Owning a home is a dream come true for many. Before it can happen, however, you have to go through an extensive process that starts with a home search and ends with the seller handing you the keys. In between, there is quite a lengthy list of documents that you need to complete to buy a house.
You might be asking, what documents do I need to buy a house? The answers are here in this buyer’s guide:
Before Negotiations
Before you even start your home search, it’s best to first get mortgage pre-approval as many sellers prefer to show their homes only to buyers with pre-approval. In addition, pre-approval will help you determine how much home you can afford, which you can use in setting your budget.
Pre-Approval serves as the preliminary assessment on your request for a loan. The first thing a lender will ask from you is proof of your income and assets to determine your creditworthiness. These are the documents they will typically request:
- Pay stubs or other proof of employment
- W-2s
- Bank statements
- Retirement account statements
- Tax returns
- Gift letters (if applicable)
- Form 1099 if applicable
In some cases, the lender might also contact your listed employer to verify your employment. They will also look into your debts and financial obligations, and ask for related documents, such as:
- Divorce decrees
- Documents on student or car loans, or other big ticket loans
- Documents on bankruptcy
After reviewing the paperwork and assessing your application, the lender will issue the pre-approval containing the summary of the loan and the loan estimate, which breaks down the individual components of the mortgage.
During Negotiations
Once you find the home you want to buy, you need to send an offer letter to the seller. Here, you’ll try your best to convince the seller that you’re the right buyer for the house. Your Realtor will help you draft the offer letter and make it as appealing as possible to the seller.
Once you and the seller reach an agreement, the next step is to sign the purchase contract. This makes the purchase of the house formal, and includes the following details:
- Identification of the buyer and seller
- Property description and condition
- Agreed price of the house
- What the buyer and seller have to fulfill in the agreement
- Everything included in the sale (e.g., furniture)
- Amount of earnest money deposit
- Cost of closing
- Date of closing
The seller must also disclose any issues with the house, its history, and all needed repairs.
Other documents needed at this stage are related to the verification of earnest money, home inspection results including possible pest infestation, the lender’s independent home appraisal, and a title review followed by a closing disclosure.
Closing
In the last stage of home buying, you’ll have to fill out a homeowners insurance declaration page, and undergo a property survey. Lastly, you’ll have to present a government issued ID as proof of your identity.
There are truly many documents needed before you can finally close on your new home. As your Realtor, I will be with you through every step of the process and manage the mountain of documents on your behalf.
If you want to learn more about the documents needed to buy a house and other home buying processes in the SF Bay Area, call me today at 415.602.0570 or drop me a note here.