Buyer's Guide Per State

With these home-buying guides, you’ll learn about the different phases for inspections, mortgage approval, closing the deals, and more.

Where are you located?

Arizona

  • While it has some features that are similar to other states, Arizona has its own unique process for buying a home with a mortgage loan. Like many other states, Arizona requires an escrow agent, closing agent, or  title-company representative to complete the transaction.
  • In Arizona, a buyer’s funds and the purchase contract will be held by a neutral party. Once an escrow agent verifies that the seller and buyer have completed their roles, the new title is prepared.
  • When the new title is ready, the escrow company will release the funds and the listing agent will give the house keys to the new owner.
  • Certain environmental requirements are needed in Arizona, including termite inspections.

The Step-By-Step Process For Buying A Home In Arizona

Phase 1: House Disclosures and Inspections

Once a buyer is in contract, there are certain tasks that need to be completed. These can often be done at the same time as Phase 2.

  1. First, an offer will be accepted by the current owner. With a contract signed, the escrow process will start.
  2. Earnest money, which is a deposit, will be placed with either the seller’s real estate broker, an escrow agent, or an attorney. This money will never go directly to the seller. In many cases, an escrow company is simply a separate division of the title company.
  3. When the deposit has been made, the buyer will review and sign any disclosures, which are usually completed as an addendum to the purchase contract. Depending on the property itself, the disclosure can include previous remodeling or repairs, possible hazards, or flaws in the home. A property disclosure statement will usually be provided by the seller, and this will come to the buyer with the contract or during the inspections.
  4. The buyer can also choose to perform inspections on the property, which is usually agreed upon as part of the contract. It’s important to note at this point that all issues regarding inspections and negotiations must be completed in writing to ensure proper documentation and accuracy. The inspection period in Arizona is laid out in the contract, and will include a predetermined number of days for the buyer to perform any inspections they wish. In Arizona, this step will include a basic inspection by a contractor as well as a termite inspection, but this will vary depending on the property itself.
  5. Depending on how the inspections go, the buyer at this point has the option to completely walk away from the deal or accept the conditions of the purchase. They could, however, request the seller make repairs before the sale, or they could ask for credits. They could also request a reduction in the sale price because of documented flaws. At this point, the sellers will have around five days to respond. (The time period will vary and will be defined in the contract.) They can either agree to all of the buyer’s requests or offer a negotiated solution. If the seller desires, they could also reject the requests of the buyer and refuse to meet their demands. Once the response is made, the buyer can continue with negotiations or accept the seller’s position. They also have the option to end the purchase and move on. Once again, the potential buyer will have a certain amount of days to respond, but the most common timeframe is around five days. If the buyer refuses the seller’s position within the timeframe, they can end the transaction and recover the money that they placed in escrow.

Phase 2: Getting A Mortgage In Arizona

You can wait on this step until all the inspections and negotiations have been completed, but it is possible to start the mortgage process immediately once the initial contract has been made. The mortgage process can often be the most complex and frustrating, leading to a lot of stress for some people. However, if you start early and prepare the right documents, the mortgage process in Arizona can be quite simple.

  1. First, the buyer will submit a loan application to a lender. This can be done either directly or through a mortgage broker. (Before this occurs, it’s likely the buyer has gone through pre-qualification and pre-approval steps, which are usually completed before house shopping.)
  2. Next, the lender will send a document called the “Good Faith Estimate” to the buyer. Also called a GFE, this document outlines the likely closing costs, which will probably differ slightly from the final costs.
  3. After the GFE, the purchaser will need to send certain financial disclosures to their lending agent. This will vary depending on the specific loan and the situation, but some of the most typical documents include:
     – Bank statements from several previous months. Should include each bank account that the borrower owns.
     – Information regarding current debts. This can include current lines of credit, loans, and other financial obligations. If renting, it should also include rent payments.
     – Tax returns for up to two years. This will be submitted through an authorization using specific IRS forms. (Generally Form 4506-T.)
     – For each borrower’s employers, recent pay stubs and contact information will need to be provided. The amount of pay stubs will depend on the type of loan.
     – Any other information that relates to the borrower’s financial situation. For example, this can include marriage licenses, divorce settlements, child support, liens, bankruptcies, and court judgements. Essentially, anything that impacts the money you have needs to be included in the step.
     – Information explaining credit inquiries.
    – Verification of any large deposits that are not considered regular income, such as gifts. A large gift can be similar to a personal loan, as far as lenders are concerned. Therefore, you will likely need to provide a gift letter, which outlines the nature of the large deposit. The letter needs to include a lot of information, including a statement that the money is a gift and not a loan. The lender can also request itemized deposit slips depending on the amount. Requirements for this step can vary based on the situation, especially the size of the loan compared to the size of the borrower’s income. When seeking a loan, ask your lender if this is required so you can prepare the documents.
    – Finally, the lender may request repeat information to verify some of the documents that we outlined above. Life can be unpredictable, so lenders may ask for more than one copy or verification source in regards to the same information. For example, your lender may need duplicates of pay stubs, rent receipts, or bank statements. If there is any significant change in these documents, the lender may need to reassess your financial eligibility for the loan.
  4. Once all the right information has been collected and verified, the lender will make a decision. If approved, you will receive a loan commission letter, which states their willingness to fund the mortgage. There may, however, be some conditions. These conditions usually include an appraisal, which allows the lender to verify the value of the property you are buying. It can also include, depending on the situation, a check into any material change in your finances or changes to the property.
  5. Within a certain number of days, the loan contingency will need to be removed by the buyer. This will need to be done within a certain timeframe before the closing date, which is often called the “loan contingency date.” By this time, the buyer must either get a commitment from the lender or tell the seller that they are unable to secure the loan.
  6. When ready, an appraisal will be ordered by the lender or mortgage broker. In Arizona, this is done through a directory of appraisers. The lender or broker cannot choose a specific appraiser, but they can reject an appraiser or request a different person; just not a specific person. If this appraisal is lower than the purchase price, a lender can decline the loan unless a change is made. Contracts usually have an appraisal contingency that allows for cancellation at this point without a penalty.
  7. Typically, the lender will request a title commitment to the the title company. When this request is received, the title company will examine the title for quality, as well as information regarding the property survey. (If there is no survey, one will need to be performed.) If all goes well, the company will create a title commitment that certifies the title is clear of issues and is ready for sale. If needed, title insurance can be arranged at this step.
  8. The new owner of the property will now need to purchase homeowner’s insurance. This step may be skipped if the property already has insurance, which may be the case if there is a homeowner’s association, for example. Proof of sufficient insurance will need to be provided to the lender.
  9. There may also be a requirement for hazard insurance for some houses in Arizona. This will financially protect the home from fire or storms. In certain areas of Arizona, flood insurance may be required.

The total mortgage process, even when handled by a high-quality mortgage agent, can be long and meticulous. In some cases, it can even seem arbitrary, focusing on details that, to the buyer, seem insignificant. However, this is a critical part of the buying process, so you should prepare these documents as soon as possible. At the very least, you should determine how you get these documents. If possible, avoid any changes to employment or your credit score until your mortgage transaction is complete; any changes can create problems for the loan process. Avoid switching employers, even if you can secure a higher income. If possible, delay the change until your entire mortgage-loan process is complete. You should also not lease or finance a car while going through the loan process, and don’t open new lines or credit, as a change in your credit profile could cause the entire process to start from the beginning.

Phase 3: Closing the Arizona Purchase

Compared to the previous phases, the closing process is usually fast and simple. While it can take a week, it could be completed in a couple of days. Because Arizona does not require an attorney review, the transaction rarely requires all parties to sit at the same table at the same time.

Arizona is an escrow state, which means the following steps need to be completed:

  1. The mortgage lender will send the final documents to the escrow agent and a closing date is scheduled.
  2. At the office of either the escrow agent, closing agent, or title company, the closing will begin. In most cases, the seller will sign their documents before the buyer.
  3. The buyer then signs all of their documents, including loan documents.
  4. The buyer will pay the remaining funds for the down payment and closing costs to the escrow agent, closing agent, or title company. (To speed the process, this step can actually be done days in advance.)
  5. The deed will then be recorded with the appropriate city or county.
  6. The buyer gets the keys to the house and officially take possession of their Arizona property!

Remember, this is a general-information guide and should not be taken as legal advice. Laws are subject to change, so always speak with a qualified real estate professional before making any decisions.

California

  • California is an escrow state and has a process that is similar to other states that have requirements for the use of escrow agents.
  • In California, the borrower’s funds and purchase contract are held by a neutral party. They are released when an escrow agent verifies that everyone has performed their role properly.
  • When you are buying a home in California, the escrow company then notifies the selling agent when the title is recorded so the agent can give the keys to the buyer.

The Step-By-Step Process For Buying A Home In California

Phase 1: House Disclosures and Inspections

Once a buyer is in contract for buying a house in California, these are the steps that need to be completed for disclosures and inspections. In many cases, they can be completed at the same time as the steps in Phase 2.

  1. First, an offer will be accepted by the seller, which will begin the transaction process, including the escrow process.
  2. An earnest money deposit is placed with the seller’s real estate broker, an escrow company, or an attorney. When buying a home in California, the money is never given directly to the seller.
  3. The buyer will then have the chance to review and sign off on any disclosures as needed. These disclosures will change depending on the property, but they often include flaws with the home, previous repairs, and possible hazards to the environment that may need to be addressed in the future. In many cases, a complete disclosure package is given to the buyer from the seller. This package will include known defects that are disclosed before the offer is accepted. A seller sometimes see this as beneficial, as buyers may include these facts into the contract price.
  4. The buyer will now choose to perform inspections if they desire. This is usually agreed upon in the contract. The inspections must be completed by a certain day, which is called the “inspection contingency date.” The type of inspection will depend on the home, the contract, and the buyer, but they often include a pest inspection, roof and chimney inspection, a sewer inspection, and a general inspection conducted by a professional contractor.
  5. The buyer will then assess the results of the inspections and could request repair work, credits, or a reduction in the sale price if flaws are discovered. When the buyer makes a request, sellers can agree to the buyer’s request, offer a compromised solution, or decline the request entirely. The buyer can then continue negotiations as needed or choose to end the contract at this point if they wish.
  6. Eventually, the buyer will need to remove the inspection contingency by agreeing to an inspection response, which is signed by both sides. This should finalize any issues related to inspections and disclosures.
San Francisco, CA landscape
Buying a home in California is easy when you follow the right steps.

Phase 2: The Mortgage

Many people borrow money to purchase a home, and this process can seem stressful and complicated. However, it is actually a straightforward process, and when you are properly prepared, it will be smooth and simple. In most cases, the steps in Phase 2 can be completed at the same time as Phase 1, so feel free to begin once you are in contract with a seller.

  1. The first step in this phase is for the buyer to submit a loan application. This will be done either directly or through a mortgage broker.
  2. Within three business days, the lender will send the buyer a GFE, which stands for “Good Faith Estimate.” This is an explanation of the expected closing costs, but this number will likely deviate slightly from the final numbers.
  3. The lender will then request that the borrower send a wide variety of financial information. This information will vary depending on the type of loan, the borrower, and the lender, but you can generally expect to need a few specific documents, including:
    – Bank statements from several months in the past. This should include all accounts that are owned by the borrower.
    – Several months’ worth of information regarding your debt load, including current loans, credit lines, and other financial liabilities. This can also include rent checks if you are currently renting a home.
    – Up to two years’ worth of tax returns. This will be released to the lender using an authorization form through the IRS.
    – Recent pay stubs and information from the borrower’s employer. This should include all employers, including full and part time work, as well as seasonal employment.
    – Any information that impacts your financial wellbeing. This can include, but is certainly not limited to, marriage licenses, divorce settlements, child support, bankruptcies, liens, and judgements. Basically, if it affects you personal finances, it needs to be documented for the lender.
    – Borrowers will need to explain any past credit inquiries, which impact credit scores and increase risk to lenders.
    – Verification and information on any significant deposits in the borrower’s bank accounts. A large gift can look like a personal loan, so you will need to have a gift letter from the donor. This gift letter should include a lot of information, including verification that the funds are in fact a gift and not a loan. Borrowers may also need itemized deposit slips. The specific amount that requires a deposit slip or gift letter will vary depending on the size of the gift compared to the borrower’s income.
    – Finally, the borrower will need to supply repeated and updated information for many of the above documents. Remember that as far as a lender is concerned, anything can happen between pre-approval and the payment of the loan. Even during the escrow process, many things can change. For this reason, they may ask that borrowers bring multiple information sources for the same information, such as income. Be sure to bring as much as possible so you speed the documentation and approval process. If there are any changes, you will need to provide this information as well.
  4. Once all the right documentation has been provided, the lender will make a decision. Assuming it’s an approval, they will issue a commitment letter, which simply states their willingness to fund your loan once certain conditions are met. These conditions can include appraisals, which ensures the lender that their loan is supported by a quality investment. It may also include any material changes that may have been requested by the lender.
  5. Any financing or loan contingencies will now be removed. This will be done by the buyer before the loan contingency date, which is noted in the contract for buying the home in California. The buyer may also ask for an extension to this date if they have yet to receive the loan commitment letter from the lender. The seller then has a set amount of time to respond, and they can choose to not give the extension if they wish.
  6. At this point, an appraisal will be requested by the lender or mortgage broker. This will be done through a directory of appraisers, and while choosing a specific appraiser is not possible, agents and brokers can request a different appraiser. If the appraisal comes in lower than expected, the lender can decline approval unless a change is made to increase the value of the property. California generally has an appraisal contingency date; before this day, any issues regarding the appraisal must be completed and submitted to the lender.
  7. When buying a home in California, homeowner’s insurance must be purchased. This is an important part of reducing risk to lenders, but some homeowners can actually avoid this step if insurance is already provided through an HOA or similar organization.

Remember, this entire process can be long and time consuming, and it usually requires a lot of preparation and research from the borrower. Because of this, it’s best to start preparing documents as early as possible. Even if you can’t get the documents in hand, you should at least figure out how to get them. Also, it’s best to maintain a consistent work history and credit profile during the mortgage-approval phase, so avoid changing jobs if possible and don’t take out new lines of credit or borrow money for new vehicles or other large purchases.

