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Essential
Steps to the Home Buying Process The more knowledgeable and prepared you are, the less overwhelming
and chaotic the home buying process will be. My hope is that the wealth
of information provided in this article will help you feel more confident
about what’s involved in buying a house.
Preparation for a legally sound and financially strong
position:
- First off, we will clarify the difference types
of agency: one in which an agent represents the buyer, one in which
the agent represents the seller, or one in which the agent represents
both the buyer and the seller. We will clarify which type of agency
would best suit your needs.
- Then we’ll discuss what can
be said (by you, the buyer) to sellers, other agents, inspectors,
lenders, appraisers and
the endless cast of characters involved in getting a home bought or
sold.
- You will learn what is best kept to yourself, what
is legally essential for you to express, and how to maintain a legally
sound and financially strong position throughout the entire process.
Top Before viewing the first house – zeroing in on
the best:
- I will find out what your needs
and interests are for housing. This conversation covers more than
just size and price. It
encompasses commuting, family planning, esthetic tastes, long-term
plans and many lifestyle issues. This information reflects the neighborhood
and style of house that can become a nurturing and enjoyable home
for
you. Zeroing in on your true needs and tastes means less time and energy
looking at houses that won’t suit you! Your attention can go to
choosing between all the real possibilities for what’s best!
- The next step is for you to get pre-approved
for a loan. Understanding the loan process ahead of time will eliminate
unnecessary stress on you later in the buying process. I will give
you
referrals to reputable lenders if you haven’t already selected
one. There are several reasons this step is imperative before we look
for your new home. Here are a couple of them:
- One is that you’ll know
more specifically what price range is optimal for your search.
It can be frustrating
to downgrade your vision after viewing homes that you eventually
learn are beyond your price range. Pre-approval avoids that kind
of unnecessary disappointment. Likewise, if you learn you can
afford
more than you thought, the first few homes you see in a higher
price range will appear disproportionately more appealing, and
could lead
to unwise decision making.
- More importantly, when you find
the house you want, we want you in a position to make the most
compelling and competitive
offer possible, at the best terms for you. You have a huge advantage
when your offer is backed by a lender’s pre-approval, and
an equally huge disadvantage if it’s not!
- One more note on this topic: pre-approval is different
from pre-qualification. This very important distinction is covered
elsewhere on this site, in a section devoted to helping you create
the most compelling offer possible, regardless of price.
Top From “needle in the haystack” to “home
sweet home” - partners in a rewarding search:
- I search the Multiple Listing Service (MLS),
for every house that fits the description you have created. When
we go
look at the best of those listings, I pay close attention to what interests
you and what turns you off. At the end of that outing, if you haven’t
seen the house you want, I have a fairly clear image of what would
really
suit you. Thereafter, I can more effectively screen houses, showing
you only those closely aligned with your tastes and needs.
- I will explain to you how to search
the Multiple Listings yourself, should you wish to do so. If you
see houses in the Listings
that interest you, you simply e-mail me. As a Realtor, I have access
to more information, and I can send it to you. After you’ve
seen the additional information, we go view the houses that still
interest
you.
- I stay on top of market developments
for you, searching the MLS daily, for any new properties that meet
your criteria. I e-mail
you hot listings that might be of interest. I call you immediately
if I see something “hot” that it might not last long.
- If you drive by a house for sale that captures your
interest, you call or e-mail me with the address (house number and street
name) and I get the details for you.
- I even show you houses that are For Sale by Owner, if
you find one that interests you.
- If you go to an Open House without
me, tell them you are working with me (and give them my card if you
have one.) Do not
sign the guest registry without reading it closely. Doing so often
obligates you to work with the listing agent. If you really like
that house, call
me immediately but don’t disclose your interest to the listing
agent (even if he/she indicates there are other interested buyers).
- We view any house or lead that sounds
promising until you’ve found the right house for you!
Top When you’ve found the right one, make a compelling
offer and negotiate a deal:
- I do an analysis to determine the market value
of the home you have chosen, to assist in decision making about the
lowest price to offer.
- We write a offer based on the best price, terms, and
timing for your needs, while assuring your financial safety and minimizing
risk. (View Compelling Offers elsewhere on this website, for more details
about this important topic.)
- I present your offer to the Seller
and/or the Seller’s
listing agent.
- The seller can accept your offer
as it’s written,
reject the offer, or present you with a counter offer. This happens
within a particular time frame, so you aren’t left hanging indefinitely.
(Typically between 12 – 48 hours, depending on the circumstances.)
