Don’t worry if you feel overwhelmed by the process, or if your friends seem to know everything about it. If you’ve never gone through the process of actually house hunting and purchasing a home, how would you expect to know how it works? Most TV shows only show the house hunting part but not the actual contract negotiations and what happens after that. When you hire a buyer’s agent, a Realtor(R) who represents only your interests during the process, they should be able to walk you through each upcoming step and the process in general so you’re aware of what’s coming up next and what your obligations are under the contract.
Here’s a general guideline for a home purchase:
1. Get pre-approved with a lender for a mortgage, if you’re going to need one.
2. Go house hunting! This is where you create your list of Wants and Needs, until you find the house you must have!
3. Write a sales contract to purchase that property. The contract will contain all of the details for financing, closing date, home inspection, appraisal, and other contingencies.
4. Once your contract has been accepted by the seller, you’ll have a ratified contract! Now the time clock starts…
5. Lock-in your loan with a lender. Complete any paperwork required.
6. Complete your home inspection, termite inspection, radon test, or any other inspection of the property. If there are repairs you’d like done by the seller, this is when you ask them to either fix a list of items or give you a credit so you can fix them. If you can’t agree to terms, you can either choose to move on or you can void. You can’t void on a termite, but you can void on the home inspection or radon. This is your contract out #1.
7. An appraisal will have been ordered by your lender. We hope the appraisal comes in at least at sales contract price, but if it doesn’t, you’ll have the opportunity to re-negotiate with the seller. If you can’t agree to terms if the appraisal is low (and you must at least TRY), you can void. I haven’t seen many low appraisals lately, but that also depends on how much you’ve offered to buy the property for.
8. If there’s a condo or homeowners association, you’ll have 3 days to review the bylaws from the time you receive them (if may take up to 2 weeks after ratification to receive these). You can void for ANY reason on this. This is out #2.
9. Once all of your contingencies are completed, you’re locked into the contract and will proceed to the specified settlement date.
10. Within a few days or the day of closing, you’ll perform a final walk-through of the property. Presumably the seller has moved out at this point, if the house wasn’t vacant before. This walk-through is to make sure nothing was damaged or removed and you’ll be buying the property in the condition you expected. We’ll also check to make sure all of the appliances are still working.
11. Closing day! Once you’ve signed 1,000 papers from the County and your lender, forked over your check for your down payment and closings costs, you’ll get the keys to the house and you’ll officially be a homeowner!
That’s the basic outline for buying a property in Virginia. Obviously certain transactions will have other steps, for example short sales, foreclosures, new construction, or multiple offer situations. A good agent will prepare you for each one! If you have questions, just ask!