechanical systems, utilities, plumbing, electric, foundation, and the general overall condition of the home. We’re really looking for safety, structural, and health issues. Inspections are typically done within a week of the accepted offer. Around here, radon inspections are also common and will cost extra. If you have specific concerns, a specialist may be required. For example, if the home inspector sees issues with the foundation, he may recommend that a structural engineer take a look. A typical home inspection usually takes 2-3 hours and can cost anywhere from $300 to $400 depending the size and age of the house. A radon test usually runs around $150. No house is perfect, and I can promise the inspector will find things wrong with the house, even in new construction.
After the inspections are complete, we have 3 days to give the seller our response. We have 3 options to go back to the sellers with after the inspections. You can either
- sign off on the inspections if you’re comfortable with everything,
- ask for the seller to make specific repairs by licensed contractors if needed, or
- back out of the deal if something major is discovered that the seller did no disclose
This can potentially turn into a second round of negotiations for the home. The Seller considers your repair request, and can accept, reject, or counter it. If the Seller’s response is acceptable, then you stay in the transaction and move forward to closing. If the Seller’s response is unacceptable, then we take your earnest money (in nearly all cases) and start again with finding a home.
Final Loan Approval
Once we’re through the inspections, we typically have a few weeks were all of the loose ends are tied up involving your loan. The loan goes through final underwriting, the appraisal is reviewed, and the final loan documents are prepared and sent to the title/escrow company for closing. If any repairs were negotiated, this is when the seller will have those issues addressed.
Walk-through and Signing
A couple of days before the scheduled closing, we’ll go back over to the house and do a final walk through. We just want to make sure the house is still in the same condition as when we made the offer. The seller will provide us with any invoices from repairs that were made, but we can also look at them ourselves if at all possible. You’ll then set up a time with the escrow agent, usually the title company to sign closing documents. This is also when you’ll need a cashier’s check to cover your down payment and closing costs.
Usually the day after signing is when it becomes official! The mortgage and deed will get filed with the county recorder and the money will be disbursed. If the agreed upon possession date is at title transfer, you’ll be able to get the keys and start moving. Then the real fun begins!