Buying a Home
Congratulations! You are thinking about buying a home OR have decided to purchase a home! Homeownership is one of the best investments one can make. Over time, your home will increase in value and your hard-earned dollars will pay down your mortgage balance. When you sell your home in the future, the resulting “profit” will be yours.
We are here to makes sure that home ownership is right for you as well as finding the right property. The reports offer a step-by-step planning process to help you determine which home is right for you. You’ll find a host of informative articles on mortgages, viewing homes, the offer, closing details and moving.
The Home Buying Process
There’s a greeting card that states, “Surgeon General’s Warning: Home-buying can cause severe heart palpitations, anxiety, sleepless nights, shortness of breath, loss of appetite, stomach upsets, memory loss, fatigue and hallucinations.” (©Maggie Holman, 1989, www.MaggiesMailbox.com ) This is meant to be funny, but sometimes it feels truthful! Knowing the process can lighten the buyer’s anxiety.
1. Choose a REALTOR®. This one choice can save you time, money ($$$), stress, and mistakes. Some criteria for choosing a REALTOR® includes:
Representation: Do you know how an agent can represent you? If you understand the duties an agent owes his/her client, what level of service do you want: exclusive representation, single agency, dual agency, or facilitator services.
Experience: An experienced agent has learned in “the school of hard knocks” in addition to the formal classroom. S/he has learned how to creatively negotiate for your benefit. S/he can also explain common practices in the bargaining process. An agent’s experience helps in reading the market to know if buyer’s or seller’s currently have the advantage in negotiating.
Education: Just like experience benefits the client, additional training keeps the agent abreast of new developments in the field. Using top real estate schools for continuing education is critical.
References: What do past clients have to say about the agent’s services?
Service plan: How does this agent plan to meet your needs of buying a house?
Personality: Is the agent’s personality intimidating or one you feel comfortable with?
The agent’s network: Because many people are involved in your process of purchasing a house, it’s good to know what people your REALTOR® recommends, and why.
2. States require all real estate agents to go over a disclosure with prospective clients early in the relationship. This disclosure, “Agency Relationships in Real Estate Transactions”, must be reviewed and signed by the prospect PRIOR to signing a representation contract with the REALTOR®. This disclosure does NOT legally bind you to work with any agent. It only gives you information.
3. Ask your REALTOR® for a recommendation of a mortgage officer if you do not already have one. Before house shopping it is good to determine your price range so you are not shopping for more expensive homes than you can afford. The mortgage officer should give you a good faith estimate of the costs for the loan that best fits your needs and a pre-approval or pre-qualification letter for use in making an offer on a house.
4. Sign a buyer representation contract with your REALTOR®.
5. Discuss your house hunting criteria and mortgage terms (i.e., seller will pay closing costs, amount of down payment, kind of mortgage, possession date, etc.) with your REALTOR®.
6. Review and choose houses (usually MLS listings) you wish to see.
7. Ask your REALTOR® to schedule showings to see the houses.
8. Start shopping for your dream home!
9. Write the purchase agreement.
10. If you are purchasing a condo – you will want to have your agent request and review all of the appropriate condo documentation. In many instances, for a condo purchase, we recommend an agent with a specialty in condominium sales.
States Vary
Different states have different rules and regulations for real estate agents and the disclosures they are required to have and how long they must keep those records.
You will need an earnest money check at the time the purchase agreement is written. In our area it is usually 1% of the purchase price rounded to the closest $500.00 and will be cashed within 72 hours of acceptance of your offer.
You will need a letter from your lender regarding your ability to get a mortgage.
Your REALTOR® will review the entire purchase agreement with you before signing.
10. Your REALTOR® will present the offer personally or by fax. You will not be present, but should be available for your agent to call with questions or to decide on a counter offer.
11. When your offer is accepted, the inspection must be scheduled within the time agreed to in the purchase agreement. You may choose an inspector or ask for referrals from your agent.
12. After the inspection, you may negotiate for repairs to be made, accept the house as it is, or cancel your purchase agreement. Your REALTOR® can give you guidance in this process and will negotiate for your written requests.
13. Copies of the accepted purchase agreement will be faxed to your mortgage officer and the title company by your agent so they can begin processing your loan and the title work.
14. Relax, take a breath, and start packing.
15. Purchase your first year of homeowner’s insurance coverage on your new home.
16. Call for utilities to be changed to your name on possession day.
17. The professionals on your team will do their work while you pack! Be aware that the mortgage company and title company may ask for additional information as needed, but silence from them usually means things are proceeding as planned.
18. Attend the closing as scheduled by the title company. You will need a picture ID, a cashier’s check made to yourself for the amount on your mortgage officer’s good faith estimate, your homeowner’s insurance binder and paid receipt, and usually your residence addresses for the last 10 years.
19. MOVE AND CELEBRATE!
20. TELL YOUR FRIENDS AND RELATIVES ABOUT THE EXCELLENT REPRESENTATION YOU GOT FROM YOUR REALTOR®.
Need to sell your home before purchasing your new one? No problem, we have you covered there too.