In the current housing market, a home buyer may need to decide on a property quickly. It’s helpful to be prepared in advance by understanding the general steps involved in the home buying process and what is included in the purchase agreement.
Home buying process
First, the potential home buyer needs to determine how much they can spend on a home, which includes a down payment, the mortgage payment, property taxes and insurance. It may also be helpful to meet with a financial institution for a mortgage pre-approval, so the buyer knows how much they can borrow.
Once the buyer finds a home they would like to purchase, they can make an offer. If the offer is accepted, it’s a good idea to have a home inspection. Then, the lender can order an appraisal to ensure the property is worth the negotiated price and a title search to confirm there are no liens on the property.
At the closing, the seller and buyer will sign the purchase agreement and the buyer will receive the keys to their new home.
Purchase agreement
The purchase agreement outlines the terms and conditions of the sale. It should include the property information, the purchase price, details of the buyer’s financing such as the mortgage type, the loan amount and interest rate, as well as any contingencies.
It should also include the closing date, whether any taxes or fees will be prorated at the closing, and the seller should provide a disclosure of any known defects with the property.