Timeline for Buyers
Information on what to expect during the buying process
Timeline for Buyers Get Approved
If you are thinking about purchasing a home, the first step is to apply for a loan with your bank or a lender.
Your REALTOR will be happy to provide a list of lenders for your convenience. The lender will be looking at your credit score, work history, income, the amount of debt you have compared to your income, etc. When you are approved for a loan, they will be able to help you come up with a price range that will be comfortable for you. Now that you're approved, it's time to start looking for your dream home!
You've found the perfect home.. now what??
You and your Realtor will write an offer and will submit the offer to the listing agent on your behalf. When the terms of the contract have been agreed upon and both buyers and sellers have signed the contract, you are now considered "under contract". At this time, your REALTOR will collect your earnest money, as per contract or have you deliver it directly to the title company.
The first steps are to knock out those contingencies. Two standard contingencies are Home Inspection and securing your Home Owner's Insurance. You will have a specified number of business days to get these taken care of, per the contract. So, time is of the essence! Your REALTOR will help you stay on track.
Inspection is paid for at time of service. After your home inspection has been completed, the inspector will send you a detailed report of the condition of the property. This is an opportunity to re-open negotiations. You have some options:
Negotiate price, based upon needed repairs
Ask seller to make needed repairs
Accept the home in as-is condition
When the initial contingencies to the contract have been satisfied, you will let your lender know that you are good with proceeding with the purchase. At that time, the lender will order the appraisal.
Appraisal is paid for before the lender will order it. It usually takes a few days from the time the lender orders the appraisal and the time the lender receives the appraisal report. (On VA loans, appraiser has 10 business days to complete and submit.) If all is good, we keep moving.
Your file will go to the underwriter. This is where they will look over all the financial documents/verifications you have submitted to the lender. They will also look over the appraisal. This process can take a couple of weeks. It should be quiet during this time. Quiet is good!
CLEAR TO CLOSE- When you hear those magic words it means the underwriter has cleared
8. Your file will go to the underwriter. This is where they will look over all the financial
documents/verifications you have submitted to the lender. They will also look over the
appraisal. This process can take a couple of weeks. It should be quiet during this time.
Quiet is good!
9. CLEAR TO CLOSE- When you hear those magic words it means the underwriter has cleared
your file and we can proceed to closing.
10. You will have an opportunity just before closing to do a final walk through of the property.
This will be your opportunity to verify any/all repairs have been made and property is in
acceptable condition before you close.
11. Closing! Woo Hoo, you made it!! Your Realtor will attend closing with you and you will sign
all docs that will make you a home owner!
How Long Does It Take?
Your loan type directly effects your time from offer to close. Below are the standard loan types and the
time it usually takes to close.
FHA: There are several different types of FHA loans, but all usually take 4-6 weeks, from contract to
CONVENTIONAL: Conventional is the quickest! You are usually looking at a timeframe of approx. 4
weeks, from contract to close.
VA: A VA loan usually takes 5-6 weeks, from contract to close.
USDA: This file usually takes between 4-6 weeks for initial approval and may require additional approval time from the Department of Rural Development. Underwriting
Buyer Out of Pocket Expenses
When purchasing a home, there are several expenses a buyer will incur as a part of the home buying process.
Outlined below are the typical items that buyers pay and when you can expect to have to pay for them. This list is meant to be used as a guide and not all-inclusive of every possible charge a buyer may pay.
· Deposit: Deposit is an amount that is included as a part of a buyer's initial offer to show good faith that he/she does intend to purchase a property. This amount is can be negotiated. It is customary for buyers to deposit at least $500 in earnest money and is collected from the buyer as per the contract (typically, either at the time the offer is written or within 48 hours of the offer acceptance.) The earnest money is deposited and held as a part of the contract. At the time of closing, the earnest money will be applied towards the buyer's closing costs/down payment. If the sale does not close, for any reason, Louisiana Law states that the earnest money cannot be released to either party without an agreement between both parties to whom it will be released. In the unlikely event there would be a deposit dispute, Louisiana Law also mandates the Broker holding the deposit follow a strict set of guidelines on how to handle this type of situation.
· Home Inspection: Home inspections are not required. However, if you elect to have the home inspected by a professional home inspector, the cost of the inspection is the buyer's responsibility. Home inspections are the very first step after an accepted offer and must be paid for at time of service. This fee is non-refundable. The inspection cost varies between inspectors and house size. Typically, $300+.
· Appraisal: An appraisal is required whenever a buyer finances a house purchase. Your lender will typically require that the appraisal is paid for before they order it. Your Realtor will get with your lender as soon as the contract is accepted to ensure they have your appraisal payment to avoid delays. Appraisal fees are also non-refundable and typically cost $400-600.
· Down Payment: The type of loan you decide upon will determine whether you will have a down payment and how much is needed.
· Funds Needed To Close: Most title companies will require funds needed to close to be in the form of certified funds or to be wired.
· Closing Costs/Prepaid Items: These are the remaining costs incurred by the buyer to secure a loan and close on a property. These funds are also due at closing and must be in the form of Certified funds. Typical costs range between 2-6% of the sales price. (It may be negotiated in your contract for the seller to pay some or all on your behalf.)