The Home Buyer s Timeline Written by Michael A. Senior

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1 The Home Buyer s Timeline Written by Michael A. Senior Time Prior to Desired Moving Date 2-3 Months Develop your personal checklist Begin taking inventory of the needs of you and your family in making your next home choice. Be specific as to your desires Begin collecting and submitting your financials to the lender Start the process of selecting your lender and submitting the necessary documentation to receive mortgage loan approval. Start your search for a home inspector Interview and select your home inspector; begin this process early to avoid a time crunch once the contract has been signed Begin your property search Define the area of choice by doing a general internet search and working with your agent to identify properties for viewing. 1-2 Months Compare and evaluate homes Physically view all properties identified and compare the selections to include lot size, curb appeal and required features. Choose your home Make your second/third viewings to narrow your search to the home you will make the offer on, weigh pros and cons of each. Negotiate the offer and purchase contract Negotiate the terms and contingencies of the purchase contract to include sales price, closing date and seller concessions. Complete the home inspection and remove buyer contingencies Resolve any issues with the home inspection quickly to give the sellers time to complete repairs/replacements as required. 3-6 Weeks Moving arrangements Take this time to compare movers and get quotes and rates on moving, particularly for cross country or long distance moves. Search for homeowner s insurance Select the right coverage to include finding all discounts. Start early to give yourself time to compare for the best policies. Monitor the mortgage process Stay on top of the documentation/verifications required by the lender; make certain you are on schedule for final approval. 2-4 Weeks Start basic packing Begin the process of taking inventory of your belongings to estimate required boxes and get quotes on moving truck rentals. Make address changes/notifications Start the process of notifying various companies of your pending move; bank account, car loans, credit cards, employer, etc. Arrange for utilities at your new home Approx. 2 weeks prior to closing you can begin notifying your utility providers to change locations and date on which to do so Arrange for school transfer or registration For those with school children, take 4 weeks advance time to walk through the registration process for your new school district. Closing arrangements Approximately 2 weeks before the closing, contact the closing attorney and ensure that all buyer requirements are being met 2-7 Days Verify and confirm movers Now that it is the week of closing you should confirm the costs and times for the move of your belongings to the new home. Verify closing details with settlement agent Review the settlement statement to ensure all contract terms are being met and get the estimate of funds required to close. Verify the amount of funds required for closing by lender Once you have reviewed the settlement statement with your loan officer and agent obtain the funds in the required form. Complete final walk through on your new home Make your final walk through of the home to ensure all items found on the inspection report have been repaired or replaced. Finish packing and marking boxes Ensure all non-essential items are packed and marked 48 hours prior to closing. You want closing day focused on closing! PINNACLE PROPERTIES ATLANTA is a division of The Jeremy Michael Realty Group

2 The Home Buyer s Timeline There are no absolutes on a time frame for buying a home, some seasoned home buyers find a home their first day out while others who may not be as familiar with the process may take weeks or even months, particularly those that don t have a plan in their home search. But there are some general guidelines that can assist you with your overall planning. In an active real estate market, these timelines can be compressed (in other words, you will need to move quickly for desirable homes) but in a less active real estate market you may have the luxury of a bit more time. These time lines can also vary by time of the year; spring and summer months are generally more active while fall and winter months are a bit slower in property sales as a general rule. Regardless of the time of year or the activity of your real estate market, it is imperative that you begin the process as soon as possible to ensure a smooth and stress-free home buying experience. Time Period Prior To Closing Date: 3-4 Months >> Develop a personal checklist << This checklist will be different depending upon your current status. If you are a first time home buyer, your list will be different from the person who is looking to move to another home from their current one. We ll look at each in discussing this checklist. First time home buyers Before you start your home search, you should begin to take a personal inventory of your life and your lifestyle as it pertains to your living arrangements. This checklist will be personal to you so we cannot provide a checklist for this. Your checklist will be about the things and amenities you are looking for in your next home and that includes lifestyle as well. Do you like city life? Are you active and want walking trails for you and your pet? How about nightlife activities such as clubs and restaurants? It is important that you get specific here, quotes such as, I m tired of paying rent is not sufficient to answering these questions. In order for you to be happy with your first home, you ll need to know why and most important, what will make you happy. You don t want to settle for anything when moving yourself or your family into that first home. Current homeowners What do you not have now, that you would want in your next home? Is it a bigger kitchen? Do you need more rooms or space for your growing family? Are you looking for a better school district? Are you looking to reduce your daily commute to work each day? Once you have answers to these basic questions it will guide you to the features in your next home you would want to see. If you don t want to share that master bathroom sink in the morning and want one of your own, you ll need to look for properties with double vanities in the master bathroom in your next home search. So your personal -2-

