Buying your first home EVER! Gimme the keys!

You found a house! Your offer’s been accepted! Clear sailing from here on out, right?

Well, maybe, but you should know what comes next.

Earnest Money

As part of your offer you will submit a deposit, called “earnest money” (I did a video on that – check out my YouTube channel if you’re interested.) It’s basically putting some skin into the game so that you have some incentive to adhere to the terms of the contract and perform the duties that you are committed to on the schedule that you’ve agreed to.

You need to meet the deadlines and SO DOES THE SELLER. If you don’t, there is the potential that the seller keeps your earnest money and the house goes back on the market. If they don’t or the contingencies around inspections, appraisals and loans aren’t satisfied, you can break the contract and have your earnest money refunded.

Inspection and Appraisal

Well, as part of the purchase agreement you’ll negotiate some terms, like an inspection, the fact that the your financing depends on the home appraising for the amount you’ve agreed to pay, that you can have your financing approved and ready to go by a certain point in the process.

If you decide that you are, or the seller is, willing to fix whatever is discovered in the inspection, or if you can work out a credit to the price to compensate for the issues (and there are ALWAYS some issues!), the process keeps moving – if not, you can ask for a refund of your earnest money and look for something else.

At the same time, the lender is completing your loan approval. You’ll want to be very responsive to your lender as they request documents etc, because missing a funding deadline can either delay closing or put you in breach of your contract enabling the seller to keep your earnest money and sell to someone else.

As a part of obtaining financing the lender will also order an appraisal of the home. The bank wants to know that the collateral on their loan (the home) is worth what they are lending you and they will be able to sell it and recoup their money if you default for some reason.

If the home does not appraise for the amount that you’re borrowing, a few things can happen. You can renegotiate the price downward to make up for the difference, you can come up with the cash to make up the difference, or you can walk away if the financing contingency is not met and specified in the contract.

On the flip side, homes have been known to appraise for MORE than you’ve agreed to – in this case it’s like you’ve been given a prize because it’s effectively instant equity in the home that you didn’t have to wait or pay for. Yay!

Title search

While your lender is working on your loan, you’re having your inspections done and the sellers are making their repairs, the title company is doing a search to make sure that the title is clean and there are no other claims on the home so that you can take possession at closing. When you get to the closing table you will be encouraged to buy title insurance, and that is a very good idea! Should something come up in the future, you’ll be protected.

Walk through…

Now it’s getting real!

The night before or the morning of closing, you will go to the home and take a walk though. You’re looking at the condition of the home to make sure that everything you expect to see there is present and in the right condition, that the home looks the way it should and that when you sign the papers and the home becomes yours that the house is the way it should be.


Your lender will let you know to the penny what you need to be prepared to bring to the closing table financially. They will also tell you how that money will be transferred – often it is simply a wire transfer from the bank.

You’ll sign a lot of loan documents that reaffirm the interest rate, dollar amount, how much the loan will cost you over the term, how long the term is, when payments are due etc etc. And, if you are in MN, you will leave with a set of keys to your home because you take possession immediately unless you’ve agreed to another arrangement.

Last thing!

If you will be living in the house, do NOT forget to file for your homestead exemption!! This is a big discount on your property taxes because you’re occupying the house. You’ll get this info at the closing table, but make sure you put it on the top of the pile so that you don’t forget.

And now you own a home! Congratulations!

Home Buying · Uncategorized

How long does it take to buy a home?

If you have never purchased a home before the whole process may feel like a big mystery.

Stop by my YouTube Channel for more info on real estate & living in Minneapolis!

It’s something most people don’t do more than a few times in their lives and it’s the biggest purchase that you’ll likely make in your life. Well, good news! It’s not as complicated as you may think!

6-12 months from your purchase…

To answer the question “How long does it take to buy a house?” though – the answer is “it depends”! Don’t you love that? It makes me think about when I was a kid and wanted something – “Mom! Can we…?” “It depends…”. Ugh.

Well, one of the most important first steps is getting ready financially. If you have a good credit score (700+) you’ll likely not have a problem getting a mortgage. Many people have some work to do here first though. That means that you need to find out what your FICO score is (you are entitled to a free credit report annually at AnnualCreditReport.com). When you see your report there may be things on it that you want to dispute because you’ve paid them. You can also see what debts you owe – the goal is to get your debt to income ratio low. Lenders want the sum of your payments to creditors to be under 43% of your income for TOTAL payments – including your mortgage!

You’ll also want to make sure you have money for a down payment (minimum of 3.5% of the purchase price) and potential closing costs (2.5 – 3% of the purchase price) as well as cash on hand for things like home inspections and any deposits you may need for services, plus moving expenses.

If you need assistance in finding a loan officer that can help you find the best mortgage for you, ask a realtor! We work with them ALL THE TIME and typically know who is reliable, provides good service and has a nice array of loan products that they can offer you.

If you are a cash buyer, your timeline will include inspection and title search, but you can close FAR more quickly.

3 months from your purchase…

OK – that’s the hard part over! NOW you can start looking for a home. Because you have your finances in order, you know what you can afford. And your agent will know what you can afford as well! While it is a lot of fun to look at homes that are super fancy, if you can’t buy them… it’s a waste of time.

Finding the right home can be really fast or not as much. Some of that depends on you, and some is dependent on the market. As I type this, in Minneapolis, it is 110% a sellers market for anything under $350K. Homes are going quick, and inventory is low, so you may be outbid if you find one or there simply may not be a home available that meets your needs. However – you’ve done your homework, you have financing lined up and a down payment ready so when you find something you can submit a strong offer and push yourself to the top of the pile!

6-8 weeks from move in …

You find a home that you LOVE! You submit an offer that is attractive to the seller and you are prepared to close with! They ACCEPT!!

You will submit your earnest money (I have a video on that on my YouTube channel!) Typically, in Minnesota, that starts the clock on the inspection period. Frequently this is 10 days in which you have the opportunity to have a home inspector look at the house and give you an idea of what you are actually buying and if there are “material facts” that would inhibit your “quiet enjoyment” of the home. In other words – is there anything alarming that should be fixed before you can safely & comfortably inhabit the home?

Inspectors find things. If the items they find are things that you are willing to fix yourself, then ok. Or you can request the sellers fix it or rebate some of the purchase price so that it can be fixed in the future at no cost to you. If you cannot come to an agreement you can cancel the contract but you’ll be back to the house search stage … I need a flow chart in here. 🙂

30-45 days from move in …

Most lenders can get your loan underwritten and ready within 30 days. During this same time, a title search will be conducted and the sellers will complete any repairs agreed upon. If you have an FHA loan it can take an extra couple of days.

So! How long does it take to close on a home? It can be as little as a week or two for a cash buyer or as much as a year if you need to get your financial house in order. It’s all dependent on preparation on your part and being ready to make a clean offer.

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