The Home-Buying Process In Dothan, Alabama
The Home-Buying Process In Dothan, Alabama
In the last couple years there seems to be a lot more people from out-of-state choosing to buy a home in Dothan. That being said, they might be used to different procedures for buying and selling real estate. For first-time homebuyers the whole process in Dothan is new. This article is for both experienced buyers from out of state that might not know the traditional way deals are conducted here as well as first-time homebuyers looking to jump into the market for the first time.
The Home-buying process in dothan broken down into simple steps
Getting Pre-approved
The first step to buying a home in Dothan is knowing how much you can realistically borrow from a lender. Even if you’re comfortable with a higher monthly payment, lenders have specific requirements to keep your payment within a certain range based on your income and other debts. So before you start house hunting, it’s smart to get pre-approved or pre-qualified by your lender. There’s a difference between the two. More on that here if you’d like to know more.
You can use any lender you prefer—it doesn’t have to be where you currently bank, though that’s a good place to start. We also have some great lender recommendations. Just drop us a line, and we’ll share contacts we’ve had great experiences with. It’s also worth checking out mortgage lenders and brokers who aren’t affiliated with a bank; we’ve got contacts there too. Working with someone that works on mortgages full-time is never a bad thing.
Home Shopping
Now for the fun part-going to look at properties! If you haven’t done so this is the time you want to reach out to an agent.
There are tons of websites out there that show real estate listings, but not all of them pull from the full Multiple Listing System (MLS). To make sure you’re seeing every property that fits your criteria, use a site that shows all the MLS listings. Our search page at Big Creek Real Estate includes every MLS listing. A great way to stay on top of the latest listings is by setting up Automatic Email Alerts. You can sign up for those right here.
When new properties hit the market, you might want to drive by to check out the area, or give your real estate agent a call to schedule a showing. If you’re out of town, no worries – we can “preview” the property for you. We’ll take videos and additional photos so you can get a good look at it. In our market, it’s not uncommon for buyers to make offers on properties sight unseen, especially when inventory is low.
Offer & Negotiation
Once you’ve found a property you want to buy, it’s time to work with your agent to put your offer terms in writing. Here in Alabama, we use a standard form called the “Alabama Purchase Agreement.” Your agent will present your offer to the seller’s agent (or directly to the seller in some cases).
At this point, the seller may accept your offer and form a contract with you, or they might reject it or make a counteroffer. If there’s a counteroffer, you’ll be negotiating terms. Once both you and the seller agree on all the terms and have everything in writing (including signatures from both parties), you’ve got a contract.
The Alabama Real Estate contract
The standard Alabama contract used by agents is called the “State Of Alabama Purchase Agreement.” What sets the Alabama contract apart from many other states is that Alabama is what is called a “caveat emptor” state. What this translates to is “let the buyer-beware.”
The purchase contract is set-up and formatted with this concept being the underlying principle of the agreement. Under the principles of caveat emptor, the buyer cannot recover damages from the seller for defects on a property that rendered the property unfit for ordinary purposes. The only exception is if the seller actively concealed latent defects (hidden defects that are likely to surface later) or otherwise made material misrepresentations amounting to fraud. The seller would have to have known about the defect and this is very difficult to prove.
With all of that said, the underlying message of the contract is “know what you’re buying” and we do that through home inspections and appraisals.
Home Inspection
As a buyer, once the inspection has been performed, many times negotiations will begin again as you or your lender may require that certain items be repaired or treated. Navigating this stage of the process is very important to both holding a deal together and minimize issues after the transaction. It can be difficult to weigh out the pros and cons in this situation but having been in this situation many times, we’re very experienced in helping our buyers achieve a great deal while still getting to the closing table.
The Appraisal
If the deal continues forward and negotiations on the home inspection were successful, the next step will be for the buyer’s lender to order the appraisal. (assuming there is a mortage) When the appraisal report has been completed and submitted to the lender for review, the property is given an appraisal value. At this point in the process, many times there will be negotiations yet again. If the value of the home reported in the appraisal comes up short of the agreed upon sales price either the buyer can cover the gap with cash or the seller can accept less. This is where a deal can really fall apart if you’re not careful.
While most appraisals end up meeting value, it’s important to keep in mind that an appraisal is simply an opinion of the value of the property. It’s also important to have a qualified buyer’s agent that can help you put the correct offer on the home from the start to help you avoid this problem at this important stage. There’s nothing worse than meeting all the deadlines, rearranging your life for home tours and inspections, only to get to this point and have the deal fall apart because the property’s value was never going to meet the offer price.
After successful appraisal negotiations (if there were any) the lender will then let all parties involved know when the appraisal report has been underwritten and we’re clear to close.
Pre-closing & title
After the appraisal, the parties prepare to close the sale. For sellers, this typically means signing a few documents and finish moving out of the house. For buyers, they’ll need to move their closing funds to their closing attorney’s office. Depending on the law firm’s policies, this can be done by wire transfer or a certified check. If a mortgage is involved, the lender will use this time to send loan documents to the buyer’s closing attorney. Also, the closing statement is prepared for both parties to review prior to closing.
Closing
When you’re buying a home with a mortgage, expect to have a “sit-down” signing at the closing table. This is the norm in Dothan as well. Financed sales come with a lot more paperwork than cash deals, and this is also when you’ll get the keys. We call this closing, but officially, it’s called “Settlement.” After Settlement, the closing attorney updates the title and records the deed (and the mortgage deed of trust) at the county courthouse. That’s the actual Closing. So, Settlement happens first and is part of the Closing process.
Contact us To Buy a home in dothan
When you’re ready to start the home-buying process and move to Dothan we’d love to help!
