First-Time Homebuyer Process in North Carolina
The first step in purchasing your own home is finding out how much you can afford to pay for it. To do this, get pre-qualified by a professional lender so you can look at homes you can purchase. If you have enough cash for your home, you do not need a lender.
If purchasing with a lender, you must ensure you have enough for all closing costs including, downpayment, attorney fees, inspection, due diligence and earnest money costs.
If you can’t get pre-qualified, or don’t have enough cash.. you are currently not in a position to purchase a home. At this point you must improve your credit and/or income to get pre-qualified.
Once you have a verified amount you are able to spend on your home, determine how much house you need, and where you want to live. You may have to adjust one of these, depending on how much money you have and the current homes available in that area.
Now hire a Realtor to help you find your ideal home, and schedule showings for homes you are interested in purchasing. Most homes for sale require a Realtor to gain entry and show the property.
Once you find a home you want within your price range, the agent will submit an offer on your behalf to the sellers agent. In the offer you will outline terms such as your offer price as well as your due diligence, earnest money, attorney and closing time frame. Closing time frame is often between 30 – 60 days.
Due Diligence money is money that you put up for the duration of the due diligence period. This can range from $500 – $5000 (or none) depending on how strong you want your offer to be. If the deal does not go through, you will not get this money back unless the sellers have breached the contract. The due diligence period is often 3 weeks.
Earnest money can range from $100 – $10,000. This gets paid after the offer is accepted as a way to show earnest interest, and is applied to the final home price at closing. If the deal does not go through, you will get this money back.
In the offer you also specify your attorney that you want to use. The buyer and seller both have their own attorney in the home buying process that will be with you until the end of the process.
Once the offer is accepted, you submit your due diligence money directly to the seller, and the earnest money to the lawyer to be held in an escrow account.
Once we’re under contract, it’s important to hire an inspector and get them scheduled as soon as possible, to ensure your inspections will be done before your due diligence period ends. Inspection of the property usually costs between $300 – $600 from a licensed home inspector.
After the inspections we can negotiate repairs on items that were unexpected. However, the contract is as is, and the seller does not have to agree on any repairs. If repair requests are not met, the buyer may choose to continue with the sale or back out of the contract. If the buyer chooses to back out of the contract before the due diligence period ends, they will lose their due diligence money, but get their earnest money back. If the buyer backs out of the contract after the due diligence period, they will lose both due diligence and their earnest money deposit.
If the seller agrees to do the repairs or reduce the offer price to compensate the buyer for taking care of them, and to prevent the buyer from backing out. Often the reduction in price is best remedy.
Once the inspections are done, and repairs or price negotiations are finalized, then we are clear to close (define).
You will receive the closing disclosure (define) two days before closing.
During settlement everyone signs.
The wire transfer is the day before or the day of closing, due to closing disclosure (define) coming in at the last minute,
The house closes (ownership transfers) when the deed is recorded in the buyers name at the courthouse. After that completes, the new owner get the keys.
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