Phase 3: Closing the Deal

Compared to the other phases, closing the purchase deal in California is usually fast and simple, and it often can be completed in a few days. However, a week may be required in some cases. This is in sharp comparison to states that require an attorney review, which California does not.

  1. In many cases, the title search is performed just before the closing, which will determine whether there are any liens or assessments against the title. Assuming the title is clear of any disputes, the procedure for closing can begin and title insurance will be prepared. The buyer can also request a title search before closing procedures, but there may be an additional fee. This may reveal information on the property that could be useful before the purchase.
  2. The lender will then send the final loan documents to the escrow agent, which is required when buying a home in California.
  3. The buyer now signs all the closing documents and the documents pertaining to the final loan.
  4. At this point, the buyer will need to pay the remaining funds for the down payment and closing costs, which will be done through the escrow agent, closing agent, or representative from the title company. For efficiency, this can actually be done a few days in advance.
  5. The deed will then be recorded with the right municipality, which is typically either a city or a county.
  6. Congratulations are in order! The deal is now closed and the buyer will receive the keys to their new California home. Unless there are different indications on the contract, the buyer now has official ownership of their new property!

This document is not meant as legal advice. Laws are subject to change, so always speak with a qualified professional before making any decisions regarding mortgage transactions or real-estate purchases.

Colorado

  • In Colorado, a closing agent is required for all real estate transactions. This person can be an escrow agent or a representative from a title company. Their job will be to complete the transaction and prepare the proper closing documents.
  • When buying a home in Colorado, the buyer and seller will usually complete the transaction at the same table.
  • Colorado has a few unique features to its home-buying contracts. These peculiarities are described in the Dates and Deadlines section, so Colorado buyers are encouraged to pay close attention to this area.

The Step-By-Step Process For Buying A Home In Colorado

Phase 1: Colorado’s Disclosure, Inspection, and Title Process

When you are on contract with a seller, these are the steps that you will need to complete. In most cases, you can start Phase 2 steps at the same time.

  1. To start the process, an offer will be accepted by the seller and a contract will be signed.
  2. A deposit will then be paid to an escrow agent, a broker, or an attorney.
  3. Once the contract is signed, it will be sent to a title company and the title search will begin. All of the work related to the transfer of the title and changes in information will occur during this step. Title commitment and title insurance will also occur. This should be done as soon as possible so the appraisal can be completed and any defects that impact the value of the property can be identified and addressed.
  4. The buyer now has the chance to review and sign off on any disclosures related to the property. The disclosures will vary, but they often include known flaws with the house, as well as previous repairs and improvements. It can also include environmental hazards. A seller’s property disclosure is often completed by the seller and given to the buyer before the contract is signed. Buyers are usually expected to work these disclosures into the initial contract price, so sellers may see them as a benefit. Because flaw were disclosed previously, sellers may be less likely to provide credits or reductions further in the process.
  5. An EPA-mandated lead disclosure will be required if the house was built before 1978. This document essentially says whether or not the seller has any knowledge of lead paint in the home. The property owners may also be required to disclose any known drug labs that were present at any time in the past.
  6. Water rights are an important issue in Colorado, and these will be disclosed by the seller.
  7. A change-of-ownership form must be completed if the property has a water well. If the well was never registered with Colorado officials, the buyer may have to pay for this service in the future.
  8. The buyer now has the chance to perform an inspection on the property, and may report any findings if certain flaws are discovered. They will have to complete this step before the inspection completion deadline, which is usually described in the contract. There are many types of inspections that a buyer can choose, but they commonly include an inspection by a licensed home inspector, which will be a general review of the home. Other inspections and testing can be requested if the initial inspection reveals any issues. If a buyer does not complete this step before the end of the inspection completion deadline, they have essentially waived the right to inspections and repair requests. Before the deadline, buyers can also request a radon inspection or a property inspection, which can both be useful in certain areas.
  9. The buyer can report issues discovered during the inspections using an inspection objection, which is found on a standard form. If flaws are discovered, the buyer and seller can negotiate a solution. This solution can include credits for repairs or closing costs. They also have the option at this point to walk away from the contract and recover their money, which is still being held in escrow.
  10. The buyer may end up with a list of due-diligence documents, which are specific to buying a home in Colorado. If there is any standard leasing or obligations on the seller, the buyer has until the end of a specifically-agreed deadline to break off the deal. If any flows or problems are found, the buyer may be able to stop the deal.
  11. The buyer can also negotiate a home warranty, which is also known as a home protection plan. This covers the major appliances from failure for a certain period after the sale; usually about 12 months.

Phase 2: Getting a Mortgage in Colorado

Most people will need to borrow money for the purchase of a home, and this can be one of the most stressful and uncomfortable times through the entire process. However, when you follow these steps, which can usually be completed at the same time as Phase 1, buying a home in Colorado is much easier.

  1. First, you will have to submit a loan application to the lender, which you can do directly or through a mortgage broker. This assumes that you have already completed the pre-qualification and pre-approval steps, which are most often completed before you begin looking for a home.
  2. Within three days of your application, the lender will submit a document called a good faith estimate, which is also called a “GFE.” This is submitted to you (the buyer) as a description of the estimated costs. Be aware that the final costs tend to differ slightly, as this is just an estimate.
  3. It’s now your turn to act. As the buyer, you’ll have to send a wide range of information related to your finances to the lender. Some unique information may be required, but you can generally expect to send the following items:
    – Information related to the bank accounts that you hold. This should include several months’ worth of information.
    – Information on your debt load, which can include documents related to outstanding debts, lines of credit, and any financial obligations and liabilities such as rent payments.
    – Pay stubs and contact information related to your employment.
    – If there is any other information related to your finances, it should be included. For example, you may need to bring information on divorce settlements, child support that you receive or pay, liens, bankruptcies, and even court judgements. Basically, if there is something that affects your monthly income, it must be included at this point.
    – Information related to credit inquiries, which will impact your credit score. (Lots of credit inquiries can create risk for lenders.)
    – If you have any large deposits or cash gifts in any of your accounts, you’ll likely have to provide information. Large gifts are especially important to lenders, and they will usually require a document from the donor called a “gift letter.” This letter should state that the money is a gift and not a loan, and will therefore not require repayment. Not all gifts require a gift letter, and it’s usually determined by the amount of the gift compared to your annual income. For example, a $4,000 gift may require a letter if the buyer earns $40,00 a year, but probably won’t be required if they earn $200,000 annually. Talk with your lender to see if a gift will require explanation.
    – The lender may finally ask for repeat information or verification of certain documents. As far as lenders see it, anything can happen, and lenders who have been in the business for a while have likely seen a borrower’s situation change rapidly during the escrow process. Because of this uncertainty, you may have to provide multiple documents that further verify financial information. For example, they may ask for pay stubs to verify bank deposits, or rent receipts to verify payments. If there are any misalignments between documents, you may have to start the entire process from the beginning. This is just another reason to start Phase 2 as soon as possible.
  4. The lender will now deliver an approval decision. Assuming they provide the loan, they will issue a loan-commitment letter, which basically verifies their willingness to provide the loan provided certain provisions are met, which usually includes an appraisal or references to changes in your situation or the property.
  5. At this point, the financing loan contingency is removed by the buyer before the deadline, which will be defined in the contract. This date is the official endpoint for buyers to object to the loan details. If the buyer would like to end the deal and recover their money because of an issue with the loan, these objections must be communicated in writing to the seller.
  6. The lender or mortgage broker will now order an appraisal, which is done through an appraisal management company. This will need to happen before the appraisal deadline, which is also described in the contract. The lender or broker can request a different appraiser if they see fit, but they are not able to request an appraiser of their own choosing. In Colorado, there is an appraisal objection deadline; before this date the buyer must act on any appraisal that comes in under the sale price. They must inform the seller and they now have the option to walk away from the deal if they wish.
  7. Homeowner’s insurance will also need to be purchased at this point. If the property being purchased has insurance already, such as through a homeowner’s association, there will be no need to purchase insurance. Proof of insurance will need to be submitted to the lender. Almost all Colorado contracts will have a contingency that requires insurance, and if the buyer is unable to get insurance, they can discontinue the deal. This must all be completed before the deadline for purchasing or proving property insurance.
  8. Hazard insurance may also need to be purchased, which will protect the investment from fire or storms. If the Colorado home is in a flood plain, flood insurance will also be required.

No matter where you live, the mortgage process can be long and frustrating, and in many cases you’ll feel it is unnecessarily detailed. However, the process is critical to securing a mortgage loan, so you should start as early as possible and secure the documents immediately. It also helps to avoid switching jobs or creating new lines of credit, as this can cause the entire process to restart.

Phase 3: Closing the Deal in Colorado

Before finally buying a home in Colorado, you will have to go through the closing phase. This will happen at one table, either at the office of the title company official or the lender. When everyone meets, the buyer and seller will sign the documents related to the loan and the transaction. Once the documents are signed, the deed is recorded, and payments have been exchanged, buyers will take possession of the keys, unless there is some type of agreement that allows the seller to stay in the property for a certain period.

  1. In preparation for the closing, the title company will perform a title search to find out if any liens or other financial obligations are standing against the property. If the title is “clear,” the closing procedures can then commence. All of the paperwork will be completed and title insurance will be prepared, and a final closing date is determined.
  2. A final amount for the buyer’s total will be determined. The buyer will need to bring this amount in the form of a cashier’s check. This will be based on mortgage closing costs, property taxes, and utilities.
  3. A final walkthrough will then be scheduled and performed. This is to verify the condition of the property.
  4. At the closing table, the buyer and seller will sign all the documents required, including the final loan documents.
  5. The buyer now pays the remaining funds in their downpayment to the attorney or a title-company representative who is acting as the settlement agent.
  6. The representative or attorney will record the transaction and deed with the specific municipality.
  7. Congratulations! You will now receive the keys and officially take control of your Colorado home!

Always consult with a qualified professional before making any decisions on a mortgage or buying a home in Colorado. This article is for general information only, and because laws change, some information could be out-of-date.

Florida

  • In Florida, the home-buying process is similar to other states that require the use of a buyer’s attorney, escrow agent, or representative from a title company. This is used to prepare the closing documents and finalize the transaction.
  • The buyers and sellers will complete the transaction at the same closing table, which is sometimes called a “settlement table.”
  • Florida also has its own specific features regarding the environment. These will impact inspections, including how termite inspections are performed. Termite bond contracts are common ways that buyers can protect their investment in Florida, as well as other southern states.

The Step-By-Step Guide For Buying A Home In Florida

Phase 1: The Title, Disclosures, and Inspections

Once the home-buyer is in contract with a seller, these are the steps that need to be completed. In most cases, they can be completed at the same time as the steps in Phase 2.

  1. The seller will accept an offer by the buyer and a contract will be signed.
  2. An escrow agent, buyer’s attorney, or broker will receive the deposit.
  3. A contract that is signed is sent to a closing agent or title company, which will then start the paperwork for transferring and changing the title.
  4. The buyer now has a chance to review the disclosures. These disclosures are based on the property type, but they should include known flaws with the property or previous remodels and repairs. A disclosure statement will be given from the seller to the buyer, and this document will outline all the disclosures related to the home. This is seen as beneficial to the seller because they can assume everything is disclosed from the start so no credits or price reductions should be needed.
  5. The buyer will now elect to perform any required inspections on the property, which are agreed in the contract. The inspections will need to be completed by a specific date, which is defined in the contract. The types of inspections will vary, and some areas of Florida require different types of inspections. However, a home inspector will generally go through the home, followed by specific tests if needed, such as termite inspections, which are common in Florida and other southeastern states. A dry wall inspection may also be completed.
  6. A termite bond contract may be included with the home. This is done with an extermination company to protect the house from termite damage in the longterm.
  7. In addition to the drywall inspection, a seller will also provide and sign a Defective Drywall Disclosure, which essentially states that the seller has no knowledge of any problems with the existing drywall.
  8. Depending on the outcome of the inspections, buyers can request repair work, closing credits, or a reduction in the sale price from the seller. In response, the seller has three options. First, they can agree and complete all of the requests. Second, they can negotiate a solution with the buyer. Third, they can decline all of the buyer’s requests. In response, the buyer can continue negotiations, accept the seller’s response, or walk away from the deal, ending the transaction without loosing their invested money, which is held in escrow.
  9. The buyer can also negotiate a home warranty, which will cover the major appliances from failure. Typically this will cover the appliances for 12 months, but longer periods are possible.

Phase 2: The Mortgage Application

As the buyer, you will need to submit a mortgage application to your lender. This will be done either directly or through a mortgage broker.
  1. The lender will then deliver a “Good Faith Estimate,” also known as a GFE. This is a breakdown of the estimated costs, but it will likely vary compared to the final costs. The GFE will be delivered within three days.
  2. Before the buyer has a chance to write an offer on a home, pre-approval will need to be completed with a lender. During pre-approval, the buyer will need to send a wide variety of financial information to the lending agent. These documents will often include a wide range of information, including:
    – Several months of information on bank accounts, including all accounts held by the borrower.
    – Statements on outstanding loans, financial liabilities, and lines of credit. There should be several month of information, and it can include rent checks in applicable.
    – You will need two years of tax-return documents from the IRS. These will be released straight to the lender using a specific IRS form. (Form 4506-T)
    – Information related to your employment, including recent pay stubs and contact information. The number of pay stubs will depend on the type of loan and your specific situation.
    – Any disclosures that are relatable to your financial situation will need to be presented. This can include divorce settlements, child support, court judgements, and liens against your property. Basically, if it affects your finances in a significant manner, it should be included.
    – You will also need to explain any credit inquiries, which can impact your overall credit risk.
    – If you have any large deposits in your account, you will likely need to provide information on these payments. Large gifts, for example, are useful for funding a down payment, but lenders will want information on this money, especially assurance that it is not a loan that will require repayment, which will impact your future finances. If you have a large gift in your account, the donor may need to supply a “gift letter,” which outlines the nature of the money and specifically states that it is a gift and not a loan. This letter will likely require contact information for the donor.
    – The lender may also request repeated or updated verification on any of the above documents. Lenders need to be as detailed as possible during the approval process, so they may request multiple documents to support certain facts, such as your income or debt load. You may also need to bring updated or recent pay stubs, rent receipts, bank statements, or other disclosures as the lender sees fit. If you have any changes to these documents, the lender may need to reassess your eligibility for the loan.
  3. Once all the documents have been provided, the lender will give you their decision. Assuming you are approved, you can then move forward with the loan commitment letter that is issued from the lender. This letter basically states their intention to finance your home purchase. There may also be conditions, such as an appraisal. Conditions can also include a statement from the lender that allows them to pull out if there is a change in your financial situation.
  4. At this phase the loan contingency can be removed by the buyer, and this will be done before the expiration of the loan-commitment period, which is sometimes called the loan-contingency date. The buyer will complete this by sending a copy of their loan commitment. If the buyer is unable to get their approval to the seller before the expiration period, they have to send written notice during the timeframe to ensure they are able to get out of the deal without losing their financial commitment.
  5. An appraisal will now be ordered by the lender or the mortgage broker through a central directory of appraisers. They will be unable to order the appraiser of their choice, but they can request a different appraiser if they are unhappy with the one selected. If the appraisal comes in lower than the purchase price, the buyer will request a deduction in the price from the seller. The seller then has a chance to accept or reject the request; if they reject, the buyer can walk away from the deal.
  6. Homeowner’s insurance will also need to be selected at this time. This helps protect the lender, but if the home already has insurance, such as through an HOA, the buyer will only need to provide verifying documents.