3 checklist will require you to go room by room and assess those things you want in your next home BEFORE you start your search. The answers to these types of questions will help you to create a must have list in your property search which will narrow your choice of homes to those that fit your specific needs. It can be long or short, but most importantly, it must be realistic. In other words, don t look for that six bedroom, five bathroom home with a finished basement for under $125, >> Begin collecting and submitting your financials to the lender << For those who will require a mortgage to purchase their next home, you ll need to prepare your financial documents for the lender. The key element here is time, do not wait until you have found your home to start this part of the process because once you have gone under contract on your home, you re on the clock, so to speak. A specific closing date will be set and you don t need the added pressure of trying to rush your lending choice, so putting this part of the process upfront will eliminate a great deal of stress. The information you ll need to gather will be: Last two years W-2 statements or equivalent income information This will verify the consistency of income over time. Two most recent paycheck stubs (this may differ if self-employed) This verifies the income situation has not changed from the previous years. Three most recent bank statements or other accounts (Money market, 401(k), etc.) Funds in these accounts should establish the down payment and monies necessary to complete the closing. It must be noted that source of funds is generally determined here. These funds usually must be seasoned, which means the funds must be in the account with an average balance over a period of at least 60 days. This is to prevent unknown funds being brought to closing without verification of the sources of those funds. Thorough evaluation of credit report within the last 90 days Any problems regarding prior issues with credit are resolved in the pre-approval; accounts that need to be paid off or any similar issues that could slow down or hold up a closing are identified before issuance of a pre-approval letter which will make the closing process easier to complete. >> Start your search for a home inspector << Once again, the consideration here is to relieve stress. By providing yourself enough time, early in the process, to thoroughly select your home inspector will prevent you from scrambling to find a good inspector once you contract on your home. We have a great PINNACLE POINTS article titled HOME INSPECTIONS 101 that details all the ins and outs of the home inspection process that will be helpful in finding the right inspector for you and what you should look for in your selection. -3-

4 >> Begin your property search << This may sound like a simple step, but in actuality it is not, especially if you failed to complete the personal checklist described earlier. For many first time home buyers they will quickly find the process of buying a home can get frustrating by not following a strategy or a plan. Just logging on and searching the internet for a home can get overwhelming considering the hundreds of homes in a particular area. It is not uncommon for first time home buyers to search and view as many as 50 or more homes and never find the right one. This equates into wasted weekends, wasted gas and for those with children, a lot of preparation and getting the kids in and out of the car 50 times or more. The reason for not finding that right home is quite simple, they have yet to determine WHAT they are looking for and until they find out what that is, they will continue to search in vain and become quite disillusioned with the whole process. So it is important to complete that checklist first BEFORE you start that home search and it will save you hours and days of precious time. Time Period Prior To Closing Date: 1-2 Months >> Compare and evaluate homes << Once you ve determined the area and the amenities in your home, its time to begin the physical viewing of each property. While there are certain listings with great photography you cannot determine if the home is for you until you actually SEE it. Unfortunately, there are photos on the web that have been altered to make a room or home look bigger than it actually is. While this does not help the seller because it misrepresents the property, it does accomplish the role of wasting your time, which does you, the buyer no favors. But this is a critical component of home searching because you will need to weed out the homes that do not meet your requirements. By using helpful tools like our HOME COMPARISON WORKSHEET, you will find the process enjoyable because it will organize your selections in a manner that is easily quantified and then the decisions begin. >> Choose your home << This is where our old friend the CMA (Comparative Market Analysis) plays a critical role. It will guide the buyers in the right direction in determining the offer that will be made on the property. Our PINNACLE POINTS article, WHAT S A HOMEBUYER S BEST FRIEND? Details the specifics of the CMA and how it benefits the buying process. Your home selection should meet all the requirements of the personal checklist which was the very FIRST item on the timeline. This home should answer all of the questions you asked when thinking of your family s needs (i.e. do I need more rooms for the kids?, do you need a shorter commute?, do I like the school district?, etc.) Once you are comfortable with your selection and this home stands out above all others, it s time to negotiate and make this house your home. -4-

