Getting ready to make an offer on a home and wondering what to expect?
This can be a daunting and stressful time, but our realtors and real estate experts have compiled a simple outline to ease your mind and show you what to expect during the offer process in regards to timing and steps.
Here is a general overview of the offer process, step by step...
Step 1 - Talk to a lender about getting a pre-approval or underwritten approval if possible.
Step 2 -Go out and view properties (the fun part!)
Step 3 - Once you locate a property you like, your agent will ask for the disclosures and go through them with you so you know the important items to pay attention to. If you do decide you want to submit an offer you'll then work together to put the actual offer together.
Step 4 - Items needed for the offer:
- Full names that you want on the title.
- Offer price.
- Contingencies? Generally, it's recommended to use no loan or inspection contingency (as sellers provided you with inspections for homes and the HOA covers the main building functions for condos) and we recommend including a short appraisal contingency. In some cases, buyers will waive their appraisal contingency in a competitive offer situation.
- Copy of your pre-approval (from the lender).
- Copy of your proof of funds (needs to show your name and amount in your account, you can cross off your account number and address).
- A personal letter.
Once your offer is submitted this is what you can expect:
- The day after your offer is accepted you will need to wire 3% of the purchase price to the escrow company as your Earnest Money Deposit (EMD). If you have no contingencies or decide to back out for a reason other than your appraisal you could be at risk of losing this. This is uncommon but it's just to ensure you really do like and want the house you put an offer on.
- The lender will order an appraisal right away and you should hear back in eight or nine days what the property appraises at. As long as it appraises the lender will continue processing the loan.
- In the next one to two weeks the lender will be asking you for a lot of additional information (unless you are already underwritten and then this is mostly done). It will be up to you to make sure you get the documents they need quickly so they can continue processing the loan.
- About one week before closing, you will receive an estimated closing statement that tells you the remaining funds you will need to close. Then you'll wire the remainder to the title company and sign the closing documents.
- Two to three days after you sign your documents is when you will close and get your keys!
Best of luck in securing your dream home!