Purchasing a home can be difficult, but when you use the right approach and start as soon as possible, getting a mortgage can be easy. At times, it can seem like the process is too complicated, but the mortgage-approval process can be handled with ease. We encourage you to avoid making any changes to your financial situation or credit profile until after the transaction has been completed, as changes can cause the process to restart from the beginning.

Phase 3: Closing the Deal

When buying a home in Florida, the closing process will happen at one table, either at the office of the attorney or title company. During this phase, the buyer will sign all the required documents related to the loan and the transaction. Once the documents have been signed and payments exchanged, the buyer will get possession of the property. (Unless an agreement has been reached that allows the seller to stay in the home for a certain period.)

  1. Part of the preparation for closing includes the attorney or title company performing a title search, which may have already been done. This will determine if there are any liens or assessments against the title of the property. If the title is “clear,” the closing will continue as planned and a title commitment will be issued. All paperwork for changing the title and deed, as well as title insurance, will now be prepared. A final closing date will also be set.
  2. A final cash figure for what the buyer needs will also be generated. This is the amount that the buyer needs to bring in a cashier’s check, and it’s based on a few factors, including closing costs, property taxes, and utilities.
  3. Before the final closing, a final walkthrough will need to be performed. This will verify that the property is in the same condition as it appeared during the sales process.
  4. At the closing table, all the appropriate documents will be signed, including the final loan documents.
  5. The buyer will now pay the remaining fund to the an attorney or a representative from the title company. Again, this will be a cashier’s check.
  6. The transaction will now be recorded with the appropriate municipality. The buyer gets the keys and officially takes possession of the property!

This document is intended as an informative guide and should not be taken as legal, financial, or property advice. Laws will change on a regular basis, so always speak with a qualified professional before making any decisions.

Idaho

  • Idaho has a home-buying process that requires the use of an escrow agent, closing agent, or representative from a title company. These professionals are used to complete the purchase transaction.
  • When buying a home in Idaho, your funds and the purchase contract will be held in escrow by a neutral party. They will be released when the agent or representative confirms that everyone has completed their roles. The agent or representative will also prepare the new title.
  • Documents are then signed and payments are made. The escrow company will then disburse all the necessary funds and the agent will deliver the house keys to the buyer.

The Step-By-Step Process For Buying A Home In Idaho

Phase 1: Disclosures, Credits, and Home Inspections

Once you are in contract with a seller, these are the steps you need to take. In most cases, you can begin Phase 2 at the same time as Phase 1.

  1. First, an offer will be accepted by the seller. Now a contract is signed and the escrow process will begin.
  2. A deposit will now need to be made. This deposit is placed with the seller’s brokerage firm, an escrow agent, or an attorney, depending on the specific contract. It must never be delivered directly to the seller.
  3. When buying a home in Idaho, you will receive a seller’s property disclosure, which is a mandatory form that must be delivered within 10 days of the contract signing. This will outline various disclosures related to the property and will include known flaws to the house and surrounding property. As the buyer, you will have to review and sign this document, acknowledging your awareness of the stated flaws.
  4. You now have a specific number of days, as outlined in the contract, to perform any inspections to the property as you see fit. Typical inspections in Idaho include basic inspections by a general contractor, as well as termite inspections. You may also choose a property survey at this time. You’ll have a certain amount of days to complete inspections and respond to the current owner or selling agent.
  5. If any flaws or issues are found during the inspections, you’ll now have a chance to report the defects and, if you wish, terminate the contract. However, you can also ask that the seller make modifications or provide credits for the closing costs to cover the price of repairs. The seller can now agree to the requests, negotiate a solution, or refuse to make changes. Depending on the seller’s response, the buyer can either accept the response, continue negotiations, or walk away from the contract and recover their money, which is still held in escrow. For legal documentation, this must all be done in writing.
  6. The buyer can now negotiate a home warranty if they wish. Also called a home protection plan, this covers major appliances for about a year in the event of a failure.

Phase 2: The Mortgage Application and Approval

For people who borrow money to purchase a home, which includes most homebuyers, the mortgage application can be one of the most stressful and prolonged phases. However, if you start early, compile the right documents, and follow the steps, it can be easier and faster than you might think.

  1. To start the mortgage process for buying a home in Idaho, you will submit a loan application to your lender. This will be done either directly or through a mortgage broker. Pre-qualification should have been completed already.
  2. The lender will then calculate an estimate of the closing cost and send it to you in a document called a “good faith estimate,” also known as a GFE. Be aware that the final costs may differ, as this is simply an estimate.
  3. Working with your lender, you will now have to send a wide variety of information and financial disclosures. Specific documents will vary, but you can generally expect to need the following:
    – Bank statements for all the accounts that you own. This should include several months’ worth of information.
    – Information on outstanding loans, financial liabilities, and lines of credit. It can include documentation of rent payments as well.
    – Tax returns for the past two years. This should be released to the lender through the IRS’s Form 4506-T.
    – Contact information and pay stubs from your current employer.
    – Any other disclosures that are related to your financial situation. For example, if you pay or receive child support, it should be included. This can also include divorce settlements, court judgements, bankruptcies, and liens against your property.
    – You’ll also need to explain any credit inquiries, as these can impact your credit risk in the eyes of lenders.
    – If you have received any large payments, you’ll need to explain this income to lenders. Gifts can be helpful for funding a down payment, but your lender may request information on the gift in the form of a gift letter. This letter will outline the nature of the gift and state that it is not a loan, which is extremely important. Whether or not you need a gift letter will depend on the size of the deposit compared to your overall income. For example, a $5,000 gift to a person earning $30,000 a year may require a gift letter. But the same amount to someone earning $150,000 will probably not call for a letter.
    – Although it may seem silly, the lender will request verification information on some or all of the above documents. To reduce risk, they may want to double-check information such as your income or your total debt load. You may, therefore, be asked to bring multiple copies of pay stubs, rent information, or bank statements. Also, if there is a change in your financial picture, you may need to start the process all over.
  4. The lender will now give a preliminary approval decision, assuming all your information checks out. If approved, they will issue a preliminary loan approval, officially stating that your credit, income, and debt ratios are sufficient to fund the loan. There may be conditions however, including appraisals. It will generally include conditions regarding any material changes to your loan; basically, this condition says the loan can be dropped if you have changes to your financial or credit situation.
  5. Within a specific number of business days, the buyer must provide conditional-approval documents to the seller. This document will state that the buyer will be approved for the loan if the appraisal comes in equal or above the purchase price. This is basically a letter stating the lender’s commitment, and providing this document results in a loan contingency to the contract. If the buyer is unable to provide this letter by a certain date, the seller can inform the buyer and cancel the contract.
  6. The appraisal is then ordered by the lender or a mortgage broker. This is done through a directory of appraisers, which is sometimes called the Appraisal Management Company. The lender or broker cannot choose a specific appraiser, but they can request a different one if they wish. If the appraisal comes in lower than the purchase price, the lender can decline to issue the loan, as lenders don’t want to fund a mortgage supported by a less-valuable property. Unless a change is made to the value of the home or the size of the down payment. In most Idaho contracts, an appraisal contingency is stated, which requires the property to appraise at or above the purchase price, or else the buyer is entitled to walk away from the contract and recover their money held in escrow.

The mortgage-approval process can be time consuming and frustrating, so we encourage you to start as soon as possible. With proper preparation, you can complete this phase quickly and move on.

This article on buying a home in Idaho is meant for general information only, and should not be taken as legal or financial advice. Laws change, so always talk with a qualified professional before making any significant decisions related to real estate.

Illinois

  • Buying a home in Illinois requires the use of escrow, and it is similar to other states that use an attorney review. A real estate attorney will be used to complete the transaction and prepare all the necessary documents.
  • There will also likely be an attorney-review period at the start, which is usually five (5) days. This will be completed before the contract is finalized.
  • In Illinois, the purchase will be completed at the closing table (also called a “settlement table”) at which both the buyer and seller will be present.

The Step-By-Step Process For Buying A Home In Illinois

Phase 1: The Attorney Review with Inspections and Possible Credits

Once a buyer is on contract with a seller, these are the initial steps. Usually they can be completed alongside Phase 2.

  1. An offer will need to be accepted by the seller and a contract will be signed. This launches the attorney-review process if required in the contract. Either party can exit the deal at this point without penalty.
  2. At the same time, a deposit, also called “earnest money,” will be paid to the buyer’s attorney or broker.
  3. The buyer will now have a chance to sign off on any disclosures. The disclosures will always vary, but they usually include flaws to the property that are known by the current owner. They can also include previous repairs and potential environmental hazards presented by the home or property. Seller will disclose these flaws and factor them into the asking price, which means they may not agree to credits or price reductions caused by the flaws because, in their mind, they have already been worked in.
  4. The buyer now has a chance to perform inspections as they see fit. The inspections will need to be completed by a certain date, which is known as the inspection-contingency date. The buyer can choose a wide variety of inspections if they desire, but they will often include a general inspection by a licensed contractor and an inspection for lead paint and asbestos, as well as other potential toxins.
  5. The next step will depend on the results of the tests. If everything checks out, the buyer and seller can move forward. However, if the inspections reveal any issues with the home, the buyer can request repairs, closing-cost credits, or a reduction in the sale price. The sellers can then respond in kind. They can either agree to all the buyer’s requests, offer a modified solution, or decline the buyer’s requests entirely. In response, the buyer can accept, continue with negotiations, or leave the deal without any financial penalty.
  6. The buyer also has a chance to negotiate a home warranty, covering major appliances from failure. This usually covers appliances for roughly a year.
  7. The inspection contingency is now removed by the buyer. If they fail to make an inspection response to the seller by a certain date, they have effectively waived the inspection contingency.

Phase 2: Securing the Mortgage Loan for Buying a Home in Illinois

Most people buying a home in Illinois will need a mortgage loan. Unfortunately, securing the loan can be one of the most complex and detailed phases of the entire process. Therefore, it’s best to start as early as possible and collect as much information as you can. When buying a home in Illinois with the use of a mortgage loan, these are some of the basic steps:

  1. The first step will be to submit a mortgage-loan application to your lender. You can do this through your broker or directly to the lender.
  2. After three days or less, you should receive a GFE, for “Good Faith Estimate.” This is a breakdown of the estimated costs for closing the loan, and it will likely vary slightly from the final price.
  3. Before you can make an offer on a home, you will need to be pre-approved for a loan. To complete this step, you will have to bring a wide variety of information to the lender. This information will include documents related to your credit, income, and debts, such as:
    – Several months’ worth of bank statements, including any and all accounts that you currently own.
    – If you have outstanding loans, lines of credit, or any other financial liabilities, bring at least two months of information on these items. This should also include rent payments if you have any.
    – Up to two years of tax returns, which can be ordered through the IRS using IRS Form 4506-T.
    – Bring information from your work, including recent pay stubs and any contact information from the employer. The amount of pay stubs will vary so ask your lender.
    – Information related to your overall financial situation. This can include anything that increases or reduces your monthly expenditures. For example, if you pay or receive child support or divorce alimony, make sure it is included. If there is something that impacts the money you have on hand, include it in your documents.
    – You should include an explanation of any recent credit inquiries.
    – Information related to large deposits, especially any gifts. While gifts are great for funding a down payment or closing costs, they present difficulties for lenders. In many cases, you’ll have to bring a “gift letter” from the donor, which explains the nature of the deposit, contact information for the donor, as well as information stating the money is a gift and not a loan, and will therefore not require repayment. The amount that triggers a gift-letter requirement will depend on the size of the gift compared to your annual income. Ask your lender if a gift letter or further information is required in regards to one or more of your large deposits.
    – If requested by the lender, you may also need to bring repeated or updated documentation for any of the above information. Lenders take on a lot of financial risk when they write loans, so they may require multiple verifications of certain points, including information on your income or debt load. Your lender may ask for updated pay stubs, rent receipts, and bank statements. If there is any changes in the content of these documents, the lender may be forced to reassess your loan.
  4. The lender will eventually have to render a decision. Assuming you are approved for the mortgage loan, you will be issued a loan commitment letter, which basically says that you have been approved for a loan once certain conditions are met. These conditions can include an appraisal so the lender can confirm the value of the property, as well as a requirement that no material changes are made to your financial situation.
  5. A financing contingency will be removed by the buyer before the loan-contingency date, which is defined in the contract. The buyer may ask the seller for an extension to their loan contingency if they have not yet received their letter. In Illinois, the buyer will have to submit the request for an extension in writing, and the seller has to set a specific number of days to respond if they don’t want to allow for the extension period.
  6. The lender or mortgage broker will now order an appraisal on the property. This is done through a directory of appraisers, and while they cannot request the appraiser of their choice, they can request a different one if the appraiser does not meet their needs. (They simply can’t order the appraiser of their choosing.) If the appraisal comes in low, the lender can decline the loan unless a change is made, such as modification to the home or a reduction in the sale price.
  7. The homeowner will now need to purchase homeowner’s insurance. In some cases this is supplied by organizations, such as an HOA; if this is the case you don’t need to order insurance. You may also need to order title insurance before the loan is written.

