• Sarah Lipkowitz

Steps To Buying A House In Maryland

Prepare. Start doing a bit of research. Figure out which neighborhoods you like the best, which agent you might work with, what the average home value is, and whether or not you need to work on your finances.

Pre-approval. If you are going to be applying for a loan, I strongly encourage you to reach out to a local lender before you start seriously looking. They will be able to help you get a more concrete idea of what your budget should be and a pre-approval letter is something you will need to submit with any offer anyway. Getting pre-approved is not usually a lengthy process, but if you find the home of your dreams before getting that sorted, you may lose out to another buyer who has the letter on hand. It is also important to note that a local lender will be able to give you more information on loan options specific to the state, area, or type of property.

Start Looking. Now that you have your pre-approval letter, it’s time to start looking. Whether you are looking for land, a home, or a farm, it is important to have laid out your wish list beforehand. What are the things that the property must have and what are the things that you’d like to have, but could live without or add later?

Make An Offer. Making an offer can be just as stressful as it is exciting! Ultimately, the terms of your offer are your decision, but your Realtor should be able to help guide you through the options and the paperwork. Typically, your offer will include price, closing date, the type of financing, inspections contingencies, and timelines to secure a commitment letter and inspection report. Items like transfer taxes and closing costs will also be included.

Negotiations. Sometimes your offer will be accepted right away with no changes, but you may receive a counteroffer. You then have the option of initialing the changes, countering back, or walking away. Once all parties agree to all terms, you are under contract.

Inspections. If inspections contingencies are a part of your contract, then you will have a set number of days to get inspections done and get back to the seller with any requests for repairs or credits citing the Inspection Report. There are many types of inspections that might be included in a contract. A general home inspection is the most common and will cover the systems, fixtures, and structures. Buyers may also opt for additional inspections such as chimney, radon, mold, water quality, and septic inspections. You may also elect to have a someone like an electrician or a HVAC professional out to investigate any items further if the contract allows.

More Negotiations. It is very common for buyers and sellers to negotiate for a second time after the inspections are done. The buyer can ask for the seller to either repair certain items or credit the cost at settlement. The buyer may also elect to walk away if no agreement can be arranged. Remember, things will always come up on a thorough home inspection so renegotiating is quite common. If the property is being sold “As-Is,” you can still write inspections into the contract so you know what you’re getting into, but you cannot ask the seller to make repairs or give credits.

Appraisal. A buyer who is taking out a loan will have to have an appraisal. The lender will order it themselves to ensure that they are not lending an amount that exceeds the home’s value. If the home appraises at or above the contract price, then the sale goes forward as planned. If the home appraises below the contract price, then the buyer and seller will either renegotiate down to the appraised value or the buyer’s financing will not go through. Cash buyers may choose whether or not they’d like to have an appraisal.

Commitment Letter. This is another step for a buyer taking out a loan. You will have so many days, as specified in the contract, to obtain a commitment letter. This letter essentially lets the seller know that the buyer’s loan has been through underwriting and is approved.

Final Walk Through. Before closing, you and your agent should do a final walkthrough. This is a good time to make sure everything that is supposed to convey with the property is there and everything else has been removed from the property. It is also wise to double check that all repairs have been made and the systems in the home are functioning.

Closing. The title company handling the sale will begin processing the title work as soon as the property goes under contract and the contract is submitted to them. They will check to make sure there are no clouds on the title or claims that could impede the transfer of ownership. They will also prepare the documents for the buyer’s and seller’s signature at closing. When finished, they will give the ‘clear to close’—which is often a week or more before the closing date. Many buyers and sellers don’t actually attend a formal closing, instead opting to sign ahead of the closing date. It is usually possible to either mail the forms in or make an appointment to sign in person ahead of time so there’s no need to panic if you are moving in from out state and unable to attend the closing.

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