Buying a home isn’t just a great investment, it’s a milestone of the American Dream. The home-buying process can seem complicated not only to first-time buyers, but to seasoned homeowners as well. That’s why The Packer Group put together this handy cheat sheet for you – to break down the process step by to step to seem a bit less overwhelming. While not every deal will look exactly like this, we hope this gives you a better idea of a typical home buying experience.

First – Get pre-approved for a mortgage

Shop around for mortgage lenders (we can point you to ones we trust here) and get pre-approved for a mortgage. Being “pre-approved” isn’t the same as being “approved” for a mortgage (hence the “pre”). It means you’ve provided the bank some preliminary information about your finances, and they have let you know how much you would likely be approved to borrow.

Getting pre-approved accomplishes two important things:

1. You’ll know the maximum amount that you can spend. (Keep in mind that this is the TOP of your budget range, not necessarily a number to shoot for.)
2. It shows the home seller that you are actually capable of purchasing their home. Sellers won’t accept an offer on a house unless you have a pre-approval letter.

These two factors make getting a pre-approval a MUST.

Second – Choose and meet with a Realtor

Working with a seasoned Realtor from The Packer Group makes the entire home-buying process simpler and less stressful. Your Realtor will help you navigate the market, walk you through each step in the buying process, and protect your interests.

Tap into your Realtor’s wealth of experience and knowledge! Our Realtors know neighborhoods you might not be familiar with, home repairs to watch out for, and so much more.

You don’t pay any fees when you use one of our Realtors to buy a home – the seller pays for that (unless the purchase agreement stipulates otherwise).

Third – Go look at some homes!

It’s never been easier to look a variety of homes fast … and in your PJs. Your Realtor will probably send you new listings daily of homes that meet your parameters. You can check them out online first, or go straight to an in-person showing. When you find houses you’re interested in, just tell your Realtor. They’ll schedule a time for you to go tour homes together.

Fourth – Put in an offer

Once you’ve found a home you love, it’s time to put in an offer. Many times, in this fast-paced market you will need to submit your offer shortly after viewing the home. There is nothing quite like falling for a home, only to lose it to another buyer because you dilly dallied. You and your Realtor will discuss the amount you want to offer, and then your Realtor will send in a formal offer with a fixed window of time for the seller to accept, reject, or counter it.

Fifth – Negotiations

More than likely, your Realtor will negotiate with the listing agent on your behalf. The price of the home can go up or down. Who pays closing costs? Does the seller throw in appliances? Your Realtor will do their best to help negotiate a fair deal while protecting your interests.

Sixth – Offer Accepted. House Goes into Escrow.

Once your offer is accepted, your house goes into Escrow, which is a magical land of waiting around. “Escrow” is where the house stays while all the other parts of the home-buying process are being completed.

Seventh – Get Inspections

Now’s the time to get the home professionally inspected. This usually happens between 5-10 days after your offer is accepted. The inspector will check for safety and structural repairs that are recommended to be taken care of before your contract is finalized.

Your purchase agreement will probably be contingent on the home inspection’s findings. That way, if the inspector finds something significant, you can pull out of the contract. For less-than-devastating repairs, you can ask the seller to fix them. You will be responsible for paying the inspector unless otherwise specified in your contract.

Eighth – Your mortgage company orders an appraisal (If applicable)

If you are using a mortgage lender for part or all of the purchase price of your home, a home appraisal will be a part of that financing approval process. The purpose of your appraisal to make sure the house you’re buying is worth at least the amount of money the mortgage company is lending you. The mortgage company takes care of all of this. You are, however, required to pay for the appraisal unless otherwise specified in your contract.

Ninth– Paperwork Hurricane

In this stage, your mortgage is being processed and underwritten. Titles are deeds are being pulled. Most of this you don’t have to do, but you should expect to provide documentation of all kinds of things at this stage.

