Whether this is your first purchase or you are an experienced buyer, this decision must be made carefully
Norris & Company Realty, LLC. have prepared This Guide to help you step by step!
MORTGAGE APPLICATION: For mortgage referrals, ask your Realtor® Norris & Company Realty, LLC for the preferred lender list if you have not already chosen a lender. The application must be completed within the contract guidelines, if not done already. The loan process can sometimes be a nuisance, but please understand that detailed documentation is required by the lender. Most loans are approved with “conditions” and these generally have to be cleared prior to closing. If you are ask to supply documentation for your loan, please make sure to do this in a timely manner. It is important to the process.
BUILD YOUR LOAN FILE.A Loan file contains all your important financial documents. You will need it to secure financing for your property. The typical loan file should contain:
- Financial statements
- Bank accounts
- Credit cards
- Auto loans
- Recent pay stubs
- Tax returns for two years
- Copies of leases for investment properties
- 401K statements, life insurance, stocks, bonds, and mutual account information.
- Check Your Credit Rating.
Your credit score will have a huge impact on what type of property you can buy, and at what price. It is first recommended to check your credit rating with an experienced lending institution so that we can determine what you can afford. The lender will research your credit ratings from the three credit reporting agencies Equifax, Experian and Trans Union. We will be happy to recommend experienced, knowledgeable lenders in the residential, construction, and commercial and investment real estate fields. Be Careful with Your Finances. Now is not a good time to make sudden career changes or large purchases. You want to approach your property purchase from a position of financial stability.
PRE‐APPROVAL: A lender has reviewed your credit, verifications and all other required documentation and approves your loan prior to finding the property to purchase. Lender approval of the appraisal would follow after a contract is signed to purchase a property. lender up‐front for this expense.
HOW TO HOLD TITLE. You may wish to consult an attorney or tax advisor on the best way to hold title. Different methods of holding title have different legal, estate and tax implications, especially when selling or upon death of the title holder.
SOME IMPORTANT TIPS TO KEEP IN MIND TO STREAMLINE THE PROCESS:
Keep written records of everything. For the sake of clarity, it will be extremely useful to transcribe all verbal agreements including counter-offers and addendums and to convert them into written agreements to be signed by both parties. We will assist you in drafting all the paperwork for your purchase and make sure that you have copies of everything.
Stick to the schedule. Now that you have chosen your offer, you and the seller will be given a timeline to mark every stage in the process of closing the real estate contract. Meeting the requirements on time ensures a smoother flow of negotiations so that each party involved is not in breach of their agreements. During the process we will keep you constantly updated, so you will always be prepared for the next step.
The Closing Agent. Either a title company or an attorney will be selected as a closing agent. The closing agent will hold the deposit in escrow and will research the complete recorded history of the property to ensure that the title is free and clear of encumbrances by the date of closing and that all new encumbrances are properly added to the title. Some properties are subject to restrictions which limit various activities such as building or parking restrictions. There may be recorded easements and encroachments, which limit the rights to use your property.
LOAN COMMITMENT: This is the lender’s commitment to provide a mortgage to purchase a property. You must receive this loan commitment from the lender within the time period noted on the contract. If your lender isn’t able to do this within the agreed upon time in the contract, please notify your Transaction Coordinator or Realtor® immediately. Norris & Company Realty, LLC
Inspections. Once your offer is accepted by the seller, you will need to have a licensed property inspector inspect the property within the timeframe that was agreed upon in the effective contract to purchase. You may elect to have different inspectors inspect the property, if you wish to obtain professional opinions from inspectors who specialize in a specific area (eg. roof, HVAC, structure). If you are purchasing a commercial property, then you will need to have an environmental audit done on the site for the lending institution. We can recommend several different inspectors. Transaction Coordinator for a list. Once you have selected an inspector, please notify your Transaction Coordinator of the time and date of the inspection to coordinate access. If you’d like us to schedule the inspection please let us know. We’d be happy to handle this for you. Please have the name and phone number of the inspector available when you call. Once the inspection is completed, your Realtor® will review the report with you, discuss your concerns and compile a list of any repairs, which you will need to sign. You will be notified of the seller’s response regarding repairs.
Depending on the outcome of these inspections, one of two things may happen:
- Either each milestone is successfully closed and the contingencies will be removed, bringing you one step closer to the close, or
- The buyer, after reviewing the property and the papers, requests a renegotiation of the terms of contract (usually the price).
