In theory, buying real estate is simple—you find a property you like, make a winning offer, and receive the deed from the seller. But in reality, several more complex steps must be completed to buy a property. To stay on track and better understand the purchasing process, use this real estate buyer checklist. It’s designed to guide you from start to finish!
If you need assistance selling your house or are looking for a new home in Isle of Palms, SC, contact Jimmy Carroll Realty today.
Set Your Budget
The very first task you must complete is to set your budget. The best way to do this is by calculating how much you can afford to make in monthly mortgage payments based on your income. This will lead you to your maximum purchase price and give you a clearer idea as to what you can comfortably spend without straining your bank account.
Hire an Agent
With a budget clearly defined, you should then hire a reputable real estate agent. There are several reasons why you’ll benefit from having a professional agent on your side:
- They know every step of the real estate purchasing process and can provide instant answers to any questions you have along the way.
- They can research the market to determine a fair price for the properties in the area(s) you’re searching in.
- They have local connections and resources to help them find the newest and best homes on the market.
- They’ll help you stick to your budget to ensure you end up with a property that meets both your financial and functional needs.
If you’re looking for real estate in Isle of Palms, SC, contact Jimmy Carroll Realty today!
Get a Preapproval Letter
The next item on your checklist is to get a preapproval letter for a loan from a certified lender. This requirement needs to be completed before you put an offer down on a property. A preapproval letter indicates how much a mortgage lender has qualified you to borrow based on your income, credit, and savings. To get a preapproval letter, you’ll need to gather and submit the following documents to the lender:
- Driver’s license or social security card
- Bank statements
- A credit report
- W2s and/or 1099s from the last two years
- If you’re self-employed, a Profit & Loss statement
- If applicable, paycheck stubs from the last 30 days
- If applicable, divorce decree or separation agreement
- If applicable, your landlords’ contact information from the last two years
Make an Offer
After you receive your preapproval letter and find a piece of real estate you love, you can then make an offer on it. Making an offer may seem like the easiest task to check off the list. However, your offer must contain a few key components to ensure the logistics work out exactly how you want:
- Offer price. Discuss with your realtor the price you’re willing to offer for the property based on market research and your finances.
- Responsibilities for fees. Your offer should indicate which party will cover closing costs (you or the seller) or whether the closing costs will be rolled into your loan.
- Submission of earnest money. When you make your offer, you must also submit earnest money. Earnest money is essentially a deposit you make on the property and it is usually a percentage of the offer price. That percentage is set by regional standards. Earnest money shows the buyer that you’re serious about going through with the purchase of the property.
- Contingencies. For instance, you could make the purchase contingent on the selling of your current home, a flexible or set closing date, a home inspection, and more. Meet with your realtor to discuss any necessary contingencies for your specific situation.
Order a Home Inspection
Once your offer is accepted, it’s time for a home inspection! This will reveal if any major repairs need to be made to the home. If so, you can negotiate with the seller, asking them to repair them before the sale or reduce the cost of the sale. Some major areas that will be looked at in a home inspection include:
- Structural components
- HVAC system
- Electrical system
Shop for a Mortgage Loan
With a green light on the inspection, you’ll want to start shopping for a mortgage loan. While you may decide to go with the lender who gave you your preapproval letter, it’s not a bad idea to see what other options exist. The goal is to get a low mortgage rate. The rate can change depending on the type of loan you choose and the types of loans you qualify for. However, you should also consider the rates and fees the lender charges by working with them, as these can become quite costly. Don’t hesitate to reach out to your agent for assistance on this step of the process.
Secure Your Mortgage
Once you’ve chosen a lender, the next step is to fill out a mortgage application with them. Some documentation you’ll need to provide includes:
- The signed Purchase Agreement between you and the seller
- Proof of the earnest money deposit
- Updated financial information
You should receive your loan estimate between three to five days that will list the specific rates, fees, and terms of the loan.
Get an Appraisal
The lender will then arrange an appraisal of the property. The property must be appraised at the set purchase price in order for the loan to be approved.
Close on the Property
Finally, when your mortgage application is approved, you can then close on the real estate. The lender will send the closing documents to the attorney or title company of your choice. You’ll then meet them to sign the documents in person.
The most important document to look out for is the Closing Disclosure. While your loan estimate you received indicates expected costs, the Closing Disclosure indicates final costs. The costs displayed in each document should be a close match.
Choose Jimmy Carroll Realty
We hope this real estate buyer checklist keeps you organized and on track as you search for a new property! If you’re ready to find a perfect piece of real estate for your needs, contact Jimmy Carroll Realty today. We can introduce you to all of the available properties in the Isle of Palms, SC area that you’re sure to fall in love with. We look forward to assisting you!