Also, during this part of the process, your credit, debt-to-income ratio and all your financial information is being examined by your mortgage company. Don’t make any big purchases right now, and don’t take out any other loans. Either could count against you in the mortgage-approval process.

Tenth – Final Walk Through

This usually happens a day or two before closing. You and your Realtor will walk through the home one last time to make sure all negotiated repairs have been taken care of and nothing that would affect the sale has changed (like a burst pipe, broken window or a leaky roof).

Eleventh – Closing day!

Finally, it’s time to sign some papers and get the keys! Better do some hand exercises, because you’ll sign your name about 80 million times that day. It’s worth it, though. Now you’ve got what you’ve been wanting – a wonderful home!

We’d love to help you find your next “Home Sweet Home”

We hope this guide has helped clear up some questions you might’ve has about the home buying process. If you have more questions, or if you are ready to start looking for your dream home, our staff of experienced Realtors are at your service. Just give us a call at 734-707-7992 to get started today!

When it comes to buying a home, finding one you like is just the beginning. Did you know – getting started on your mortgage is actually the very first step in your home-buying process. Getting a mortgage can be a bit intimidating, especially if you haven’t done it before.

Felling nervous because you’re not sure how to get a mortgage? You don’t have to. Sure, there may be quite a few steps, but this is a task you take on the same way you eat an elephant – one bite at a time.

So here’s a handy little guide we here at The Packer Group put together for you on the steps to getting a mortgage, what to watch out for, and who can help you at each stage.

Step 1 – Find a good lender

Most mortgage companies have similar rates, so what makes one better than the other is customer service and experience. Unfortunately, there’s no good solid way to compare lenders’ customer service savvy besides asking other people who have worked with them.

Just like roofers know the best homeowner’s insurance companies (because they work with them constantly), our Packer Group Realtors have worked with a lot of mortgage lenders. We have seen the benefits of working with good ones, and the damage a bad or even mediocre one can do to a deal. Ask your Realtor for suggestions, and make sure to ask if there are any companies they’d definitely avoid. If you’d like to see the trusted lenders we suggest here at The Packer Group, click here.

When you get your Realtor’s suggestions, compare rates and fees between the different suggested companies. You can do most of that online.

But remember – Don’t make your decision based just on rates. Your lender has the power to make the process simple or overly complex, fast or slow. They can either work hard to solve problems that arise, or cause problems by making mistakes or oversights. Go with a company with a good name and recommendations you can trust. You’ll thank yourself later.

Step 2 – Get Pre-Approved

Sellers don’t accept offers from potential buyers who haven’t been pre-approved for a mortgage, so go ahead and do this step as soon as possible.

To get pre-approved, your mortgage company will look at your credit score, debt-to-income ratio, income, available funds, and other information pertaining to your financial picture. The lender will determine the maximum amount of mortgage you may ultimately apply for. But remember, this is a MAXIMUM, not necessarily what you should plan to spend.

If you have already gotten pre-approved, but have decided you want to have someone else handle your mortgage, don’t fear. Getting a pre-approval from a mortgage lender does not lock you in to using them. Your Realtor can help you with applying with the new company if you so choose.

Step 3 – Find a house

Once you’re pre-approved, you and one of our Packer Group Realtors can start searching for your next “home sweet home.” When you find it, you’ll put in an offer and have it accepted. Your Realtor will take care of the paperwork for putting in the offer, finalizing it once it is accepted, and getting the mortgage process rolling.

Step 4 – Supply documentation

Once your mortgage is processing, you’ll be asked to submit more specific documentation of all sorts of things to your mortgage company. Some things you’ll need to provide include:

• Paycheck stubs
• W2s if you get a paycheck
• 1099s or P&L statements if you own a business
• Documentation of debts, such as credit cards and student loans
• Documentation of all assets, such as mutual fund statements, bank statements, and real estate and automotive titles
• Cancelled checks showing you’ve paid your rent or mortgage

This list is not at all exhaustive. Be prepared to furnish all sorts of documents to your lender. Don’t get frustrated; this is all part of the process.

