Real Estate Process in 15 Minutes
Explaining the entire real estate sales process in 15 minutes can be confusing. Most of my first time buyers take it on faith that everything will work out, if they worry about one step at a time, if they worry about every step, before even finishing step one(the offer), the process can be overwhelming.
Beyond the search process; Find a great property.
1. The offer 1-7 days, of the initial offer, counter negotiations, questions ect.
2. The inspection is within one week of the 'accepted' offer. The inspection will run about $500+/- depending on who you use, the kind of equipment & testing they do. A radon test is ($50-$80) & pest (included with Tiger) is a must for the lender.
You get a check back at closing for the inspection/radon costs. This is where the 1st deposit is deposited in the seller agent’s office/broker escrow, usually $1000, which you get back if the deal goes south, or comes back to you the buyer at the close, as in the case with a VA loan. I have never had a client lose their deposit. This deposit is the 1st earnest money deposit. You do not have to do a deposit, but it will weaken then offer, if you do not.
3. Should the inspection turn up any items over about $1500, the possibility of re-opening negotiations exists, plumbing, & electrical issues usually.
4. Once both buyer and seller are in agreement on the offer terms post-inspection, then we engage the two lawyers (buyer & seller) to produce the purchase and sale (P&S). In most case most of the paragraphs (about 40+) are the same across the spectrum. The 1st page and last page contain most of the custom language for the house. Lawyer costs, title search, registration fees are covered are part of the closing costs. If you have a closing cost credit, this will usually cover it.
5. Once buyer & seller concur on the P&S terms they sign. The buyer agent (me) sends the completed P&S to the lender. The lender orders a VA appraiser to appraise the property. This is also where the 2nd deposit takes place. The 2nd deposit follows the same procedure as the 1st deposit, if the deal does not work out you get it back, as well.
6. The appraisal, within a couple days to a week the appraiser checks out the property and writes their report. The VA appraiser has 10 business days to submit said report. Once that happens the lender will let us know if the house 'appraises for value'. Which means the house is worth what you are paying for it, or not. I had a house in Fitchburg MA appraise $18,000 above the sale price last October, so the potential exists you may have instant equity. I have had only 1 house in 8 years under appraise, and it was for $7000. In that case we re-enter negotiations. Usually the seller will concede, because any other appraiser will likely come up with the same numbers.
7. Once the appraisal report is in, and all parties are simpatico, then it is on to the close. The VA will ultimately want a pest inspection of the shed, $110, before the close I pay this as a gift to my clients. There is not point paying to do it earlier, as it takes a day to do, and there is not point wasting money, if we have not reached this point.
8. The close, we meet at the local registry branch office, and you sign alot of paperwork, revue the HUD (an itemized expense report, that your lawyer will be privy to in advance and can explain every expense and credit). Closing cost will be worked out between your lawyer and your lender. The closing cost credit, will leave a very good cushion, that can be used for pre-paids (essentially buying down the interest rate) or buying back points.
9. Once all is signed, the deed is on record, you get the keys and move it.
Wow, alot of stuff to do! Let me know if you have questions, I thought this timeline would helpful. I could sit across a table and explain stuff, but it is hard to put it in the proper time context, without having experienced the process.
P.S. Attached is the agent duties and responsibilities, per order of the State of Massachusetts.