I just started looking into the business. I was driving through my neighborhood this past weekend and came across a piece of abandoned property - actually in real good shape - just needs some minor cosmetic work. I have located the owner.
Once I make an offer to purchase the property, (if accepted) what is the next step, should I already have a title company in place, how will the money transactions take place. (I have contacted a HML to be pre-aproved for the loan)
I will want the property appraised, and a building inspection done, just to make sure I’m not missing anything. When should these take place. I would guess after the paperwork is signed - with some type of out clause written in the offer, incase something unexpected is found. Since this is my first attempt I really need this to go smooth.
One contract is signed by all parties take to title company and order title report. One title report is received and approved and you are sure the HML will make the loan then you should order the appraisal. The HML will base the loan amount on the appraisal so this could be the most important part of the process. Make sure you have done the comps yourself and have a great idea how much the house will be worth after repairs.
Your contract will more than likely be subject to inspections and you will have a limited time to inspect. If you have a small amount of earnest money at risk then the inspection time thing does not matter as much. An inspector will charge a few hundred and you do not want to spend this money if the appraisal is too low but you may have to if you want to find out the condition from an expert. Kind of a catch 22 on when to do the inspection because of the money risk. I do not hire an inspector so I do not have this problem.
The money will be handled by the title company. They will collect from the HML and pay the seller after all documents are properly signed and will record same for all parties. They will also pay all back taxes, liens, judgements associated with the title .
Buying house is a process. It’s not event. You need to it one step at a time and not be frazeled by everything that is required. Your buyers agent should be able to walk you through this process easily.