Step 5 – Appraisal

Once your offer is accepted, your mortgage company will order an appraisal to determine the property’s value. The appraisal makes sure that the house is worth at least the amount of money the mortgage company is loaning you.

You don’t have to worry about ordering it or being present during the appraisal, but you do have to pay for it. The cost for an appraisal typically runs about a few hundred dollars, and the payment may be expected upfront or rolled into your closing costs. Ask your lender when you’ll need to pay for the appraisal.

Step 6 – Buy homeowner’s insurance

The mortgage company will require you to purchase homeowner’s insurance before they will finalize the sale. After all, they want to be covered if your house burns down the day after closing. You want to be covered, too. As soon as you sign on the dotted line, that house is 100% your responsibility.

It’s common practice for your mortgage company to roll your payments for mortgage, homeowner’s insurance, and property tax into your monthly payment. They will automatically renew your homeowner’s policy for you, too. This saves you from having to fork out a big payment once a year, and guards against forgetting to make your payments – which could be tragic if you have a claim and discover you weren’t covered because of non-payment.

While we may not be roofers, The Packer Group has worked hard to put together a list of trusted homeowner’s insurance agents that we trust will take good care of you today and for years to come. For the list of trusted agents, click here.

Step 7 – Lock in your rate

While the mortgage process is rolling along, interest rates are likely to go up and down. You can wait until up to 10 days before your closing date to lock in your mortgage interest rate. If rates are fluctuating wildly day to day, it can pay – or cost you – to wait until just the right moment to lock in your rate. Your mortgage loan originator can help you decide if it’s better to lock it in right away or wait and see which way the needle moves on interest rates.

Step 8 – Down Payment and Closing Costs

After you review all your final paperwork, you’ll need to get a cashier’s check or do a wire transfer for your down payment and closing costs before the date of closing. Your mortgage originator can tell you what date to post the check/transfer.

Step 9 – Closing

It’s the big day! Make sure you read over everything you sign before you sign it, and ask all the questions you need to feel comfortable with the process. Knowledge is power! Today, you walk out as the owner of YOUR NEW HOME! Congratulations!!

Need help finding a mortgage lender?

We work with lenders every single day, so we know who makes the process easy and who makes it tearing-your-hair-out difficult. We’d be happy to suggest some mortgage companies you can trust. Just give us a call at 734-707-7992 today!

The real estate absorption rate is how fast homes for sale are being sold – or “absorbed” into the market.

Here’s how the math works

Absorption rate is calculated by dividing the number of homes sold each month by the total number of homes on the market.

So, let’s say there are 1,000 homes on the market right now, and about 100 homes sell each month. That means the absorption rate is 10 – meaning it would take 10 months for every home on the market right now to sell.

In general, a balanced market falls between 5-7.

Why the absorption rate matters to us Realtors

Realtors at The Packer Group care about the absorption rate because it’s our job to price, market and sell homes. In markets with a higher absorption rate, agents may have to set lower prices on our listings because homes aren’t selling as quickly. Buyers can take their time choosing because they have lots of options and little competition.

Markets with a low absorption rate are where houses are selling quickly, and buyers are more willing to fork out big bucks for a home they really want – because they know it could sell at any minute to another buyer. Desperate buyers = higher prices and a faster sale.

Appraisers Care

Appraisers care about absorption rate because it’s something they factor in when determining the value of a property. Again, high absorption rates lead to lower values and lower ones to higher values.

And you should, too

And YOU should care because the real estate absorption rate will affect the price you or a buyer pays for a home. It may also affect your mortgage, if your appraisal turns up something different from the expected amount.

Wondering about your area’s absorption rate?

We’d be happy to chat with you about your area’s absorption rate and what that means to you. Just give us a call now at 734-707-7992.