Appraisal and Lending. It is imperative that you keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application and fund your loan. If the agreement is conditional upon financing, then the property will be appraised by a licensed appraiser to determine the value for the lending institution, via a third party. This is done so that the lending institution can confirm their investment in your property is accurate. Appraisers are specialists in determining the value of properties, based on a combination of square footage measurements, building costs, recent sales of comparable properties, operating income, etc. When you are within two weeks of closing, double check with your lender to be sure the loan will go through smoothly and on time.
CONDO DOCUMENTS, APPLICATION & APPROVAL: Condo documents will be provided by the listing agent for your review if you haven’t already received them. A condo application may be required to purchase in certain communities. If this is required, your Transaction Coordinator will obtain this for you. It is important that you submit the application and any required fee to the appropriate association or management company as soon as possible. An interview may be required. If an application and/or interview are required, these items must be completed prior to closing. Time must also be allowed for the approval to be sent to the title company for closing.
Property Insurance. If you are obtaining a loan, you will be required by your lender to purchase a certain amount of insurance on the property. The value will depend on the lending institution and the purchase price of the property. You may be able to save hundreds of dollars a year on home owners insurance by shopping around for insurance. You can also save money with these tips.
Consider a higher deductible. Increasing your deductible by just a few hundred dollars can make a big difference in your premium.
Ask your insurance agent about discounts. You may be able get a lower premium if your home has safety features such as dead-bolt locks, smoke detectors, an alarm system, storm shutters or fire-retardant roofing materials. Persons over 55 years of age or long-term customers may also be offered discounts.
Insure your house NOT the land under it. After a disaster, the land is still there. If you do not subtract the value of the land when deciding how much homeowner’s insurance to buy, you will pay more than you should. If you need a recommendation to an insurance agency, please contact your Transaction Coordinator or Realtor®. Norris & Company Realty, LLC
SURVEY will be scheduled by the title company Approximately 2‐3 weeks prior to closing, If you have a preferred company, please notify your Transaction Coordinator. A survey will be ordered for you to insure completion in time for closing.
FINAL WALK-THROUGH INSPECTION.
More of a formality than anything else, the final inspection takes place a day before, or the day of the closing. You will visit the property to verify that all is in working order, everything is the same as when you last viewed the property, and to check any repairs that may have been made per the inspection report also that there are no extra items left behind, and that everything included in your purchase is still at the property. Your Transaction Coordinator or Realtor® will contact you to schedule this. If you will not be here for closing, you can have a friend or relative complete the walk through for you. Norris & Company Realty, LLC
HOME SERVICES AND UTILITIES.
We will provide a list of useful numbers for the activation of home services and utilities for after the closing occurs. Arrange UTILITIES connections to start the day of closing.
Norris & Company Realty, LLC. We are ready to assist you should an unforeseen glitch pop up, even at this last stage. Something at the property breaks down, or some other minor detail – no need to worry. We have encountered these problems before so we know how to handle them efficiently and in a stress-free manor.
All Items May Not Apply to your Home Purchase
CLOSING: All parties whose names appear on the contract must attend the closing unless prior arrangements were made for a mail away or approved Power of Attorney. If this is to be a primary residence, the spouse also needs to sign the mortgage, even if their name does not appear on the contract. All parties need to bring driver’s license or passport for identification.The closing agent will furnish all parties involved with a settlement statement, which summarizes and details the financial transactions enacted in the process. You and the seller(s) will sign this statement, as well as the closing agent, certifying its accuracy. If you are obtaining financing, you will have to sign all pertinent documentation required by the lending institution. If you are unable to attend the scheduled closing, arrangements can be made depending on the circumstances and the notice that we receive. If you are bringing funds to the transaction, you can elect to either have the funds wired electronically into the closing agent’s escrow account, or bring a certified bank check to the closing in the amount specified on the settlement statement. The seller should arrange to have all property keys and any other important information for you at the closing so that you may receive these items at this time
CLOSING FUNDS: Your Transaction Coordinator and Realtor® will review the HUD‐1 Settlement Statement prior to closing. You will be notified of the amount you’ll need to bring to closing. The funds will need to be wired to the title company’s escrow account. If you’d like to wire your funds, please contact your Transaction Coordinator and wiring instructions will be requested. If you have just sold a home, you may also be required to bring a copy of your closing statement from that transaction for your lender.
CONGRATULATIONS! Closing has taken place.
The home is now yours. Please note that if the sign and lock box haven’t already been removed they should be within one week If not, please contact your Your Transaction Coordinator and Realtors® Norris & Company Realty, LLC