As we discussed above, this can be a lengthy, complicated process, so it’s best to start early. You may find that the process is overly complicated and focused on insignificant details, but remember that lenders need as much information as possible to reduce their financial risk. It’s in their best interest to be meticulous, but once the process is complete you’ll have a loan that helps you finance a home you’ll love for decades. Be sure to avoid any changes in your financial situation during this time. Even positive changes, such as a job with a pay increase, will cause the mortgage-approval process to halt, and even reset. Avoid new jobs, new lines or credit, and leasing vehicles until the process is complete and buying a home in Illinois will be much easier.

Phase 3: The Closing Process in Illinois

When you are buying a home in Illinois, the closing process will take place at a single table where all parties will sign the appropriate documents. The location of the closing is usually the office of an attorney or the title company. Once all the documents have been signed, buyers will be able to take possession of the home. However, there may be a contingency that allows the seller to stay in the property for a certain period.

While the closing process is faster than most other phases, there are some steps to remember, including:

  1. A title search will be conducted before the closing to make sure there are no liens or assessments against the property. Assuming the title is clear, the closing can proceed as planned. Remember that the buyer can ask for the title search in advance of closing the deal; if the search reveals any issues, they can request changes to the price or the contract itself.
  2. It’s now time for the buyer’s attorney to go to work. The buyer’s attorney will begin preparing the paperwork for the title and deed, and will file an application for title insurance if required by the lender.
  3. A final closing date will now be scheduled.
  4. A cash figure for the buyer is calculated. This is the amount the buyer will need to bring in a cashier’s check to the closing meeting. It is based on a mortgage closing cost as well as property taxes and other figures.
  5. A final walkthrough of the property will be scheduled. This will be performed before the final closing to verify the condition of the property.
  6. At the closing table, the buyer and seller will sign the appropriate documents for transferring a home in Illinois.
  7. The buyer will now pay the remaining fund for the down payment (a cashier’s check) to the attorney or representative of the title company.
  8. The representative or attorney will record the transaction and deed with a city or county.
  9. Congratulations! You will now receive the keys to your new Illinois home and, assuming there are no delays, take complete possession of the property!

This is an informational document meant as a general guide, and should not be taken as legal, financial, or real-estate advice. Always talk with a professional before making any decision on property or mortgages.

Nevada

  • When buying a home in Nevada, you will use an escrow process. An escrow agent, closing agent, or representative from a title company will be required to complete the transaction.
  • Your funds and the purchase contract will be held in escrow by a neutral party until the agent verifies that both parties have completed their roles properly.
  • All the documents are signed and payments are made. Within a few days, the escrow company will release the funds and the listing agent will give you the keys to your new homeowner.

The Step-By-Step Process For Buying A Home In Nevada

Phase 1: Disclosures and Due Diligence for Buying a Home in Nevada

When you are in contract to buy a home in Nevada, these are the initial steps you need to complete. You can usually start Phase 2 at the same time.

  1. First, an offer will be accepted by the seller. Once a contract is signed, the escrow process will begin.
  2. A deposit, called the “earnest money” will be placed with the seller’s real estate broker, an escrow agent, or an attorney, depending on the nature of the contract. (It won’t be given directly to the seller.)
  3. As the buyer, you will then review and sign off on any disclosures, which are usually attached in a form as an addendum to the purchase contract. These disclosures will vary, but they are based on the type of property. This is required by law, and sellers usually see it as beneficial as they can then work the disclosures into the sale price. Because of the initial disclosures, they may be less likely to allow reductions and credits.
  4. Buyers are now expected to use the due diligence period to perform inspections on the home and check for other factors that may influence their interest in the home, including schools and the general neighborhood. During this period, the buyer can terminate the contract without penalty. They will need to perform various inspections, including a general inspection and a termite inspection. A property survey may also be requested by some buyers.
  5. If the buyer finds any issues, they can report them to the seller and terminate the contract. They can also ask the seller to remedy the situation. In Nevada, the due diligence period extends by the amount of days is takes the seller to respond to the requests. Sellers can also ask for a “limit of liability” and place a cap on the amount they’re willing to pay for repairs and certifications due to defects uncovered during inspections.
  6. The buyer can now negotiate a home warranty, also known as a “protection plan.” This covers the major appliances from failure for a certain time period, generally one year.

Phase 2: Securing a Mortgage in Nevada

Lake Tahoe between California and Nevada.
Buying a home in Nevada allows you to enjoy natural beauty in a fun, lively state.

For most people, purchasing a home means taking out a mortgage loan. Unfortunately, this process can be complicated and stressful. When you follow the right steps, however, it’s easier than you might think.

  1. The first step to securing your loan for buying a home in Nevada will be to submit a mortgage application. This can be done either through your mortgage broker or directly to your lender.
  2. Assuming you are approved, your lender will issue a “Good Faith Estimate,” also known as a GFE. This will be issued to the buyer and it will describe the estimated closing costs, which will likely differ slightly from the final total.
  3. You will now have to send a series of financial documents to the lender. These will vary by situation and the type of loan (FHA vs jumbo, for example) but will generally include some of the following:
    – Bank statements for several months in the past. This should include all accounts that you own.
    – Information on your debt load, including lines or credit, rent payments, and all other financial liabilities.
    – Tax returns for the past two years. These will be released to the lender using a specific IRS form.
    – Any and all information that relates to your personal financial situation. This can include divorce settlements, child support, court judgements, or liens against your property. Essentially, if there is anything that impacts your finances, it will need to be sent to the lender.
    – Explanation on any credit inquiries, which, statistically speaking, impact your credit risk.
    – Verification of any deposits that are significantly large compared to your overall income. Lenders need to know where certain deposits came from, as well as the nature of the money. If it is a gift, you will likely need a “gift letter” from the donor. This should include the donor’s information, as well as a statement that the money is a gift and not a loan. It must also include the donor’s signature. The amount that requires a gift letter will depend on the size of the loan compared to your overall income. For example, a $5,000 gift to someone earning $40,000 a year may require a gift letter, but the same gift to someone earning $150,000 may not. Talk with your lender so you can get the letter as soon as possible.
    – If requested by the lender, you may also need to bring updated information on any of the above points. Remember that a lender is trying to reduce their overall risk, and the more information they have, the better they can assess your overall credit picture. Bring the right information and you will increase your chances of approval, and don’t be surprised or offended if the lender request additional pay stubs, bank statements, or other disclosures.
  4. Your lender will now render a preliminary decision. If you are approved, they will issue a preliminary loan approval, a document that basically states their willingness to fund the mortgage assuming certain conditions are met. The conditions generally include an appraisal, as well as a requirement that there be no significant changes to your financial, debt, or credit situation before buying a home in Nevada. It may also include a clause stating there should be no material changes to the property.
  5. The next step will be an appraisal, which helps the lender verify the value of the home. An appraisal will be ordered by either the lending agent or the mortgage broker, and while they cannot request a specific appraiser, they can ask for a different one if they wish. If the appraisal comes in lower than expected, the lender may ask for changes to the purchase price or the down payment.
  6. When buying a home in Nevada, a financing contingency will often be used. This will state that the buyer must get pre-approved and schedule the appraisal within a certain date. This date is called the “financing contingency date.” If the buyer can’t reach the deadline, the seller is able to terminate the deal and the buyer will get their money back from escrow. In Nevada, the buyer has to pursue the loan and keep all parties informed on their progress.
  7. If all is still going as planned, the lender will submit a request for the title commitments, which is sent to the title company. The title company will examine the title for quality and compare it to the survey. If it’s good, they will issue a title commitment, certifying that the title is free and clear of issues. Title insurance may be ordered at this point.
  8. You will now need to purchase adequate homeowners insurance unless the property is already covered by a plan.
  9. Additional hazard insurance may also be needed, such as protection from fire and storms. If the property is in a flood plain, flood insurance will also need to be ordered. Make sure you keep documentation of insurance coverage.

Remember that the loan-application process for buying a home in Nevada can be long and complicated. If might seem frustrating to bring so many documents to the lender, but this is an important part of their overall work. To make the process easier, start early; if you can’t actually get the documents, at least understand how to get them when they are needed. Also, avoid making any significant changes to your financial situation at this time. If possible, don’t change jobs, and don’t borrow money or take out a car lease. Any changes could trigger a restart in the entire mortgage-loan process, so avoid this issue if at all possible.

Phase 3: Closing the Deal

For the buyer, the closing process is likely the easiest phase, but you still have to prepare certain documents and be available for meetings. It usually takes a couple of days to a week to complete, and in Nevada the transaction will not need to be consummated with all parties at the same table. Nevada is an escrow state, so closing will consist of these steps:

  1. The buyer’s lender will send loan documents to the escrow agent and the final date for settlement is scheduled.
  2. A final walkthrough of the home will occur. This is to verify that the home is in the same condition as when it was appraised and viewed by the buyer.
  3. A settlement will convene at the office of an escrow agent, closing agent, or title company. In most cases, the seller will sign the closing documents first.
  4. The buyer then has a chance to sign the documents for buying a home in Nevada, including the final loan documents.
  5. The buyer now pays the remaining sum of their down payment and closing costs. This is give to the escrow agent, closing agent, or a representative from the title company. This is paid through a wire transfer or cashier’s check. It may be done in advance to speed the process.
  6. The deed will be recorded with the city or county and the escrow agent will release the funds to all parties.
  7. Congratulations! You can now receive the keys to your new Nevada home. Unless the contract has a clause of some type, you officially take possession of the home!

This article in meant for general information only. Laws are subject to change, so always speak with a qualified professional before making any decisions.

Texas

  • Texas uses an escrow agent, closing agent, or representative from the title company to complete the real estate transaction.
  • As the borrower, your funds, as well as the purchase contract, are held in escrow by a neutral party. They are held until an escrow agent verifies that all parties have completed their roles properly.
  • The escrow company will then release all funds to the appropriate parties and the keys to the property are given to the new owner.
  • Texas has a few unique environmental requirements that impact inspections, including termite inspections.

The Step-By-Step Process For Buying A Home In Texas

Phase 1: Disclosures and Inspections for Buying a Home in Texas

Once you are in contract with a seller, these are the initial steps that need to be completed. In many cases, they can be completed at the same time as the steps in Phase 2.

  1. First, an offer will need to be accepted by the current owner. Then a contract is signed and escrow begins.
  2. A deposit is placed with the seller’s real estate broker, an escrow agent, or an attorney, but never directly to the seller. Escrow companies are often part of the title company but work as a separate division.
  3. When buying a home in Texas, a small sum of money is usually exchanged for an option period, which is about 10 days. During this period, the buyer can back out of the contract for any reason and still recover their escrow deposit. The option period is usually in the hundreds of dollars.
  4. You will now have a chance to review the disclosures from the seller. These disclosures outline any know flaws with the property, and often include things like prior improvements or repairs, as well as potential hazards. A seller’s disclosure is provided by the day the contract is signed, and sellers usually want to disclose information upfront to avoid making reductions or offering credits in the future negotiations. Buyers are generally expected to account for the disclosures in their offer.
  5. As the buyer, you can now elect to perform inspections as you see fit. There is no inspection contingency when buying a home in Texas. Basically, an option period is used to give buyers a chance to inspect the home as they see fit and walk away from the deal if they wish. You can choose many types of inspections, but they usually include an initial inspection by a general contractor, as well as a termite inspection.
  6. Depending on the outcome of the inspections, buyers may choose to ask for repairs, credits on closing costs, or a reduction in the sale price. Sellers can then respond to the requests in three ways: accept the conditions, negotiate a solution, or reject the conditions outright. The process continues until an agreement is reached. At this time, the buyer has the chance to leave the deal without penalty.
  7. The buyer can also negotiate for a residential service contract, which is also known as a home warranty. This warranty covers major appliances from failure, and usually lasts about 12 months.

Phase 2: Getting Approved for a Mortgage in Texas

While some borrowers are able to purchase a home without a loan, the vast majority will need to take out a mortgage. This allows you to access a home that would otherwise be unaffordable, but unfortunately the process for getting approved for a loan in Texas can be lengthy. Your lender will need a lot of information, so it’s best to start as soon as possible.

  1. To start the process, you will submit a loan application to your lender, which will be completed either directly or through a mortgage broker.
  2. The lender will send a Good Faith Estimate, or “GFE,” within three days. This is an explanation of the estimated costs, but the final tally could differ.
  3. Before you can make an offer on a home, you must get pre-approved. To complete this process, you will need to send a wide variety of information to your lender. The specifics will vary, but you can expect to bring a few documents, including:
    – Bank statements from several months in the past. This should include all accounts you own.
    – Information on your debt load, including outstanding loans, lines of credit, and other financial liabilities. If you pay rent, include this as well.
    – Two years of tax returns. These will need to be ordered by your lender directly from the IRS using the 4506-T form.
    – Pay stubs and contract information for all of your employers, including both full and part time work.
    – Any information that is material to your financial situation. For example, if you send or receive child support, make sure this information is documented with your lender. This can also include marriage licenses, divorce settlements, property liens, and court judgements. If it impacts how much money you have on a monthly basis, include it.
    – If you have recent credit inquiries, you may need to provide explanations.
    – Information on any large deposits found in your accounts. Large deposits such as gifts are excellent for funding a down payment or closing costs, but lenders will want information on the gift if it is significantly large compared to your income. If the deposit is a gift, your lender may request a “gift letter” from the donor. This letter needs to explain the relationship between the borrower and donor, and should also state that the money is a gift and not a loan. The amount that requires a gift letter will depend on the size of the loan compared to your income. 
    – Finally, you may need to substantiate any of the above information and provide repeat documents. This is a basic measure used by lenders to verify important information such as your income or debt load. Remember that to lenders, anything can happen to your personal finances through the escrow process. They are in the business of reducing risk, so don’t be upset if they ask for repeat or redundant information. This can include updated pay stubs, rent receipts, bank statements, and any other financial disclosures that impact your income. If there are any differences in these documents compared to the previous information, the lender may need to modify or restart the loan application.
  4. Once all the documents are collected, the lender will render a decision. Assuming you are approved, they will issue a loan commitment letter. This letter essentially states their intention to fund the mortgage loan once certain conditions are met. These conditions vary, but usually include an appraisal, which will confirm the value of the house. The conditions can also include a clause that there should be no material changes in your financial situation; if changes occur, the lender can repeal the loan commitment.
  5. The financing contingency will need to be removed by the buyer. The date for this to occur is defined in the contract.
  6. An appraisal will now be ordered by the lender or mortgage broker through a central directory of appraisers. While they will be unable to choose a specific appraiser, they can request a different appraiser if they see fit. If the final appraisal comes in lower than expected, the lender may decline to approve the loan until certain changes are met. These can include changes to the purchase price or the down payment size.
  7. The lender will submit a request for title commitment to the title company. The title company then reviews the title for quality, and also checks the property survey. If no survey exists, one will likely need to be completed. If all goes as planned, the title commitment and title insurance is prepared, certifying that the title is ready for sale to the borrower.
  8. At this point, homeowners’ insurance will need to be purchased. Homeowners’ insurance protects the financial asset from harm, and proof will need to be delivered to the lender. If the insurance is already provided by an HOA or another association, you can simply submit their documents to the lender.
  9. Additional hazard insurance will now need to be purchased in certain circumstances. If the property is in a flood plain or at risk from hurricanes, extra insurance may be required by the lender.
 