5 >> Negotiate the offer and purchase contract << Once you ve determined the right home for you and your family it is time for the negotiation of terms and conditions. You and your agent will negotiate the sales price, seller concessions, inspection clauses, items to be left with the property, closing date, etc. All of these things will obviously be predicated by your loan terms and the amount of funds the buyer can bring to closing. When all of these elements fall into the place the home of your choice will be in reach and final offers and counteroffers will signed and an Agreement between buyer and seller will be obtained. Once that phase is complete, now you and the seller are on a timeline and its imperative that all parties adhere to the conditions and stipulations outlined in the sales contract. That means for the buyer to complete inspections on time and submit amendments to resolve any issues and for the buyer to make those repairs, if any, in a timely and workmanlike manner. All parties working together will make for a smoother closing in the end. >> Complete the home inspection and remove buyer contingencies<< With all of the financial terms and closing date agreed upon in the purchase and sale agreement, the major obstacle to preventing the closing will be the home inspection. In most cases, this is resolved through negotiation of the items and issues found. This is your opportunity to get a detailed evaluation of the property from a professional perspective. Our PINNACLE POINTS article HOME INSPECTIONS 101 details the particulars of the inspection and what you can expect to find during this phase of the buying process. Once all defective items are agreed to be repaired or replaced and the inspection contingency is removed, the major hurdles preventing a closing will have been cleared. It doesn t mean a closing is a foregone conclusion because there will be loan conditions and an appraisal to be completed, but the heavy lifting would have been done. Time Period Prior To Closing Date: 3-6 Weeks >> Moving Arrangements << At this phase of the timeline the buyers can begin the process of gathering referrals or recommendations on various moving companies or assembling family and friends for assistance particularly in local moving. Cross country or corporate moves will require a moving company so giving yourself sufficient time to review costs and hourly rates of several moving company price quotes will relieve a lot of stress from last minute scrambling and taking whatever you can get just before closing. >> Search for homeowner s insurance << With your new home identified and the purchase and sale contract in place, approximately three to four weeks ahead of closing is a good time to compare homeowner s insurance policies from various companies. You want to make sure you are getting the best deal for the coverage you are asking for, to include deductibles, amount of coverage and whether or not you will be escrowing the payment with the mortgage payment. For those who wish not to escrow (pay taxes and insurance with the -5-

6 monthly mortgage payment) and choose to pay the homeowner s insurance policy separately from the mortgage payment, ask the insurance company if there are discounts for annual or quarterly payments and explore all of the different the types of coverage you can get. And once again, by giving yourself plenty of time to do so will pay big dividends in the end by relieving stress on closing day. >> Monitor the mortgage process << The mortgage process can get complicated from time to time even for the best credit applicants so it is imperative that you stay in touch with your loan officer to ensure the process proceeds along. The one thing you don t want to do is to hold up the closing process by not attending to loose ends in the mortgage application. For many first time home buyers this phase of the timeline is often overlooked because once the initial paperwork is submitted, it becomes out of sight, out of mind and small details are often neglected until JUST before closing and that s when problems of compressed time comes into to play. So whether you are a first time buyer or a seasoned home buyer, make sure the train keeps moving down the tracks and stay on top of your loan until you receive the clear to close from the closing attorney. Once you receive that, you are free to check off another phase of the timeline. Time Period Prior To Closing Date: 2-4 Weeks At this point, the closing is in sight and it s time to begin the preparation for the move. Begin to pack those out of season clothes and non-essential furniture and accessories. At this stage you can begin packing away the fine china and begin the put boxes in the rooms to be moved and mark each box with the room items. Once again, you can buy the tape and bubble wrap but it s still a little too soon to break down the beds and bookshelves. This is an often neglected task that tends to get put off until the very end and in some cases, doesn t get done until AFTER the closing, which can be problematic. By notifying relevant parties early in the process removes another item off of the checklist and makes the closing much less stressful. There will be enough to worry about as the closing date approaches, so clearing the small, but important items off of the checklist will allow you to focus on the bigger things come closing day. Take care of the utilities switch with services like Allconnect, which is a service that offers price comparisons for utilities in your area of choice. You can also accomplish this one at a time as you need to and do your own search, but the key here again is to get this done well ahead of closing day. These are the smaller items that should be cleared off the list to ensure that the closing week can focus on the major things like issues with your loan, if any, or problems with the sales contract if they should arise. -6-

