By keeping first time home buyers informed about what to expect in their real estate transaction, The Mountain Living Team helps to keep the stress out of their home buying experience. If you’re wondering what you can expect when buying your first home, you’ve come to the right place. Here’s an overview of how the process works. Many more specific questions will be answered in our Buyer Frequently Asked Questions. You can always contact us for more information. We’re happy to help!
The first step
One of your first priorities is to talk to a local lender. Determine the best way for you to purchase your first home and how much you can comfortably afford to pay. With the help of your agent you will find the property you want to purchase. Then you need to talk price. Not just the price you are willing to pay for the house but the amount of earnest money to put down as well. Your agent can supply you with information like comparable properties that have sold recently and a market overview so you can make a good decision on the price to pay. Your agent will prepare the offer and submit it to the listing agent. The seller can either accept the offer, reject the offer or prepare a counter offer. If the offer is accepted your earnest money will be deposited. If the offer is countered, your agent will work to negotiate a favorable outcome for you. If all parties can come to an agreement, you are under contract!
Under contract!
Once you are under contract you will receive several documents regarding the property. You will receive disclosures from the seller disclosing any physical defects of the property that they know of and the source of the square footage measurements . You will receive information about any documents that have been recorded on the property including easements and liens and any documents that may hinder the sale of the property. If the property belongs to a home owners association you will receive the bylaws and financial statement for that association. If any of these documents are unsatisfactory to you, you have the opportunity to terminate the contract and have your earnest money returned to you.
You have the option to inspect the property before you buy it. We always recommend having a property inspection. They help protect you by letting you know what you are getting into. Some inspections worth considering are a general property inspection, radon testing, lead base paint, well and septic inspections, and mold inspections. Any inspections must be paid for by you at the time of service. All of these inspections may not be necessary for your particular property. Once the inspection(s) have been completed you have the opportunity to ask the seller to correct issues or problems that have been brought to your attention. The seller is not required to do anything additional and you, once again, have the opportunity to terminate the contract and have your earnest money returned to you.
If you are financing your purchase your lender will probably order an appraisal on your behalf. By this time you should have received a Good Faith Estimate from your lender informing you of the amount of charges you will be incurring to get your loan and if any of those charges are due prior to closing. If the terms of your loan are not favorable you can try other lenders and if you are unable to secure a favorable loan you can terminate the contract and, if it is before the deadline, you can have your earnest money returned to you.
A couple of other things to consider; appraisal and insurance. You may want to get an appraisal even if you are paying cash for your new property. Talk to an insurance company and find out how much your homeowner’s insurance will cost for this property. You don’t want to find out after closing that this home location requires a very expensive policy.
Closing!
Closing day is here! Once all the documents are signed and the money has changed hands the property is yours! In a typical transaction closing will take place approximately 45 days after going under contract but it is flexible and agreed to in the contract.
This overview assumes your real estate transaction is handled on the Colorado Real Estate Commission approved forms. These forms may not always be used and therefore the overview of the process may be slightly different and your option to terminate the contract and get your earnest money back may not be an option.
This is just a brief overview designed for first time home buyers. It does not go deep into the process so if you have more questions, just ask.
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