If you’re following along and putting a plan into action, by now you have been pre-approved for a loan, selected a Buyer’s Agent, looked at and selected a Property, made an offer and are negotiating for your new home!
The process of negotiating for a home is one of give and take. Your Buyer’s Agent should be able to explain negotiating norms in the areas in which you are interested. For example, in our North Hills communities, Sellers price their homes more tightly and they generally sell in the range of 98% of list price. If you bring an offer at 90% of list price, you may not even get a response. In Sewickley, there is often a bit more flexibility of price. Keep in mind, however, that price isn’t the only concern. Closing date is important – if you cant get the date you want, you may need to pay for temporary housing and storage of your things. Inclusions are important – if a Seller starts removing things from the home, they are things you may need to spend money to replace and this may affect what you are willing to pay for the home. You must keep all of the pieces to the puzzle in mind as you try to negotiate to a final Agreement to purchase the home.
Once you and the seller reach a deal, both parties sign the Agreement and you are officially “under agreement.” At this point, the contract takes over and specifies exactly what you must do next. Your Buyer’s Agent should lay all of this out for you in easy-to-use timelines. This is absolutely critical – if you miss deadlines, you could lose the deposit money you put down in some scenarios. Review all deadlines and expectations with your agent and mark your calendar.
You generally have 1-2 weeks to apply for a mortgage. Do not delay. You must get all of your paperwork to the lender within the time frame. The lending process is quite complex these days – there will be a lot of detailed information requested – this will take you time to compile. Get started right away! Once you get all of the papers to the lender, your part in the mortgage process is basically complete. The lender may ask for a few more things, but the lender takes over all of the details, including ordering the appraisal to make sure that the home is worth what you have offered to pay (if it “fails” to appraise, depending on how much you are borrowing, you may not be able to get your financing and may, therefore, be unable to buy the home). The lender will also refer the loan to a settlement company.
At the exact same time that you are applying for your mortgage, you will also be inspecting your new home (yes, it will be very busy for a few weeks). More on inspections next week…