At The Shelby Charles Team, we know that buying a home can be overwhelming. That’s why our goal is to provide you with all of the information that you will need to know right up- front. We have prepared this Home Buyer Guide so you will have an idea of what to expect as you go through the home buying process.
• Get pre-approved with a lender to determine your price range… Some important factors in getting pre-approved are down money, credit score and debt-to-income ratio.
• Decide what you want… It is a good idea to be clear about what you are looking for up front. House or townhome; Number of Beds and Bathrooms; Fixer upper; New Construction; Location.
• View homes online… This will help you to determine value and get an idea of what you can afford.
• Interview a realtor… Choose a good fit for your needs based on their credentials, experience and compatibility with you and to get the representation & loyalty of your Realtor.
• Start viewing homes… Schedule appointments to view homes with your Realtor and visit Open Houses as well.
• Make an offer… Review the seller’s disclosure and look at what comparable properties are selling for in the area. Your offer will be written in the form of an Agreement of Sale and a deposit check will be required for consideration.
• Submit your Agreement of Sale… Here is a quick run down of some of the more important sections:
1. Offer price
2. Deposit money – first deposit at signing of contract; second deposit typically within 7-21 days Settlement date – typically 45-60 days
3. Inclusions/Exclusions – i.e. refrigerator, washer/dryer, window treatments
4. Seller assist – sometimes buyers will ask the seller to cover the closing costs.
5. Mortgage contingency – this may include the amount you are borrowing, the term, the lender, interest rate range (minimum to maximum), and is provided as a protection for the buyer in the event that they do not get approved for the loan.
6. Property insurance contingency – this is included for the buyer to contact
insurance company to make sure the property is insurable and at a
7. Inspections – the types of inspections that a buyer may choose are: home,
termite, radon, water, sewer, mold, stucco
8. Condo/HOA docs – review your docs carefully! Here you will be informed of
any capital contribution, which can be 2 months fees or more paid at
You will also be notified of any special assessments and need to read and
all documents, including Rules and Regulations.
9. Other clauses- i.e. Sale/Settlement of Property, Appraisal Contingency
• Negotiate the offer and come to terms… Here you will want to consider not
only price but also settlement date, money down, inspections and hopefully
come to terms that are acceptable to both parties.
• Schedule home inspections… Hire an ASHI certified Home Inspector. This
can cost anywhere from $350- $650 depending on the size and age of the
home. Based on the results of the inspection you may want to accept the
property as-is, negotiate for repairs or credits or terminate the contract.
• Obtain homeowner’s insurance… Check with your current insurance provider
to make sure the property is insurable and ask for rates.
• Obtain title insurance… A title company checks the property’s title records and looks for liens (claims on the property as security for money owed), overdue special assessments or other claims that will impact the ability for the property to be conveyed with “free and clear” title.
• Secure a mortgage commitment… This is issued by the lender approving your loan and is based on all documentation provided, appraisal and any other conditions that they require.
• Schedule movers.
• Transfer utilities into your name.
• Review your HUD-1 or Settlement Statement… You can expect your closing costs to be approximately 4% of your purchase price. These costs can include:
1. Lender fees – i.e. credit application, flood certification, points
2. Escrows required by lender – the lender may require that you pay up front to fund for taxes and insurance so that they have a reserve (normally when mortgage is 20% or less).
3. Transfer tax – 1% in most local areas but up to 2% in Philadelphia
4. Title insurance – state regulated fees
5. Broker service – many brokers charge a small transaction fee
6. Reimbursement for taxes paid by Seller
7. Misc fees – i.e. notary, document preparation fee
8. Condo/HOA – there may be a capital contribution to the association and you may be required to pay the next month’s fee at closing.
• Conduct a final walk-through of the property… Make sure that everything is in the same condition as when you first saw it and do a quick check to make sure everything is in working order.
• Attend Closing/Settlement… You can expect the following attendees: buyers, buyer’s agent, seller and seller’s agent, sometimes the buyer’s mortgage consultant and an officer from the title company (this is the person that conducts the closing and explains all the paperwork). You will sign all papers, hand over your official Bank Check and exchange keys! This guide is to be used just to familiarize Buyers with some of the steps in the home buying process. The Shelby Charles Team recommends working with a Realtor to help navigate and advise you through this process.