Home Buying Process
Buying a home is a complicated process involving many steps, people performing different tasks, and an extensive number of documents. Below are the key steps in the home buying process.
Initial Consultation with Realtor
- Buyer discusses financials with loan officer
- Loan officer orders buyer's credit report
- Buyer obtains loan pre-approval letter
- Establish price range
- Perform property search
- Select best property candidates
- Buyer visits best property candidates
- Buyer selects property on which to make offer
Buyer’s agent submits offer to seller's agent.
Seller’s Response to Offer
Seller either accepts the buyer’s offer, rejects the offer, or submits a counter offer.
Buyer’s Response to Counter Offer
Buyer either accepts the seller’s counter offer, rejects the counter offer, or submits another counter offer.
Seller and buyer agree and sign agreement (escrow time period begins)
- Purchase agreement is sent to escrow
- Buyer gives escrow company deposit check
- Buyer's check is deposited into escrow account
Escrow and Title
Disclosures (7 days)
Preliminary Title Report
Inspection Contingency Removal (Day 17)
- Buyer sends Inspection Contingency Removal
- Seller fixes items on Request for Repairs
- Seller fixes items on Pest Inspection Report and provides Termite Clearance
- Shop for homeowner insurance
- Select insurance company and coverage
- Insurance company provides insurance binder to escrow and lender
- Buyer performs final property walkthrough
- Verification of repairs
Prepare Escrow Documents
Sign Escrow Documents
- Buyer signs escrow documents, transfer documents, and seller signs and notarizes Grant Deed
- Title company performs title search
- Title company prepares Preliminary Title Report and it is sent to buyer and his agent
Research and Analysis
- Escrow orders existing payoffs of any recorded loans, receives copy of title report and reviews contents, checks for status of taxes paid or owed, reviews homeowner dues if applicable, checks for any leased equipment, clears any title problems.
- Escrow prepares estimated Settlement Statement (HUD 1) for both buyers and sellers.
- Escrow prepares all necessary closing documents in addition to closing loan documents.
- Escrow sets appointment for the buyer and seller to sign their respective documents.
- Sends all signed documents to lender for a final review.
- Escrow receives all funds from the buyer as required.
- Escrow sends documents to the County Recorder's Office to be recorded.
- Escrow disburses funds per the purchase agreement.
Estimated Settlement Statement
Close of Escrow (COE)
- Escrow officer does final settlement
- Buyer gets keys to home; seller gets their proceeds
Record and Transfer Title
- Grant deed is recorded at County Recorder’s Office
- Buyer's deed of trust is recorded at County Recorder’s Office
Post Close of Escrow
- Buyer receives final Settlement Statement and/or HUD-1 document
- Buyer receives check for any overage paid
- Buyer provides documentation to loan officer
- Loan application is processed by processor or loan officer
- Loan officer orders title, appraisal, credit report, verification of employment, verification of deposits, etc.
Loan Package Submitted
- Completed loan package is sent to lender's underwriter for loan approval
Preliminary Loan Approval
- Lender approves loan with conditions
Loan Contingency Removal (Day 21)
- Buyer sends Loan Contingency Removal
Final Loan Approval
- Conditions met and lender approves loan
- Closing loan documents prepared by lender and sent to escrow company
- Lender sends loan documents to escrow
- Sign loan documents and closing cost statements
- Lender wires funds to escrow
- Buyer wires down payment funds to escrow