Note: Be Patient with Mortgage Approval
Remember that the mortgage-loan approval process can take a long time to complete. Therefore, it’s best to start as early as possible and gather all the documents you need. During the mortgage application, it’s best to avoid making changes to your financial situation. For example, changing jobs can disrupt your approval, even if you stand to earn more money after the switch. You should also avoid opening lines of credit or financing vehicles until the process is complete. It can seem long and arbitrary, but once it’s complete you’ll be able to purchase the home of your dreams!

Phase 3: Closing the Texas Real Estate Purchase

In Texas, the closing process usually takes a couple of days to a week. This is different than states that require an attorney review, which Texas does not. The transaction is usually completed without the need to have all parties sitting at the same table at the same time.

The closing process in Texas usually includes:

  1. Your lender will send the final loan documents to the escrow agent, and the final closing date is scheduled.
  2. The closing itself occurs at the office of an escrow agent, closing agent, or title company.
  3. The seller usually signs the documents first.
  4. The buyer then signs the documents, including any remaining loan documents.
  5. You will then pay the remaining funds for the down payments and closing costs to the escrow agent. It can also be delivered to the closing agent or representative from a title company.
  6. The deed will be recorded with the appropriate municipality, usually a city or county.
  7. Congratulations! Unless there are further conditions, you will now receive your keys and take possession of your new Texas home!

This document is intended for general information only. Laws will change and processes can be adjusted, so always speak with a qualified professional. This article should not be considered legal, financial, or real-estate advice.

Virginia

  • Virginia uses a settlement agent who is either an attorney or a representative from a title company. This person is used to complete the purchase and prepare all closing documents.
  • When buying a home in Virginia, the buyer and seller will finalize the transaction at the same closing table.
  • Virginia has specific environmental requirements that impact inspections such as termite and wood-infestation inspections.

The Step-By-Step Process For Buying A Home In Virginia

Phase 1: Disclosures, Inspections, and the Virginia Title

Once you are in contract with a seller, these are the initial steps that need to be completed. In most cases, you can start the steps in Phase 2 at the same time.

The disclosures, inspections, and title phase usually includes:

  1. First an offer must be accepted by the seller and a contract must be signed by all parties and ratified.
  2. At the same time, a deposit, also known as earnest money, is paid to an escrow agent, attorney, or broker, but never directly to the seller.
  3. A signed contract will need to be sent to an attorney or representative from a title company, who will begin preparation of all work connected to changes of the title and preparing the title commitment.
  4. The buyer now receives a mandatory disclosure statement. This essentially states that the seller is making no promises as far as the condition of the property. Therefore, buyers should always get inspections regardless of the age or visual condition of the home.
  5. The buyer now elects to perform inspections on the home as he or she sees fit. Assuming these are agreed upon in the contract, the inspections must be completed by a certain date. The types of inspections that you choose to perform will depend on your situation and the condition of the house, but they should generally include a full inspection by a general contractor, as well as inspections for termites. Also known as a “wood-infestation inspection,” these types of inspections are common in Virginia. If more inspections are preferred, you will have to notify the seller and get an extension on the inspection period.
  6. If the property uses them, a certification of the well and septic systems will also need to be performed.
  7. Depending on the results of the inspection, the buyer may ask the seller for repairs, closing credits, or a reduction in the final sale price. The seller can then respond by agreeing or rejecting the request. The seller has a third option, which is offering a negotiated solution. The buyer can respond in kind and, if they choose, walk away from the deal without penalty. All post-inspection negotiations should be done in writing.
  8. The buyer can also negotiate a home warranty with the seller. This will cover some or all of the appliances for a certain period, usually a year.

Phase 2: Securing a Loan for Buying a Home in Virginia

Buying a home in Virginia: Luxury home with brick front at dusk.
When buying a home in Virginia, you will close the deal at the office of an attorney or title company.

Most buyers in the state of Virginia and other locations will need to borrow money in order to purchase a home. Because so much money is involved in a home purchase, the process can be extensive. But if you prepare properly, you can secure an affordable mortgage for your Virginia home.

In Virginia, the mortgage application process usually goes like this:

  1. First, you will submit a loan application to your lender. This can be done directly or through a mortgage broker.
  2. You should receive a Good Faith Estimate, of “GFE,” within three days. This is an estimate of the closing costs, although the final number can vary.
  3. Before you can make an offer to a lender (assuming you’re using a loan), you have to be pre-approved for the mortgage loan. To do so, you’ll need to bring a wide range of information, including:
    – Several months of statements from all the bank accounts you own.
    – Information from outstanding liens, lines of credit, and other financial liabilities. If you pay rent, include this information as well.
    – Two years of tax returns. Your lender will likely order this information using specific forms through the IRS.
    – Recent pay stubs and contact information from all of your employers. The number of pay stubs that your lender requests will vary, but should include both full- and part-time employment.
    – If you have recent credit inquiries, these will need to be explained.
    – Explanation of any large deposits in your accounts if they are not regular income. A large deposit may look like a personal loan to a lender, so they may request a gift letter. This letter is a basic explanation of the deposit, and should outline that the money given is a gift and not a loan, and therefore will not need to be repaid. The amount that triggers a gift letter will vary depending on your income. For example, a $10,000 gift to someone earning $35,000 a year may require a gift letter, while the same gift to someone earning $200,000 may not. If you think you may need a gift letter, tell the donor as soon as possible.
    – Finally, you may need to verify and substantiate any of the above information. To a lender, anything can happen to someone’s income, so they are as meticulous as possible when it comes to verifying information. The lender may ask for updated pay stubs, rent receipts, bank statements, and other types of financial information. If there is any significant change in these documents, the lender may reassess your loan application.
  4. The lender will now give their decisions on your loan. If you are approved, they will issue a loan commitment letter, which states their intent to fund your home purchase once specific conditions are reached. These conditions will include an appraisal so the lender can verify the value of the property. Conditions can also include specifics about material changes to your financial situation or the property.
  5. By sending a copy of the loan commitment, the financing contingency will be removed by the buyer. This contingency is defined in the contract. If the borrower is unable to get this approval before the expiration of the financing deadline, the period automatically extends. The buyer may also provide information that they were unable to get the loan and cancel the deal without penalty. The seller can also cancel the deal if they provide written notice. Buyers have three days to respond by providing the loan commitment letter, proof of their ability to buy the property outright, or information that they are walking away from the deal.
  6. An appraisal will now be ordered by the lender or mortgage broker through a central directory of appraisers. They can, if they wish, request a different appraiser than the one that was sent, but they cannot request a specific appraiser. If the appraisal comes in lower than expected, the buyer can request a deduction in the sales price before the appraisal contingency date. The seller then has time to respond by either accepting, rejecting, or offering a negotiated solution. If the seller rejects or time expires, the buyer can cancel the deal without penalty.
  7. Unless already provided by an HOA or similar organization, homeowners’ insurance will need to be ordered. You’ll need to provide proof of insurance to your lender.

While it is crucial to purchasing a home, the mortgage application process can be long, frustrating, and complicated. It’s best to start early and prepare all your documents ahead of time. If you can’t get the documents, at least research how to get them so you are prepared when the time comes. Also, avoid making changes to your financial and credit profiles during the process. It’s best to not make job changes, lease vehicles, or open new lines of credit until the process is complete.

Phase 3: Closing the Deal in Virginia

When you are buying a home in Virginia, the final closing or settlement will take place at one table, usually at the office of an attorney or title company. During this meeting, the buyer will sign all the documents related to the loan and the transaction. Once the documents are signed and payments have been exchanged, the buyer will take possession of the home!

The details of Phase 3 look like this:

  1. Part of the preparation will include a tile search by the attorney or title company. This will help find if there are any liens or assessments on the title. Assuming the title is “clear,” the closing can proceed as planned and the attorney or title company will issue a title commitment. All the paperwork for changing the title should be prepared and a final closing date is scheduled.
  2. A final cash figure is calculated. This is the amount the buyer needs to bring to the closing in the form of a cashier’s check, and it’s based on the closing costs, property taxes, and utilities that have been paid to date by the seller.
  3. A final walkthrough will usually be performed. This happens before the final closing and is used to verify the condition of the property.
  4. At the closing table or settlement table, the buyer and seller sign all the closing documents; the buyer will also sign the final loan documents.
  5. The buyer pays the remaining down-payment funds to the attorney or representative from the title company.
  6. The representative from the title company or an attorney will now record the transaction and deed with the appropriate municipality, which is generally a city but can also be a county.
  7. You will now receive your keys! Unless indicated differently in the contract, you can officially take possession of your Virginia home!

This article should be used as general information only and does not constitute legal, financial, or real-estate advice. Laws are subject to change so always talk with an attorney and/or a lending and real-estate professional before making any decisions.

Washington

  • The state of Washington has an escrow process that is similar to other areas where an escrow agent is used to complete the process.
  • During escrow, the buyer’s funds and the purchase contract are held by a neutral party. Once both parties have completed their roles, the escrow agent will release the funds.
  • When buying a home in Washington, the escrow company will notify the seller’s agent once the title has been recorded. The seller’s agent will then give the keys to the buyer or buyer’s agent.

The Step-By-Step Process For Buying A Home In Washington

Phase 1: Property Disclosures and Inspections

Once you are in contract with a seller, you’ll need to complete a variety of inspections. However, the current owner may have already offered disclosures on the property. In most cases, you can complete Phase 1 and Phase 2 at the same time.

The steps of Phase 1 generally include:

  1. The offer will first be accepted by the seller. A contract will be signed and escrow will begin.
  2. “Earnest money,” more commonly known as a deposit, will be placed with the seller’s real estate broker, representative from an escrow company, or a real-estate attorney. It must never be given directly to the seller.
  3. You will now review and sign off on any disclosures that have been provided by the seller. Disclosures are known flaws that are officially acknowledged by the seller, and can include various points such as previous improvements or repairs. It could also include potential environmental hazards. A disclosure package is usually provided by the seller in advance of placing the home up for sale. On occasion, the disclosures and defects are disclosed prior to an offer being accepted, as sellers believe that buyers will factor the disclosures into their official offer. Therefore, sellers may be reluctant to offer credits based on disclosures, as they have already been addressed and factored into the sale price.
  4. You can now elect to perform inspections if you wish. Inspections will need to be completed by a certain date, as defined in the contract. This date is called the “inspection contingency date.” Most buyers will want an inspection performed by a general contractor, as well as detailed inspections on roofs, chimneys, oil tanks, and sewer lines. When buying a home in Washington, buyers may also elect to have inspections for asbestos or lead paint, which are specialized inspections for health and safety.
  5. When the results of the inspections are finalized, the buyer can ask for repair work, a reduction in the sale price, or credits for the closing costs. The seller then has three options: they can agree to the buyer’s request, reject them entirely, or offer a negotiated solution. Once the seller responds, the buyer has a chance to make their own response. Negotiations continue until an agreement is reached, but the buyer can end the deal and recover their escrow money without penalty.
  6. The buyer now removes the inspection contingency by agreeing to a signed inspection response. If they fail to make an inspection response, they have essentially removed the inspection contingency.
Buying a home in Washington has become tougher as Seattle and the surrounding area is one of the hottest markets in the country.

Phase 2: Getting a Mortgage for Your Washington Property

While buying a home without a loan is not unheard of, the vast majority of buyers will use a mortgage to fund their purchase. The mortgage process is often the most stressful and extensive phase when buying a home in Washington, but you can improve the process by starting early.