7 If you are a buyer who has children that need to be placed in a particular school district or private school during this portion of the timeline it would be a good idea to start the process of registration approximately three to four weeks before the actual closing. With this much time between filling out applications and the actual move, you ll be able to obtain any necessary documentation required by the school such as change address forms, birth certificate, etc. and still have plenty of time to provide the information without being rushed at the last minute which could cause problems if that documentation was not at your fingertips or would require additional time to receive. For private school registrations or transfers, prorated fees and tuition may come into play, so knowing well ahead of schedule will provide adequate time to make the necessary financial adjustments to complete the process. This part of the process has very little to do with the buyer. Issues with the property title and property tax proration are being done by the closing attorney. If there are issues with the title that must be resolved to ensure that it is clear for the new owners, the sellers will take this time to clear up any issues that need to be resolved. Per the contract, the buyer has a right to review the title prior to closing, though it is not required and in most cases necessary, but if you would like to review it, simply contact your agent and arrangements will be made with the closing attorney to allow for the review. So if it is not something that you need to do, you can simply check off this part of the timeline. Time Period Prior To Closing Date: 2-7 Days >> Verify and confirm movers << Now that you have reached Closing Week, its time to verify that everything is on schedule and ready to go. After completing your initial packing from a few days/week ago, you should have a pretty good idea of the amount of space you will need to move in regards to the size of the truck and the amount of boxes to be moved. Before you get any surprises on moving day, you should take this time to verify the rates you have been quoted and make changes, if needed, if your initial estimate requires adjustment. >> Verify closing details with settlement agent << This part of the process requires you and your agent to stay on top of things. Again, you are attempting to remove any closing day surprises by going over all of the pertinent details of your contract, to include making sure your homeowner s insurance is in place with the proper coverage and the insurance policy has been received by the closing attorney, making sure that at this point all contingencies of the contract have been signed off and cleared and that all parties to the contract are aware of their closing day responsibilities. This includes providing the specific closing time and address to the attorney s -7-

8 office so that everyone knows where to be at the appropriate time. Believe me, this one small detail is often overlooked and has caused unneeded stress on the day of closing, so eliminate that by ensuring early in the week that everyone knows where to be and when. >> Verify the amount of funds required for closing by lender << Now it s time to contact the loan officer and ensure everything is on schedule with the mortgage loan. Again, if you have followed the timeline, you should have been in constant contact with this person so at this point you are verifying the amount of funds you will need to bring to closing and the acceptable form of those funds (i.e. electronic transfer, cashier s check, etc.). You should also receive a copy of your settlement statement for review to ensure it is consistent with the agreement in the contract in terms of seller concessions and other items. Once again, addressing these issues prior to closing day will make the actual closing day stress free. Many closings become very contentious if buyers and/or sellers receive big surprises AT the closing table. These types of things happen when people don t follow the timeline and it is not unheard of that closings have completely fallen apart at the closing table because people were unaware of changes made during the process that they had no idea about, which again would have been resolved if the party had been notified according to the timeline. So don t let this happen to you, following the timeline will prevent these last minute surprises. >> Complete final walk through on your new home << At this point in the process everything should be complete with the exception of the closing itself. You should schedule a final walk through to ensure all items on the inspection report have been satisfactorily completed and that the home is in the same condition as it was at the time of contract acceptance. Any issues that still remain can be dealt with by amendment to the contract and/or agreement by all parties prior to closing so long as they are not serious in nature. Any issues that rise to a significant level or additional monetary contribution by the seller may have to be cleared by the lender prior to closing, so you want to be careful in how you proceed with those issues. Although if all parties adhere to the timeline and address issues as they arise in the process, these types of last minute surprises are virtually always avoided. >> Final packing and marking boxes << With moving day around the corner and the closing is here, you probably living out of boxes and ready to complete your move. It is recommended that all of the major packing should be complete at least 48 hours prior to closing. The main reason for this is not necessarily out of convenience, but for efficiency. You want to make sure the closing day is exclusively devoted to closing! The last thing you need to do is to try and deal with packing, changing addresses, dealing with the moving company and notifying various parties and people of your pending move on the day of closing. In the event that something should occur on closing day that needs your attention, if you are in the middle of all this confusion and chaos and someone at the attorney s office or the lender or your agent needs to reach you, you want -8-

9 to be sure that you are available. Closings can get very frustrating if one of the parties is unavailable because they are in the middle of something else and the closing is scheduled for 10:00 AM and no one can reach you. So it s very important to make sure your day is open so any issues can be dealt with quickly to avoid delays in closing. Everyone has come too far and has too much invested to see things fall apart at the end. So follow the HOME BUYER S TIMELINE and you will be amazed at how simple closing on a home can be! The Home Buyer s Timeline Presented by -9-