What about financing?
You must be pre-approved with a lender prior to writing an offer, unless you are paying cash for the home. If you are borrowing the money for the home purchase, we will need to provide a pre-approval letter; if you are paying cash, we will need to provide proof of funds. This documentation must accompany any offer we present to a seller.
What are the costs prior to closing?
Earnest Deposit – this can be a little as $500, but is generally 1% of the purchase price. You will present a check at the time you write an offer. It will be deposited and held in escrow by the title company until closing, at which time it will be credited toward your down payment.
Lender Deposit – most lenders will require a deposit of $500 to cover the cost of the appraisal. This will be credited toward your down payment at closing.
Home Inspection / Radon Test – A full home inspection costs between $300 – $400, depending on the company you choose and the size of the home. If you request a radon test in conjunction with the full home inspection, it is an additional $100 – $125. This is paid directly to the inspector at the time of the inspection, which is within one week of acceptance of the contract. This money is not refundable or credited to you at closing.
Decisions to consider before writing a contract:
- What do you want to pay for the home?
We can determine fair market value of the home by preparing a market analysis on your behalf.
With this figure in mind, you can determine what your offer should be.
- What kind of financing do you plan on using, VA, FHA, Conventional?
- How much do you plan to apply to your down payment?
(VA = 0%, FHA = 3.5%, CONV + 5%-20%+)
- Do you want your contract to be contingent on a home inspection? And/or a radon test?
- Do you plan to ask for the seller to provide a one year Home Warranty?
- Do you plan on asking the seller to pay your closing costs?
- How much do you plan to provide for an earnest deposit?
- Determine what day you would like to close on the home.
(This is normally about 45 days from the contract date)
You will want to take time to review the Seller’s Property Disclosure prior to writing a contract.
After the contract is written:
- You will choose the home inspection company and set up the appointment. We have a list of trusted inspectors.
- We will accompany you to the inspection walk through to help you determine if you need to ask for repairs to the home.
- You will contact your insurance agent for homeowners insurance and provide your insurance company information to your lender.
- We will work with you, and the closing company, to determine closing time.
- You must deliver all paper documents that the lender requires, as soon as possible.