These are the typical steps when getting a mortgage in the state of Washington:

  1. You will start by submitting a loan application to your lender, which can be done directly or through a mortgage broker.
  2. The lender will send a breakdown of the estimated closing costs, which is known as a “Good Faith Estimate” or GFE. This is a rough estimate, and the final costs will likely vary.
  3. Before you can write an offer, you will need to be pre-qualified for a loan. To complete this step, you’ll have to send numerous documents to the lender, including:
    – Several months of statements from your bank accounts. This should include all bank accounts you own.
    – Information related to current debts, including loans, liens, and lines of credit. It can also include rent payments and all other financial liabilities.
    – Tax returns for up to two years. These are released to the lender using IRS Form 4506-T.
    – Pay stubs and contact information from your employer. The amount of pay stubs will depend on the lender and the situation.
    – Any information that is important to your financial situation. This can include child support, marriage licenses, divorce settlements, bankruptcies, liens, and judgements. Essentially, if it impacts your finances, it should be included in these documents.
    – Credit inquiries are a statistical risk to lenders, so you may need to explain any recent inquiries if they appear on your credit report.
    – Explanations for any large deposits in your bank account that are not regular income, such as gifts and personal loans. If you receive a gift, you may need the donor to provide a document called a “gift letter.” Gift letters explain the gift and state that the money is not a loan, and will therefore not need to be repaid. Lenders may ask for a gift letter if the amount is significantly large compared to your income. It’s a good idea to prepare a gift letter regardless just so you are prepared.
    – You may also need to substantiate any of the information that has been provided. For example, your lender may ask for repeat or updated pay stubs. Remember that to a lender, anything can happen to a borrower’s personal finances and credit during the escrow process. Therefore, you may be asked to provide more than one document verifying the same information. Your lender may want the most recent pay stubs, bank statements, rent receipts, or other forms of information. If there are any material changes to these documents, or changes to your financial situation, the lender may need to reassess your loan.
  4. Using all the information provided, the lender will now render a decision. Assuming you are approved, they will give you are pre-approval letter, which states their intention to fund your home purchase once specific conditions are met. These conditions will include an appraisal, which helps verify the value of the home. It may also include a note that there should be no material changes in your situation. Once final approval has been completed, the loan commitment letter will be issued.
  5. In Washington, the financing contingency is different than many other states. A buyer’s financing contingency period goes on without an end date, but the buyer can waive it. The contract will state a timeframe, usually about a month, for the seller to request the buyer waive the financing contingency. If the buyer waives the contingency, it is removed as of that specific date. If the buyer does not waive it, the seller may terminate the contract after three days and the buyer recoups their escrow money. Remember that the financing contingency and its protection of the escrow money extends through the closing period as long as it isn’t waived. To use financing contingency as a means of ending a contract, the buyer will need to demonstrate that they performed their role properly, applied for the loan within a proper timeframe, and made a serious effort to obtain the loan. They will also have to show that they did not change the financing terms and the buyer must have a letter from the lender proving these points.
  6. An appraisal will then be ordered by the lender or mortgage broker. The appraiser will come from a directory, and while the lender can order a different appraiser, they are not allowed to order one of their specific choosing. If the appraisal comes in lower than the purchase price, the buyer as to deliver a Notice of Low Appraisal to the seller within three days. The seller can then lower the price, request a new appraisal, or reject the notice. If the seller rejects, the contract will be terminated and the buyer will be able to recover their money unless they specifically waive the financing contingency within three days. In that case, the buyer could agree to the purchase price and complete the financing at a lower appraised value, which will likely mean a larger down payment.
  7. If not already provided, the buyer will have to purchase homeowners’ insurance and provide proof of insurance to the lender.

The mortgage process can be long and often frustrating. However, it is an important part of the real-estate industry and if you prepare ahead of time, it will go much smoother. It’s best to gather these documents in advance. Also, do your best to avoid making changes to your financial or credit situation when your are pre-approved and searching for a home, as these changes can impact your loan and force the lender to reassess. Avoid changing jobs or taking on new credit until the buying process has been completed.

Phase 3: Closing the Deal for Your Washington Home

The closing process in Washington will take a couple of days to a week. This is different than attorney-review states. The transaction does not need to be completed with all parties at the same table at the same time, which makes the process more convenient.

The closing process in Washington generally looks like this:

  1. A title search will be ran early in the process. This will determine if there are any liens or assessments against the title of the property. If the title is clear, title insurance will be prepared and the closing will proceed as expected.
  2. You will send final loan documents to the escrow agent.
  3. You will sign all closing documents and the final loan documents. This can take place at the escrow office or at another location through a notary service. (Be sure to bring your ID to the notary appointment.)
  4. At a different appointment, the seller will sign the closing documents.
  5. The buyer now deposits the remaining funds of the down payments and closing costs. They are paid to the escrow agent through a cashier’s check or wire transfer.
  6. The escrow agent will give the signed loan documents to the lender.
  7. The lender will look over the closing documents and then wire the loan amount to the escrow agent. This generally takes one or two days.
  8. The escrow agent records the deed with the right municipality, usually a city or county.
  9. When the records come back from the municipality, the buyer will receive the keys to their new Washington property!

It’s best to plan on signing the documents a few days early if at all possible, and remember to avoid changes to your credit or financial profile until the process is complete.

This document is intended for general advice only, and should not be considered legal or financial advice. Always seek the advice of a qualified professional before making any decisions.

Maine

•   In Maine, a real estate attorney or title-company representative is used to complete the transaction.

•   The buyer and seller will complete the transaction together at the same table.

•   There are climate and environment issues unique to Maine. These issues will need to be addressed during the purchase process. For example, an older home in Maine may have a buried oil tank that needs to be decommissioned.

 

Buy a Home in Main: The Step-by-Step Process

Phase 1: Negotiations for Purchasing a Home in Maine

Once you come to an agreement on price, you’ll have to negotiate specific details. These details will often include repairs, adjustments, and updates that are discovered during the inspection process.

1.    The first step is to have an offer accepted by both parties, which will launch the contract and negotiations segment.

2.    When a price is reached, the buyer will pay the “earnest deposit,” which is essentially a payment that shows their true intention to make the purchase. In some Maine purchases, a small deposit is made first, then a larger deposit is delivered a few days afterwards.

3.    The seller will provide disclosures on the property. These are simply statements or information that the buyer should know before purchasing, and they can included necessary repairs, previous renovations, and past upgrades. A disclosure form is usually provided by the seller. This helps create a strong, trusting relationship between the buyer and seller.

4.    If the buyer chooses, they can perform inspections on the Maine property. Sometimes called “investigations,” this process helps uncover and important defects or issues with the home and must be completed within a certain period. In Maine, common inspections include a general home inspection, mold inspections, termite inspections, and more. If the home is older an inspection for lead paint or asbestos could be required.

5.    An oil-tank inspection may be needed. In Maine, as well as other east-coast states, homes were often heated with heating oil. This heating oil, which has largely been replaced by natural gas, was stored in buried tanks. These tanks, however, create significant environmental and health hazards, so having them “decommissioned” is often part of a property purchase. This can be a costly step, especially if the tank is underneath a structure such as the home or garage. Decommissioning may not be required, but the tanks create a hazard and many Maine homebuyers will want this handled before their purchase.

6.    A well test may also be needed. If the property has a well, the water will need to be tested for quality and safety. When using a mortgage, a well test is probably required.

7.    Once all testing and inspections are complete, the buyer has a certain period to request repairs, upgrades, renovations, or adjustments to the contract. They can, if inspection results were severe, walk away from the contract. Most of the time, they will request repairs and upgrades, wait for a response from the seller, and continue to negotiate until an agreement is reached.

 

Phase 2: Getting a Mortgage for Your Maine Property

Most buyers can’t afford to purchase a home outright. Instead, they will need to use a home loan, typically called a mortgage, to make the purchase. Because hundreds of thousands of dollars are involved, the mortgage will need to go through a long process for approval. While simple and straightforward, this process can be time consuming. It’s best to start as early as possible.

1.    First, the buyer will submit a loan application. This can be done through a mortgage broker, an agent, or independently.

2.    The mortgage lender will send a “Good Faith Estimate,” which usually arrives within three days. This document outlines the estimated costs for making the loan, and while it may differ from the final costs, it’s usually accurate within a couple hundred dollars.

3.    The lender will now request a variety of information and documents, including:

•   Recent Pay Stubs: For obvious reasons, the lender wants to know how much you make in a given month. Therefore, they will ask for pay stubs, which often form the foundation of a mortgage application.

•   Tax Returns: To gain a clear picture on your longterm financial situation, the lender will request tax information. This can indicate how much you have earned in the past, as well as a strong indication of what you will earn in the future.

•   Bank Statements: Lenders want to know how much you have in savings, which can influence your ability to repay the loan.

•   Debt Information: If you have high amounts of debt, it can increase your chances of loan default. Lenders want information on all your current monthly debt payments, as well as debt totals.

•   Miscellaneous Financial Information: From divorce to child support to legal settlements, anything that impacts your finances should be disclosed to the lender. This includes regular costs, such as alimony payments, as well as positive gains, such as receiving a legal settlement. Anything that impacts how much money you have on hand should be disclosed.

•   Explanation of Credit Inquiries: Frequent and rapid credit inquiries can impact your finances, so lenders will want an explanation if you have recently pulled your credit. (Beyond their credit request, of course.)

•   Information on any large deposits or cash gifts. Large gifts, such as ones that are used for downpayments, can create issues for lenders. They will need information on the deposit, including information for whether or not it is a loan that will need to be repaid. If it is an outright gift, the lender will likely request a “gift letter,” a written document signed by the gift giver that describes the nature of the gift, including the amount, their relationship to the buyer, and whether the cash is a gift or a loan.

•   Repeat Documentation: For a variety of reasons, lenders may request supporting documents or updated information on any of the above disclosures. Lenders want as much information as possible, so don’t get upset if they ask for fresh documents on your income, debt load, or financial picture in general.

4.    Once the lender has all the appropriate information, they will review the documents and issue an approval decision. Approval usually comes with conditions, including an appraisal.

5.    The appraisal will be required by the lender. If an appraisal comes in low, the lender may pull their approval decision or request changes to the loan terms. Many contracts have an appraisal clause that allows the buyer to back out from the deal if the appraisal is low.

6.    Assuming the loan is approved, the financing contingency can now be removed from the contract. 

7.    If the buyer is unable to secure financing, they will need to provide evidence of rejection to the seller within a certain period. If this information is not provided, the deal can be cut off and the seller gets to keep the deposited cash.

8.    If everything goes as planned, homeowners’ insurance will be purchased and proof of this insurance will be provided to the lender.

 

Phase 3: Closing the Maine Property Purchase

In the state of Maine, the closing process takes place at one table with buyers signing all documents at one time. After the documents are signed, the buyer can take possession of their new home!

1.    Before signing, a title search will first be completed. This simply ensures that the title is clean and the buyer can make the purchase. This should be done early so you have time to deal with any title disputes.

2.    Assuming the title is clean, an attorney or title company professional will prepare the required paperwork.

3.    A final closing date will be schedule.

4.    A cash figure for finalizing the deal will be given to the buyer. This tells the buyer how much they need to complete the transaction, and may include downpayment, fees, closing costs, and more.

5.    A final walkthrough is completed to verify the condition and quality of the home.

6.    The final closing can now occur. At the closing, all documents will be signed and finalized.

7.    The buyer will pay their remaining costs for downpayment and other fees.

8.    The transaction will be recorded with the appropriate city or county.

9.    You, the buyer, will now receive your keys, allowing you to move into your new home!

 

Loan Limits in the State of Maine

Limits for conforming loans are set by the Federal Finance Housing Agency, which determines the limits for each county in the nation. In high-cost areas, the limit can be higher, but most regions of the country fall under the base limit, which is currently $548,250 for a single-family home.

In the state of Maine, all counties fall under the base limit. From Aroostook County in the far north of the state, to York County, which borders New Hampshire and the Atlantic Ocean, the limit for a single-family property is $548,250.

It’s possible to purchase a multiunit property with a conforming loan in the state of Maine. The limit for a two-unit property is $702,000, while the limit for a three-unit is $848,500. For a four-unit property, you can make the purchase for $1,054,500.

New Mexico

•   New Mexico is an escrow state. This means oney will be deposited in escrow through the use of an escrow agent, a closing agent, or a title company.

•   Money is held in an escrow account and not released until both the buyer and seller have completed their responsibilities.

•   Once the responsibilities are complete, the escrow representative releases funds while the sales agent gives the property keys to the seller.

•   Inspections will be completed. In New Mexico, certain inspections, such as termite inspections, are recommended.

•   A typical sales contract for a New Mexico house will include a table of contents, which makes them easier to read.
 

The Step-By-Step Process For Buying A Home In New Mexico

Phase 1: Disclosures, Inspections, and Negotiations in New Mexico

Once a buyer finds a house they like, they make an offer to purchase. If that offer is accepted, it will trigger a sales process that includes disclosures, inspections, and negotiations.

1.    The buyer will make an offer and this offer will be accepted by the seller. This will kickstart the escrow process.

2.    A deposit, known as “earnest money,” is made. This deposit demonstrates the buyer’s serious intention to purchase the home.

3.    The seller will submit disclosures for the buyer to review. In New Mexico, a form known as a “Property Disclosure Statement” is provided. These disclosures outline specific flaws with the property, including potential environmental hazards. The disclosures may also include needed repairs and improvements.

4.    The buyer now has a chance to review and sign off on disclosures.

5.    In desired, the buyer can now perform inspections. For New Mexico buying contracts, there will be a delivery deadline; all inspections must be completed before this deadline.

6.    Common inspections in New Mexico include termite inspections and dry-rot inspections.

7.    The buyer can then report the findings to the seller, which must be done before the “objection deadline.”

8.    Depending on the results, buyers can walk away from the contract or negotiate with the seller to repair the problems. If an agreement is not reached by a certain deadline, the contract expires and the buyer can have their earnest money returned.

9.    On some contracts, the seller will designate a maximum dollar amount for repairs. Essentially, they are saying that regardless of inspection results, they are only willing to go so far with repair costs.
 

Phase 2: The Mortgage

A vast majority of homebuyers will use a home loan to purchase their property. In New Mexico, the process typically looks like this:

Before the Search: Pre-Qualification

Before shopping for homes and making offers, most buyers will have completed a mortgage pre-qualification or pre-approval. This not only establishes your budget, but also opens many purchase opportunities because sellers and seller agents prefer to work with buyers who have been pre-qualified.

1.    Once a house is found and an offer is accepted, the buyer will submit an official loan application. This can be done independently, but it’s usually completed with the help of a lending agent or mortgage broker.

2.    The lender will review the application and send a “good faith estimate.” This is the lender’s best estimate of closing costs, although it may vary from the final costs. (Usually, it varies only slightly.)

3.    Now the buyer will have to submit a variety of financial documents to the lender. These documents can include almost anything that confirms your financial situation, including:

•   Bank statements, dating back several months, for each account held by the borrower

•   Statements on outstanding debt, such as credit cards, car loans, and student loans

•   Tax returns for the past two years or more

•   Pay stubs or employment contract

•   Information on any financial obligations, including marriage licenses, divorces, child support, property liens, and judgements

•   Descriptions of credit inquiries

•   Information on large deposits that are not part of the borrower’s regular income. Specifically, the lender will want verification that a large one-time deposit is not a loan of some type. If a large cash gift has been given, the lender will likely request a “gift letter” that outlines the nature of the gift, the amount, and verifies it is not a loan.

•   Further information to support the provided documents. Essentially, a lender may request that you backup or verify your information with more documents. 

4.    Assuming everything check out, the lender will now give preliminary approval of the loan. This simply states their willingness to finance the purchase as long as certain conditions are met. The conditions will likely include a statement that your financial situation not change. (No new jobs, car loans, etc.)