- If a counter offer is extended, you are not obliged
to accept it, nor are you obliged to continue negotiations unless you
so desire. I assist you in evaluating any counter offers and negotiate
on your behalf until we have a mutually acceptable offer or one or the
other party withdraws from negotiations. (More about this negotiating
process can be found in the Scary Parts section on this website.)
Top The multiple steps that take your transaction from accepted
offer to actual ownership:
- I set up an escrow account for your transaction
and work with the escrow agent on your behalf until the closing of
your transaction. (There’s a little more about escrow later in
this article and elsewhere on this website under Scary
Parts.)
- I get the title search underway and review (with you)
the preliminary title report for possible defects when it arrives.
- I send your lender a copy of the contract to get the
ball rolling there. You, too, will be in regular contact with the lender.
- We schedule an inspection of the
house. (I can refer you to reputable inspectors.) Based on the results
of the inspection,
you may want to arrange for additional inspections with roofers, a
sewer inspector, environmental testing and reporting agencies, etc.
All inspections
are typically paid for (by you) at the time of the inspection and are
done within a timeframe indicated in the mutually accepted offer/contract.
Once we have the necessary inspection information, we can negotiate
for repairs, price changes, or withdraw from the deal. (You’ll
find more information about inspections, renegotiations and repairs
under Scary Parts.)
- After the inspections are complete
and any necessary renegotiations handled, it’s time for the property appraisal required
by the lender. Most lenders require that you pay for the appraisal before
it is done. However, a few don’t require the payment in advance
but include it as one of the closing expenses. Your lender, not you,
picks the appraiser. I will provide information to the appraiser to
help verify the value of the home.
- Your lender may request more information from you as
the process unfolds. Certainly you will need to provide your lender
with an insurance binder for your new home-to-be, as the lender will
require the house to be insured prior to funding your loan. Often, your
auto insurance company will provide home insurance as well, and give
you a discount for covering both house and car. If you need insurance
referrals, I can provide some. Typically, the actual insurance payment
is made through escrow at the time of closing, and is not paid to your
insurance agent.
- I confirm the completion of any repairs agreed upon
after the inspection and arrange a re-inspection according to the situation.
- I stay abreast of the timing and terms of the purchase
agreement contract and see that necessary details are handled to assure
the successful closing of your transaction.
- Once the lender confirms that your loan documents are
ready, we schedule a time for signing your documents at escrow.
Top The four important phases to completing escrow:
There are four important phases to completing
escrow and moving into your new home. The first three are handled by
escrow and include signing, funding and recording. Not until all of these
have
happened is the deal “closed”. The fourth step involves “possession”,
or moving into the home. So let’s get clear about those steps.
- First, you go to escrow and sign a whole
lot of papers. Most of these are from the lender, and relate to the
mortgage
loan. I accompany you to the signing and clarify anything that might
create questions. This process typically takes between 45 minutes to
an hour. The escrow agent will have notified you as to the amount of
money you need to bring with you to this “signing.” The
amount is based upon the down payment noted in the mutually accepted
offer, the amounts of pre-payments (your lender will inform you of these)
and closing costs. This must be paid in cash or with a cashier’s
check. (No personal checks.)
- Most of these signed papers go back
to your lender, who reviews them and occasionally decides another
document is needed.
However, usually it’s accepted as complete. The lender then sends
the loan money to escrow. Escrow disperses the funds. This involves
paying off the previous liens and mortgage loan (which frees the title
to be transferred to your name), paying any other financial transactions
as outlined in your mutually accepted offer, and setting aside the rest
for the seller. This is the “funding” stage.
- Once the funds are dispersed, the
title gets changed from the previous owners’ names into your name(s) in the county
records. This “recording” step officially makes you the
owner(s).
- The date you actually move into
the house is determined by the pre-agreed “terms of possession” stated in the mutually
accepted offer/contract. Move in usually happens only after the deal
is funded and recorded. In some cases, the previous owner is given a
couple of days after closing to move. In others, the buyer might move
in before closing, paying “rent” until the actual recording.
You might what to check out the Scary
Parts section of this website for a bit more information about Escrow.
Getting the keys and gaining possession of your new
home:
- Whenever you are entitled to possession,
I walk you through your new home. We make sure it is undamaged, empty
of the
previous owner’s belongings and ready for you. This is when you
get the keys and begin to enjoy your new home!
- I will maintain contact with you,
assuring any “after
move in” questions get answered and concerns get handled. And,
of course, you are always welcome to call me!
Ready to begin? Want
to talk about it?
Give me a call today (503-319-4777)
or e-mail me at RealtorInquiry at AmoveInTheRightDirection dot com
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