Funds to Purchase
To purchase a home with cash, you will need to provide a copy of your most recent bank statement or money account. This will serve as your Proof of Funds and be submitted with an Offer to Purchase.
To purchase a home with financing, you will need to provide the seller with a Pre-Approval Letter from your lender. This ensures the seller that you have the income and credit to follow through with your offer. To receive a Pre-Approval Letter, the lender will require your credit report and these documents:
Most lenders are able to provide similar rates and products. Here are my tips to navigate lender choices:
Local helps. A local lender probably has experience working with your local attorney. Established relationships can make your closing day a breeze.
In-house Processor. If the Processor is in another state or outsourced, delays can happen.
Connect. Does the lender answer your questions? It’s a lot of paperwork and disclosures. You should feel comfortable and enjoy working with them.
Special Loan Products. Some lenders offer special products that you may qualify for such as 1st Time Home Buyer programs or medical profession programs. Be sure to ask if any special products might apply to you.
What is MLS?
The Multiple Listing Service (MLS) is a database of properties for sale. There is no national database, but rather many regional databases. Real estate agents pay fees to access their regional database. In the Charlotte metro area, we use the Charlotte Regional MLS.
While Zillow, Realtor.com and other home search websites are very convenient, their information is not always accurate. These sites can be great for initial searching, but information and property disclosures should be verified in the MLS database.
Ready to see something in person? Let’ go! Request a time to visit and I will coordinate with the listing agent and seller. Some properties, such as vacant homes, allow instant showings. Many properties have occupants and require a reasonable notice. Showing tips to remember:
Be mindful of video & audio recording inside homes
Rainy weather showings can help spot moisture issues
Use a personal checklist to compare your favorites
Before you make any offers, I will gather data, disclosures, HOA docs and other information about the property. Sellers are required to provide the Mineral, Oil & Gas Disclosure and the Residential Property & Owner’ Association Disclosure. These disclosures are signed and submitted with an offer.
The Offer to Purchase & Contract
When you have found the property for you, it’s time to submit an offer. North Carolina uses the Offer to Purchase and Contract. This form was created by the North Carolina Bar Association and the North Carolina Association of Realtors and is jointly copyrighted by both organizations.
Below are parts of the offer you will need to consider before submitting:
Due Diligence Date
In NC, a deposit is broken into two parts that generally amount to 1% of the purchase price. Checks are delivered when an offer is accepted and credited towards your closing payment.
Due Diligence Fee: Paid to the seller and is non-refundable; considered a courtesy fee to the seller for taking their home off the market
Earnest Money Deposit: Paid to the escrow agent and is refundable if you cancel the contract before your due diligence date
The Due Diligence Period
This is a period of time for you to perform your homework. The length of this period is determined by the Due Diligence Date agreed upon in the contract. The Due Diligence Date is a deadline and you cannot be refunded your Earnest Money Deposit if you breach the contract after 5pm on this date. The length of this period will often be negotiated, but an average due diligence period is around 3 weeks.
A general home inspection should be scheduled immediately. If the general inspection indicates a specific concern, you may need a specialized inspection, such as HVAC or Roof. The due diligence clock is ticking, so it’s important not to delay. Below are typical inspections you should consider.
General Home Inspection
Appraisal & Loan Approval
The Loan Officer needs to submit your file to their Processor as soon as a contract is signed. The Processor orders the appraisal and it takes about 2 weeks to receive the finished report. Best cas scenario: your appraisal clears, your file is sent to the Underwriter, you receive Loan Approval before your Due Diligence expiration.
Settlement vs Closing
While most everyone uses the term “closing” you are actually attending a Settlement appointment. Settlement refers to the signing of final documents by the buyer and seller. Closing is when the documents have been recorded by the county’s Register of Deeds. Most counties accept electronic submission of deed recordings and can be completed in as quickly as a few hours.