5.    Conditions usually include a home appraisal. Appraisals, which confirm the value of the property, are important to lenders because these companies want to know that the house they are lending against is worth the investment. The agent or mortgage broker cannot request a specific appraiser, but they can reject an appointment and request a new appraiser. If the appraisal is low, the lender may pull their approval unless changes are made to the loan terms. (Such as a larger downpayment.

6.    The buyer will need to have a loan commitment or communicate to the seller that they cannot secure financing. This final contingency will need to be removed by the seller within a certain date.

7.    The lender will now submit a request for title commitment. At this point, a title company will examine the title and any findings, with the hope that the title is free and clear and can be sold without issue. Title insurance is usually arranged at this point

8.    The buyer will now arrange for homeowner’s insurance and proof of this purchase must be delivered to the lender.

9.    Hazard insurance may also be requested. This can include flood insurance and special storm insurance for certain sections of New Mexico.

 

Phase 3: Finalizing the New Mexico Home Purchase

The process for finalizing a deal in New Mexico is usually fast, generally lasting a couple of days to a week. While some states require both the buyer and seller to be present during the closing, this is not the case in New Mexico.

1.    First, the lender will send final loan documents to the escrow agent

2.    A final settlement date is scheduled

3.    A settlement will occur at the office of the escrow agent or closing agent. It could also be at the title company’s office

4.    The seller traditionally signs all documents first

5.    The buyer will then sign all closing documents, including the loan documents

6.    The buyer will now write a check for the remaining funds and closing. This check will be given to the escrow agent, closing agent, or the title company. To speed the process, this step can be completed in advance.

7.    The deed, with a new owner, is recorded with the appropriate city or county

8.    The buyer is given the keys and can move into their new home!

 

Loan Limits in New Mexico

The maximum loan amounts for conforming loans in New Mexico are determined by the Federal Housing Finance Agency, which calculates limits on a county-by-county basis. Using a a formula that includes home prices in the county, these limits are used for a variety of loans, including loans supported by the federal government.

The FHFA sets a base limit, which is the lowest maximum amount for a county. In high priced areas, however, this maximum amount can be increased.

At the time of this article, the entire state of New Mexico falls under the base limits for the country. This means that for all single-family homes, from Hidalgo County in the far southwest corner to Union County, which borders Texas, Oklahoma, and Colorado, the max amount for a single-unit house in New Mexico is $548,250.

The FHFA also sets limits for multi-unit housing. In New Mexico, the limit for a two-unit property is $702,000, while three-unit properties can use conforming loans up to $848,500. If you want to purchase a four-unit property, the maximum loan amount is $1,054,500.

It should be noted that these amount are not guaranteed, as borrowers still need to qualify. Despite the determined limits, some borrowers will only qualify for lower amounts. Also, if you need more than the loan limits, there are plenty of options for New Mexico homebuyers, including jumbo loans.

 

Note: This document is a general guide on the buying process in New Mexico and should not be taken as financial, legal, or real estate advice. Laws and processes are constantly changing, so speak with an expert for updated information.

Oregon

•   Oregon is an escrow state, so the process is similar to many other states.

•   You’ll need the help of an escrow agent, a closing agent, and a title company.

•   The contract, as well as cash from the buyer, is held in escrow by a neutral party. It’s held until an escrow agent checks that both the buyer and seller have completed their duties.

•   The escrow agent then prepares a new title.

•   Within a short period (usually less than a week), all documents are signed and the payments are completed.

•   The escrow company then releases funds and the purchase is complete!

The Step-By-Step Process For Buying A Home In Oregon

Phase 1: Inspections and Negotiations

During this phase, the buyer and seller will come to terms on the purchase contract, including any repairs or upgrades to the property. This phase is often completed at the same time as Phase 2.

1.    First, an offer is accepted by the seller and a contract is signed by both the buyer and seller.

2.    The escrow process starts.

3.    Earnest money from the buyer is deposited to the seller’s agent, an escrow agent, or an attorney overseeing the contract. This money is never released directly to the seller.

4.    The seller submits disclosures to the buyer. These are attached as an addendum to the purchase contract, and will describe various flaws with the property, needed improvements, or necessary repairs. If needed, the disclosures will include potential environmental hazards. In Oregon, the disclosure documents must be signed by both the seller and the buyer.

5.    Once the contract is signed, buyers have a certain number of days to complete inspections and communicate any problems. In Oregon, buyers will likely want to complete numerous inspections, including an initial inspection and a termite inspection. A property survey may also be recommended and buyers can also request a lead inspection. They must be completed within the given time.

6.    If there are no issues, the sales contract can move forward. However, if issues are found during the inspections, buyers can report these issues and take one of two measures:

•   First, they can cancel the sales contract.

•   Second, they can request that the current owner remedy the situation.

The seller can then agree to the requests, negotiate a modification, or decline to make any further changes. In turn, the buyer can accept the response, make another change, or walk away from the purchase.

7.    If desired, an Oregon homeowner can request a home warranty, which is usually funded by the seller. This may not be granted, but a home warranty can cover expenses for major appliances and other costs for a specific term, usually about 12 months.

 

Phase 2: Securing the Mortgage

When you are ready to make the purchase, you’ll need to secure financing. This is the process for finalizing a mortgage in the state of Oregon…

•   Step Zero: Mortgage Pre-Qualification or Pre-Approval
Mortgage pre-qualification or pre-approval is an important first step, allowing you to understand your budget and how much house you can purchase. It also demonstrates your ability to make a purchase, creating access to more houses. Although final approval is needed, this step is usually completed before you search for a home in Oregon.

1.    The first step after having an offer accepted is to submit a mortgage application, which can be done independently or through a mortgage professional like a broker or loan officer. For Oregon contracts, there will be language stating the number of days a buyer has to file their official mortgage application. (In other words, once an offer is accepted, buyers can’t delay for a month before making the application.)

2.    The lending organization will then send a “good faith estimate.” This is essentially a review of the estimated closing costs. Lenders make them as accurate as possible, but there is usually a small difference between this document and the final numbers.

3.    The lender will then send a request to the title company. This request initiates the title company to conduct a search and, in many cases, a property survey. Title insurance may also be organized and agreed to during this step. The buyers then have a certain timeframe to object to anything found in the title search.

4.    The buyer then submits personal finance disclosures to the lender. The lender can request a wide range of documents, but common requests include:

 

•   Bank statements, including any and all accounts owned by the borrower

•   Information on outstanding loans, lines of credit, consumer debts, car loans, and all other debt obligations. This is essential to calculating your debt ratios.

•   Tax returns for the past two years. In certain situations, more documents may be requested.

•   Any information related to your financial situation. This can include divorce settlements, alimony, child support, legal decisions, and liens.

•   Written explanation of credit issues, such as bankruptcies, foreclosures, property seizures, or missed payments.

•   Information on any large deposits or cash gifts that are not regular income. Lenders need this information because a cash gift will appear the same as a personal loan, and they want to know if the cash will need to be repaid, as this impacts your financial picture.

•   The lender may also request repeated or verifying information related to any of the above documents. Remember, a lending agent or broker needs as much information as possible; the more you can provide, the more likely you will be to get an excellent loan for your Oregon home purchase.

5.    Once these documents have been provided, the lender will submit a preliminary decision.

6.    If appropriate, they will also issue preliminary approval, stating their willingness to fund the home purchase in Oregon. There may be conditions, including a home appraisal to verify the value of the property.

7.    For most Oregon contracts, there is a requirement that the buyer complete their loan application within a certain number of days. Pay attention to this detail, as it will vary from contract to contract. 

8.    An appraisal is now done on the home. An appraisal, which verifies the home value, is ordered by the mortgage professional, but they cannot ask for a specific appraiser. If the appraisal is low, the lender may decline to fund the purchase. If this happens, a buyer has options. For example,  they could increase their downpayment. In Oregon, it’s common for the contract to have wording that requires the property to be valued at or above the purchase price.

9.    At this point, homeowner’s insurance is purchased and proof of the purchase is submitted to the lender.

10.  If needed, hazard insurance, such as flood insurance or additional storm insurance, may be requested.

Phase 2 can be long and complicated so it’s essential that you start the process as soon as possible.
 

Phase 3:  Closing the Purchase Deal in Oregon

Oregon is an escrow state. Therefore, the closing process usually follows these basic steps:

1.    First, the lending official will send documents to the escrow agent or professional who is handling escrow. A final settlement date is then scheduled.

2.    Before closing, a final walkthrough of the property is completed. This ensures the property has not suffered damage since the initial showing.

3.    The settlement will then occur at the office of an escrow agent, closing agent, or the title company. In most cases, the seller signs everything first.

4.    Next, the buyer will sign all the appropriate documents.

5.    The buyer then pays for their downpayment and other costs. This payment can be through a wire transfer or a check. If everything is ready, this step can be completed in advance.

6.    Now the deed will be ordered and recorded with the appropriate government office, such as the county or city. At this point, the agent can release funds held in escrow.

7.    The deal is closed and the Oregon homebuyer can go on to enjoy their new home!

 

Loan Limits in the State of Oregon

Loan limits for conforming loans are set by the Federal Housing and Finance Agency (FHFA), which uses a specific system to determine the maximum conforming amount on a county-by-county basis. Under this systems, loans for houses in high-cost areas can be higher than other regions of the county.

As you’ll see from the comforming loan limits map, the limits for all counties in the state of Oregon are in the “base limit,” which, as of summer 2021, was $548,250. From Clatsop County in the northwest section of the state to Malheur County, which borders Nevada and Idaho, the state is entirely within the base limits for the entire country.

For a two-unit properties, the limit is $702,000 across the state, while three-unit properties have a limit of $848,500. If you want a four-unit property, the conforming-loan limit for the entire state of Oregon is $1,054,500.

These are merely the limits for conforming loans. Larger financing may be available through the use of jumbo loans in the state of Oregon.

 

Note: Information in this article is intended for general information only and should not be considered real estate or mortgage advice. Laws that govern real estate are always changing, so talk with a qualified mortgage professional and real estate agent for current and reliable information.

Pennsylvania

•   In Pennsylvania, the law allows real estate closings to be completed by a closing agent, who can be an attorney or an official from a title company.

•   These people prepare the needed documents and complete the transaction at a specific closing date.

•   The buyer and the seller generally close the transaction at the same time. Both parties are usually present at the closing table.

•   There are features to Pennsylvania’s climate and environment that may require unique inspections or home insurance.

The Step-By-Step Process For Buying A Home In Pennsylvania

Phase 1: Negotiating Repairs and Updates

Once you are in contract with a seller to purchase a Pennsylvania home, there is a phase of inspections and negotiations to determine what repairs and upgrades should be made before selling.

1.    After a purchase contract is signed, a round of negotiations will occur. This may include negotiating a home warranty, which could pay for major appliances repair or replacement for a given period, such as two months.

2.    Earnest money, which is used to demonstrate the buyer’s serious intention, is deposited into an escrow account. This is paid to an escrow agent or representative and may be given to the seller if the buyer backs out. However, if the buyer backs out for legitimate reasons (inspection results, for example), they may have the money returned.

3.    The seller will also provide disclosures. These are simply known issues with the home, as well as past repairs and upgrades. It can also include potential environmental hazards. The disclosure form is usually provided as an addition to the contract, and the law in Pennsylvania says it must be signed by both the buyer and seller.

4.    Although the deal is far from final, an attorney or title professional will begin the process for transferring and changing the title.

5.    Assuming it’s agreed to in the contract, inspections will begin. (Most contracts allow for inspections.) The contract will designate a specific date for completing these inspections. A home inspector will complete their work, then other, more specific inspections can occur. In some contracts, there is additional time for special inspections, such as termite inspections.

6.    The inspection results are crucial. At this time, the buyer can request a reduction in sales price or ask the seller to repair any issues. The seller can agree to the request or respond with their own offer. Negotiations continue until an agreement is reached. If an agreement can’t be reached, the buyer may be able to walk away from the deal and recoup their earnest money.

 

Phase 2: The Mortgage

Most buyers in Pennsylvania and the United States will need a home loan, called a “mortgage” to make their purchase. This phase can take a while, so it’s best to start early. In almost all cases, you can complete Phase 2 (the mortgage) at the same time as Phase 1 (negotiations).

1.    Once a purchase price is reached, the buyer will send their loan application. This can be done independently, although most people will prefer to use a lending agent or broker.

2.    The borrower will receive a “good faith estimate” from the lender. This is simply an estimate of the cost to close the deal. Final costs may be different, but it is usually fairly accurate.

3.    To finalize the loan, the lender will need a variety of documents that verify the borrower’s financial outlook. These may include:

•   Pay stubs: This will verify your income. The lender may also request employer contact information to support various information.

•   Tax returns: Tax returns usually give an accurate description of your annual income and can form the basis for your mortgage application.

•   Bank statements: This helps verify cash holdings and other financial information, as well as income and outgoing expenses.

•   Loan documents: Any information on your current debt load will be requested. This can include car loans, student loans, credit cards, and consumer debts.

•   Financial disclosures: Anything that impacts your financial situation should be included. This could mean child support, divorce decrees, alimony, legal judgements, and property liens.

•   Explanation on any credit inquiries. (Lenders want to know you are not taking out new lines of credit.)

•   Information on any large deposits. If there is a large deposit in your account that is not part of your regular income, be prepared to document this cash.

•   Gift letters: If there is a large deposit that came as a gift from a friend or family member, be prepared to document this gift. Lenders may request a gift letter that highlights the nature of the deposit and officially states that the money does not need to be repaid.

•   The lender may also request information that verifies these documents. Essentially, they want as much information and documentation as possible, so don’t be surprised if they ask for repeat or verifying information on income, debts, and past credit issues.

4.    Using this information, the lender will create an approval decision. Once approved, you will receive a commitment letter, which officially states their intention to finance your home purchase.

5.    The commitment letter may come with provisions, including an appraisal requirement.

6.    An appraisal will be requested and, assuming it’s not too low, the loan can move forward. However, if the appraisal is low, the lender may pull their loan approval.

7.    If the appraisal is low, the lender can pull their offer or they can request a change in the terms. A larger downpayment may be needed. Also, low appraisals could allow the buyer to pull their offer without penalty.

8.    The “mortgage contingency” is removed from the contract and a copy is sent to the seller or seller’s agent, letting them know that the loan is proceeding as planned.

