“How do I buy a house?” is one of the most-asked questions that I get. I thought it would help to take my readers through a first-time home buyer’s transaction from start to finish. Here we go!
Part 1: My clients navigated financing and made an offer on a home they love on the Northeast side of Indy after a thorough second showing, carefully crafting the terms and deciding what fixtures and requirements to include in the offer. That included all of us sloshing through a rain-soaked yard measuring the distance between the septic tank and the well in order to make sure we were in compliance with FHA lending requirements! The offer was accepted after minimal negotiation. My clients delivered the escrow money to the seller’s agent’s office.
I teach my clients to focus on 3S: Safety, structure, and sanitation. This makes the inspection more of an educational activity, especially for first-time buyers and ESPECIALLY if they work with responsible inspectors. They learn what red flags to look for in the future and what items are important to address right away. I am always with my buyers at inspections so that I can learn along with them and get the information I need to lead them toward the proper inspection response, which is the buyers’ requests for repair and remediation after the purchase agreement is signed. We are crafting the inspection response now pending the results of the water quality test!
Part 3: We negotiated the repair of a few items in the house. The sellers agreed to fix some things and declined to fix others. It is a give and take process and both parties were fair and cordial. That always makes the process easier.
My buyers found a great insurance company and have officially applied for their loan. They chose a local lender who knows the area and will be available to both them and me for updates, questions, and concerns.
Part 4: The appraisal went well. The independent appraiser for FHA determined that the house is worth as much or more than the loan that my clients are taking out. If the appraisal had come in low, we would have had several options. We could appeal the appraisal with proof of other homes in the area with similar features that sold for the higher price OR we could have negotiated with the seller to lower the price to meet the appraiser’s valuation. You can’t get a mortgage for more than the house is worth.
Part 5: The buyers’ mortgage has made it through all of the twists and turns of approval and we got a “Clear to Close” notice. That means that we just need to review the closing disclosure to make sure all of the numbers are correct. They are, so we are ready to close!
Part 6: We just closed on the house. My clients brought their IDs and a certified check to the title company for their down payment and closing costs. They signed their names on tons of forms and at the end, I was able to hand them the keys to their first home. I’m so happy for them!