BUYING A HOME STEP BY STEP

 

A step by step process in Buying a home. This is usually the biggest financial investment a person will ever make.  It is important to understand the process and be comfortable with all of the elements of the real estate transaction when buying a home. The information below will serve as a guide though all the stages of the purchase.

To begin, your Real Estate Agent works on your behalf to provide every service connected to the home buying process, from expert advice in the early stages through the selection of a home and the careful monitoring of the settlement. Agents are licensed by the state and are bound by law to deal fairly and ethically with all parties to the transaction.

 

The home buying process starts with finances.

Consult with a lender:

• Determine how much house you can afford
• The type of loan most suitable for your circumstances
• Financial steps you would need to take to be qualified for a loan
• Note: when an offer is presented to a seller, the seller expects a letter from a lender affirming that the buyer is financially able to make this purchase.

 

Buying YOUR home.

    Discuss with your Agent:

• Your “wants” and “needs” regarding location, size (number of bedrooms, baths), amenities (yard, garage), and any other requirements important to you
• Time frame for the purchase
• Other considerations: will someone else be helping you financially or with the decision?
• Concerns

Your Agent will:

• Help set up a plan of action through an analysis of your needs and finances, and the current housing market.
• Personally conducting your search to find homes that fit your requirements.
• Guide you through the process of making an offer on a home, including a detailed analysis of comparable sales in the area.
• Present your offer to the seller.
• Negotiate
• Explain all documents requiring your signature
• Assist you through the closing process.
• Be available to answer any questions or discuss any concerns throughout the transaction.

 

What happens when?

Visiting properties:

• You will receive information regarding homes currently available which reflect your wants and needs 
• Your agent will arrange to show you these homes 
• Discuss the pros and cons of the various houses you visit  

 

    When you find The Perfect House:

• Your Agent will prepare a Comparable Market Analysis (CMA) to determine a fair market value for that house.
• Together you and your Agent will structure a purchase offer.
• This offer, along with a strong and positive cover letter describing you, and a supporting letter from your lender, will be submitted to the agent representing the seller.
• Further action will depend upon the seller’s response.  Terms and conditions of the offer may need to be re-evaluated and negotiated.

 

    When you have an accepted offer:

•  NOTE: your offer is contingent upon a number of factors such as inspections, disclosures, financing and appraisal.
• Your “Earnest Money Deposit” will be given to an escrow company. This deposit usually ranges between 1% and 3% of the purchase price.  It becomes part of the down payment at the close of escrow. The escrow company acts as a neutral intermediary, following the terms and conditions of the contract. 
• You will receive disclosures from the seller describing all known conditions of the property. 
• You will be given a number of days (typically 17 days but sometimes less) to do inspections and to satisfy any questions you may have regarding the property itself as well as the location. You are strongly advised to inspect the property using a local inspector. You may also decide to investigate the property more thoroughly using licensed electricians, plumbers, etc. The fees for these inspections are non-refundable, but will assure you of the soundness of the property.
• You may decide, for any reason, during these inspections to cancel the contract WITHOUT PENALTY although this is something you would want to do early on and not wait until the last day.
• You will receive a preliminary title report describing any liens, easements, restrictions, etc on the property. You will also receive a notice as to whether the title company will issue title insurance on the property. This is a form of protection regarding claims against the property. Again, you may cancel the contract WITHOUT PENALTY within this time-frame.
• Any disclosures or discoveries you obtain that are an issue for you can be used as a reason to cancel the contract. 
• If you are financing the purchase you will immediately begin the loan application.  If approval is not received within a given number of days (typically 17 days), you may cancel the contract WITHOUT PENALTY.
• The Appraisal will be conducted and if the result is less than the purchase price, the offer will be renegotiated to reflect the discrepancy. If there is not a satisfactory resolution you may cancel the contract WITHOUT PENALTY. 

 

    What to expect during this process

• You will be inundated with documents requiring your signature. Please review them and ASK your agent questions. 
• You must respond in a timely fashion to any requests by your agent, your lender, or the escrow company in order to stay within the contract’s time frames. 
• You will need to consult with your insurance agent to secure the necessary coverage to fulfill your lender’s requirements. 
• Approximately one week before the close of escrow, you will receive your financing documents (Docs).  You will sign these with a notary. It may take place at your lender’s office, the escrow office, or your home. 
• These documents are returned to the lender for their final approval. 
• On the day before the close of escrow your loan is “funded”. The next day your deed is “recorded” and the property officially becomes yours. 

 

    A final note

• It is not unusual to have questions and doubts during this process. Please express them to your agent who is well trained to respond to any issues you may be experiencing. 
• CONGRATULATIONS and ENJOY!