9.    Homeowner’s insurance in ordered by the borrower. This is almost always required by the lender.

Remember, this process is long and includes many different steps. For this reason, it’s best to start early and prepare all of the documents well before you finalize a contact agreement. You should also avoid new debts at this time, as it can harm your chances of mortgage approval.
 

Phase 3: Final Closing

1.    At some point in the process (usually after the contract is signed), a title search will be completed by the attorney overseeing the transaction. This will determine if there are any liens or title disputes. Assuming the title is clear, the closing can continue as planned with a title commitment.

2.    All of the paperwork for finalizing the transaction will need to be completed.

3.    A date is set for final closing.

4.    For most transactions, a final walkthrough will be completed. This is to ensure that the property is still in good condition.

5.    Final loan documents can now be signed at the closing.

6.    The buyer will pay the final downpayment for the purchase. This will go to the attorney or title representative who is overseeing the transaction.

7.    The transaction will be recorded with the city or county where the property is located.

8.    Now the buyer gets their keys and can move into their new home!
 

Loan Limits in Pennsylvania

Loan limits for a variety of different mortgage products are set by the FHFA. These limits are determined on a county-by-county basis, taking into account the median home prices in each area.

In all areas, there is a base loan limit. However, in certain areas with higher home prices, this base limit can be increased, allowing the purchase of more expensive homes while still using government-backed conforming loans.

Currently, the base limit for a single-family home is $548,250. In Pennsylvania, this is the limit for the entire state except for Pike County. In this county, on the far eastern end of the state bordering New York and New Jersey, the limit for single family homes has been lifted to $822,375.

There are also conforming loans for properties up to four units. For most of the state, conforming loan limits for a two-unit property is $702,000, while a three-unit property comes with a limit of $848,500. A four-unit property can use a conforming loan up to $1,054,500.

In Pike County, these limits are also increased. A two-unit property in this county comes with a loan limit of $1,053,000. For three-unit properties, the limit is $1,272,750, and four-unit properties in Pike County have a loan limit of $1,581,750.

 

Note: This article is for general information and research only, and should not be taken as legal, financial, or real estate advice. Pennsylvania law, as well as federal law, is constantly changing so always talk with a qualified professional to ensure you have the best information available.

South Carolina

•   In South Carolina, the law states that all real estate transactions must be completed by an attorney.

•   The process uses a “settlement agent” to prepare documents and complete the purchase.

•   This agent is usually an attorney, although representatives from a title company can be used in certain purchases.  

•   The buyer and seller usually needs to be present for the final closing.

•   Certain inspections are common in South Carolina. These may include termite and special mold inspections.

The Step-by-Step Process for Buying a Home in South Carolina

Phase 1: Disclosures and Negotiations

Step Zero: Pre-Qualification and Finding Your Next Home

Before you can launch the purchase process, you need to find a home, make an offer, and have that offer accepted. Before all of that, you need to be pre-qualified. This is an important initial step that will help establish your budget and provide access to homes currently on the market.

1.    Once you have found a home, you will have to have an offer accepted by the seller.

2.    At the same time, a deposit will need to be made. This is called “earnest money,” and it’s essentially cash, held in escrow, the demonstrates your serious intention to make the purchase. This is paid to the escrow agent or attorney and never to the seller.

3.    A signed contract will be sent to the attorney, who will begin preparation of all documents that help transfer and change the title to the new owners. A title commitment will also be prepared at this time. 

4.    The seller will need to submit disclosures. These are statements of flaws and known issues with the home. They will likely include repairs and past improvements. Sellers will often use a document called the residential property condition disclosure statement.

5.    The buyer will need to review and sign off on these disclosures or adjust their offer as needed.

6.    The buyer now has the chance to conduct inspections on the home. These must be completed within a certain date (outlined in the contract) and the buyer then has a certain timeframe to report the findings to the seller.

7.    In South Carolina, a wood infestation inspection is recommended. Because of South Carolina’s environment, a Wood Infestation Report may be required by lenders.

8.    A lead-based paint inspection may also be requested.

9.    Once all inspections are completed, the buyer can adjust their offer to purchase or request that any issues are repaired. They may also be able to walk away from the deal without penalty. In turn, the seller has an opportunity to repair the problems or make a counter offer. This process continues until a deal is reached or the buyer decides to pull their offer. 

10.  Once the deal has been reached, the buyer and seller will plan a closing date.
 

Phase 2: Securing the Mortgage

Most homebuyers in the United States, including the majority of buyers in South Carolina, will use a home loan to make the purchase. The process for securing these loans can seem complicated, and there are many steps, so it’s important that you start early. In fact, Phase 2 can be started at the same time as Phase 1.

1.    The first step for getting a mortgage is to file an application. This can be done independently, but most will use a loan officer or mortgage broker to complete the application.

2.    In South Carolina, the lender will send a “good faith estimate” to the buyer. This is an estimate of the total closing costs, and while it’s as accurate as possible, there may be slight differences between this and the final document.

3.    The lender will need to verify your financial information. Although much of this has been done during pre-qualification, the lender may request a variety of documents, including:

•   Financial information: Can include pay stubs, contract information, and other income documents.

•   Bank statements: Usually with at least two months of information

•   Tax returns: In most cases, lenders will request about two years of tax documents.

•   Disclosures that impact your financial situation: These include alimony and child support (that you pay or receive), bankruptcies, legal judgements (for or against), and inheritances.

•   Brief explanation of credit inquiries. (Lenders want to know you are not taking out more loans.)

•   Information on large cash deposits that are not part of your regular income. (Large gifts and personal loans from friends and family need to be documented.)

•   If there is a large cash gift, a “gift letter” will need to be provided. This will outline the size of the gift and verify that it is not a loan and will not need to be repaid.

•   Documents that support any of the above information. Lenders want to have all information verified as thoroughly as possible, so they may request documents that verify your income, debt ratio, or other factors.

4.    The lender will make an approval decision and, assuming you are approved, create a loan-commitment letter. This will state their willingness to support your home purchase in South Carolina. However, certain conditions will need to be met before final approval, including an appraisal.

5.    The bank or lender will request an appraisal on the South Carolina home to verify its market value. If the appraisal comes in low, the buyer can break from the agreement or the bank can pull their offer to fund the purchase. This situation is rare (but not unheard of) and negotiations and other measures are usually used to overcome the low-appraisal issue.

6.    Loan contingency will be removed by the buyer. This needs to be done before a certain date so it’s essential that you begin the mortgage process as quickly as possible.

7.    Before closing, homeowner’s insurance will need to be ordered. In South Carolina, additional insurance may be required. Depending on the location of your home, this can include flood insurance and hurricane insurance.
 

Phase 3: Closing the Deal

In South Carolina, the closing meeting will take place at one table with the buyer and seller present at the same time. The buyers will sign all documents related to the loan and the purchase and take possession of the keys to the property. The deed will also be recorded and the buyer can move into their new home. However, there are a few steps to complete before finalizing the purchase.

1.    Before the final settlement meeting, the attorney or title company will perform a title search. This will determine whether or not liens exist on the property and if there are any ownership disputes.

2.    All paperwork for changing the title will be completed and title insurance may be prepared.

3.    A final walkthrough will be done before the meeting. This is to check that the property has not been damaged since last viewing.

4.    When the closing begins, the buyer and seller will sign all related documents.

5.    The buyer will make the final payment to the attorney overseeing the process.

6.    The attorney or representative will record the transaction with the city or county.

7.    You’ll receive the keys and move into your new home!

 

Lending Limits in South Carolina

Loan limits for the entire country are set by the Federal Housing Finance Agency. However, the limits change on a county-by-county basis. Counties with high property prices have larger loan limits to ensure buyers in that area can make the purchase.

In South Carolina, however, the entire state falls within the base limits. From Oconee County in the far northwest corner, down to the Atlantic coast from Jasper up to Horry counties, the limit for single-family homes is $548,250.

Many government offices support the purchase of multi-unit properties. These properties also have conforming loan limits. For a duplex, the limit is $702,000, while a three-unit property in the state of South Carolina has a loan limit of $848,500. Four-unit properties (which are the most you can buy with a conforming loan) has loan limits of $1,054,500.

If you need financing above these limits, there are options available, including jumbo loans for South Carolina properties.

 

Note: This article is for general information only and should not be taken as legal, financial, or real estate advice. Always speak with a qualified professional before making any decision.

Tennessee

•   In the state of Tennessee, a real estate attorney or representative from a title agency will be needed to close the transaction.

•   The buyer and seller will join together to complete the transaction at the same table.

•   Certain inspections are common in Tennessee, including termite inspections.

•   Most of Tennessee is under the base loan limits. However, counties surrounding the Nashville area have higher limits.

The Step-By-Step Process For Buying A Home In Oregon

Phase 1: Negotiating Terms of the Purchase

Once you have found a Tennessee home and agreed on a price, you may think that the deal is final. However, there are more details that need to be worked out, including disclosures, inspections, and repairs.

1.    Once the offer is accepted by the seller, a contract will be signed. This document will legally bind both the buyer and the seller, and will outline numerous details, including deadlines for many tasks, such as completing the finance application.

2.    Earnest money from the buyer will be deposited in an escrow account. This deposit is never given directly to the seller.

3.    A title search will begin and all work related to transferring the title can start. This should be done early in case there are title issues that need to be addressed.

4.    The buyer can review all disclosures from the seller. Disclosures help the buyer understand potential issues with the home, as well as past repairs that were completed.

5.    Inspections should be completed at this time. The contract will have a deadline for all inspections, which can include a general inspection as well as specific inspections. Inspections may include termite and mold inspections. In Tennessee, cosmetic and purely visual defects are not considered during inspections, only structural and safety issues can be considered.

6.    The outcome of inspections will define the next step. Depending on the results, the buyer can request changes, repairs, or an adjustment to the contract. The seller can respond in kind until an agreement is reached.

7.    A home warranty can be requested by the buyer. This warranty will cover the cost of appliance repairs or replacement for a certain period. The warranty is part of typical home-buying negotiations and does not have to be accepted by the seller.

 

Phase 2: The Loan

Most buyers will need a loan to make the purchase. This process can be long and detailed, so it’s best to start early. In most situations, you can begin Phase 1 and Phase 2 at nearly the same time.

Step Zero: In most cases, the buyer of the Tennessee property will already have pre-qualification or pre-approval before home shopping. Final approval, however, is more detailed.

1.    The buyer will first submit a loan application, which can be done independently but often uses a loan broker or mortgage agent.

2.    The lender will send a “Good Faith Estimate,” which is their best calculation of the closing costs. Final costs can differ, but they make the best effort to be accurate.

3.    Now the buyer will need to send a series of documents to verify their financial situation. Requested documents may include:

•   Bank statements for the past several months

•   Information on outstanding loans

•   Two years of tax returns (Certain IRS forms may be needed to release the documents.)

•   Employment information, including pay stubs and employer contact information

•   Information that is important to your financial situation. This can include divorce settlements, child support, liens, and legal judgements. (It should include payments you make, as well as those you receive.)

•   Information on large deposits. If you are using a cash gift for your downpayment, you will need to document the gift and provide information to the lender, including a statement that it is not a loan and will not need to be repaid.

•   Repeat information on any of the above documents. Remember that a lender wants as much information as possible. The more documents you can provide, the better your chances of reaching loan approval.

4.    Once all documents are collected, the lender will issue a decision.

5.    Assuming you are approved, the lender will provide a loan commitment letter. This essentially outlines their intention to support your home purchase in the state of Tennessee.  There will likely be conditions, including appraisal results. Conditions can also include that there is no change to your financial situation. (Meaning no new jobs, debts, or other financial changes.)

6.    The final contingency can now be removed. If the buyer is unable to get a loan for the purchase, the seller can terminate the contract and the buyer will have their deposit returned.

7.    An appraisal will be completed by a professional expert. This appraisal is important to lenders, as they want to know that the home they are lending against has the appropriate value. If the appraisal is low, the lender may pull their loan offer or request changes to the loan terms.

8.    At this time, homeowner’s insurance will need to be ordered. Proof of this insurance should be provided to the lender.

 

Phase 3: Closing the Purchase in Tennessee

In Tennessee, the closing will take place at one table with all parties present at the same time. This usually happens at the office of the lender, attorney, or title company. Once all documents are signed, the buyer will receive the keys to their new home!

1.    A title search will need to be completed before final closing. This ensures that the title is clear and the seller has legal ownership and can therefore sell the property without complications.

2.    If the title is clear, the closing can proceed as planned. Paperwork for changing the title and title insurance will be prepared.

3.    A final cash total for the closing is prepared. This is based on many factors, including the downpayment, closing costs, agent fees, and more.

4.    A final inspection of the property will need to be completed. This inspection will ensure that the property is still in good condition and has not been damaged since it was last seen by the buyer.

5.    At the closing, both the buyer and the seller will sign all the appropriate documents. The buyer will also sign final loan documents.

6.    The buyer will pay their remaining funds to the title company representative or the attorney overseeing the transaction.

7.    The transaction will then be recorded with the appropriate government, either a city or county government.

8.    The buyer now gets their keys and can move into their new home!

 

Loan Limits in the State of Tennessee

Across the country, limits for conforming loans are determined by the Federal Housing Finance Agency. (FHFA, not to be confused with the FHA.) The limits are set by the county, with most counties falling under the base limits. However, high-cost areas can have larger loan limits.

In Tennessee, most of the state falls under the base limit, which is currently $548,250 for a single-family home. For a duplex, the limit is $702,000, and for a three-unit property, the limit is $848,500. If you want to purchase a four-unit property in Tennessee, the limit for most of the state is $1,054,500.

However, in the counties that make up the Nashville metro area and the surrounding region the loan limit is lifted to reflect higher costs.

Tennessee counties with higher limits include:

•   Cannon

•   Cheatham

•   Dickson

•   Davidson

•   Macon

•   Maury

•   Robertson

•   Rutherford

•   Smith

•   Sumner

•   Trousdale

•   Williamson

•   Wilson

In these counties, the limit for a single-family home is lifted to $586,500, while two-unit properties have a limit of $750,800. If you are purchasing a three-unit property, the limit is $907,550, while four-unit properties have a limit of $1,127,900.

It should be remembered that these are limits for conforming loans only. If you need financing above these amounts for your Tennessee home purchase, there are options available, including jumbo loans.