Buying a new home can be one of the most important and rewarding decisions we make throughout our lifetime. At The Hersh Group, we will work carefully with you to identify what you are looking for, what your time frame is and how we can assist you in that search. Importantly, before buying your new home there are some questions you may want to consider.
- What type of housing do you desire? A single family home or a condo?
- What types of neighborhood amenities are important to you?
- How will you commute to work?
- How many bedrooms and bathrooms are ideal?
- What amenities are important to you in a new home: washer, dryer, fireplace, pets permitted, hardwood floors, central air conditioning etc.?
- Do you need parking?
- What jurisdictions do you prefer (DC, MD, VA)? (The Hersh Group maintains licenses in all three jurisdictions).
The process of buying a home can be outlined in three basic components:
1. Financing (Pre-Approval)
Before shopping for a home, contact a mortgage lender (link). The lender will review your financial information and provide you with a pre-approval letter for a loan. The pre-approval letter is not a loan but is an important document which may be utilized when making an offer. In most instances a seller will not consider an offer without a pre-approval letter.
After viewing properties and identifying a potential new home, The Hersh Group will work with you to submit a solid offer. The offer is a signed document outlining the terms under which you are offering to purchase a property. The seller of the property can accept the offer as written, make a counter offer, or reject it completely. If the seller responds with a counter offer you can then accept it, counter the counter offer, or reject it. The offer to buy becomes a contract when all parties have initialed every change and signed the offer.
When making an offer you will need:
A pre-approval letter from a lender, should you need financing
A certified check for a good faith (earnest money) deposit
Selection of a title attorney or settlement company who will conduct your settlement
A closing and occupancy date – this can be the date of settlement or at a latter date should the seller request to remain in the house past the settlement date. *
Financing after the acceptance of an offer
When a contract is accepted and signed by both parties the contract is ratified. While you may have had an approval letter from a lending institution for the offer, you will now need to secure the financing from a lender. You are not obligated to use the lender who provided the pre-approval letter, though this may delay the loan process.
Shortly before settlement we will conduct a walk through of the property with you to ensure everything is in working order.
Settlement occurs when all requirements of the contract have been completed and each party, the buyer and the seller, have a meeting of the minds and sign the respective documents. In attendance at settlement will be the title company attorney, the listing and selling agents, the property’s current owners (the sellers) and you, the buyer.
The settlement attorney/agent will walk through each document.
Deed of trust or mortgage
Deed of trust note or mortgage note
VA, FHA, or lender forms
You and the seller will then sign all the necessary forms. At this time you will need to pay the balance of the down payment and your closing costs with a cashier’s or certified check.
Federal law requires an estimate of closing costs be provided by the lender, in advance of the settlement. The lender may require an appraisal fee and a credit report fee in advance of the settlement. Closing costs usually average between 3% and 7% of the sale price.
Typical closing costs include:
Loan origination fee
Mortgage insurance premium
Owner and lender title insurance
County tax stamps
State tax stamps
In certain cases, some of the closing costs may be paid by the seller. Once all of the documents have been signed, you will receive the keys and will take possession of your new home!