You've finally made that big decision to purchase a new home. Now what? The first step is to go to the lender (bank or mortgage company) of your choice and get pre-approved. Pre-approval is usually based on your income and debt ratio, at this time they usually don't do a credit check (why it is called pre-approval). They will then explain to you what you can afford, the programs available to you, and also an estimate of what to expect for closing costs. Some may even give you a letter stating what you are pre-approved for to take with you to the Real Estate Agency or home owner (if it is for sale by owner).
The next step is to find a home! The best place to go for that is a Real Estate Agency such as Harris Real Estate on the Wilton Road (Rts. 2 & 4) in Farmington. You will be assigned a Realtor to work with or you may choose one (depending on the agency). You will also choose to be a client or a customer. A client may receive counsel from their Realtor and the Realtor represents (negotiates on behalf of) the client in the transaction, this agreement now must be in writing (new Maine law).. A customer uses the Realtor as a transaction broker to show them the property and help with the paperwork but receives no counsel from the Realtor in the transaction. This is your choice and is usually free of cost unless rare circumstances warrant otherwise (i.e. buying from a for sale by owner). The Realtor will then go to work locating properties which meet your criteria and setting up showings of these properties.
Once you have found a home, (or other type of property), which you would like to make an offer on, you will sit down with your Realtor and write up an offer to purchase. In the offer you will state the price you are offering, the financing you wish to aquire, the inspections and tests you would like done on the property, and any other conditions which apply to the offer (called contigencies). These can include such things as your home must sell first, the sellers must service the septic (is it a good idea to include this unless it has been done within the last year which it should state on the disclosure), or the roof must be replaced. Generally the less contingencies you have, the better the offer looks to the sellers. You will also be required to give an earnest money deposit which shows the seller that you are serious about purchasing their property. In most cases, if the deal should fall through, your money will be returned to you. The average deposit ranges from $500 to $1000 and must be deposited in a special account (the agency holds this account and must abide by strick commission regulations) within 3 days of acceptance of your offer. The sellers may choose to counter your offer with one of their own and the ball is then in your court on whether to accept their offer or counter again with another offer. This is where your Realtor can be of the most help in advising you on your options and negotiating strategy. Once you agree on a price, the seller will sign the offer and it becomes a contract of sale.
This is when you take your copy of the signed contract to your lender to be approved for the loan. You will apply for the loan and if you are approved, the sale will progress. The lender will then have any inspections they need done and have the property appraised, at this time you will also have the inspections and tests done which you required in your offer. Based on whether everything meets approval you can then move forward to a closing date. This all can take between 1 and 3 months to complete sometimes more or less depending on if any problems arise.
Closing- At closing you will be required to sign a lot of paperwork!! You will also need a check for closing costs and any down payment you are making (depending on the loan program you are going through). You will be given this figure in advance and the check must be a bank certified check. Once all paperwork is signed and money exchanged, the property is yours! Congradulations, you are a new home owner!
This process also applies to land transactions but with a few variences and different inspections! Commerical transactions may be different in several ways and can not accurately be detailed here, your best bet is to call Harris Real Estate for information on Commercial Property and your lender for information on loan programs. |
