Buying Process
To all my potential buyer clients out there..
These are things that need to happen and the order they need happen in for your home purchase to be smooth and successful.
1. Get your mortgage preapproval
This has to be your first step. It is imperative that you have a clear understanding of what you can afford to buy. This includes knowing what interest rate you were approved with and whether PMI will apply you should also ask what your monthly payment will be without taxes.
****Keep in mind interest rates change daily until you lock in
2. Find a Realtor® you trust and stick with them
Of course I would say that I am a Realtor right? But it's true... A good Realtor will be able to set up Appt schedules, ask questions up front, eliminate properties that might look great on the net but in reality do not meet your criteria and vice versa for homes that look bad on the net but fully meet your criteria. I find that as a buyers agent one of the most important things I do is save you time and keep you focused.
****I can show you eight homes in the same amount of time it takes you to see four open houses
3. Identify what you can't live without!
There is a big difference between what you can't live without and what you want. Your Realtor will help you with this.
4. Find a home you love!
During this process you will really start to learn what your money will buy for you. You will also be educating yourself on commuting times and different areas.
****This is one of the largest investments you will ever make so don't
settle for anything that don't truly love. It doesn't have to be a
5000 square foot mansion with a three car garage, and built in
pool but it does need to make you feel warm and fuzzy all over!!!
5. Make an offer!
All offers must be in writing and should include a contingency addendum, lead paint notification, agency disclosure and a check typically $1,000 to bind the offer and be held in escrow.
****At this point everything is negotiable, dollars, dates , personal property etc. Keep in mind even with market conditions swaying towards the buyer's side homes are still selling and desirable well priced homes sell quickly sometimes with multiple offers even in this market. so if you really want the house don't play games or someone else might jump in and buy your dream home.
6. Have a home inspection.
While there is no law that states you must have a home inspection I think it is absolutely necessary to do one even on new construction.
****A good home inspector will check all of the main components of a home, including opening all windows and doors, attics, crawl spaces, systems and chimney's. Personally I like an inspector that runs the water for 20-30 minutes and check to see how long the water stays hot for. Drainage is especially important as well. Most home inspectors can check for basic pests like termites, carpenter ants and powder post beatles but you can also hire a separate pest inspector if you would like. A radon test can also be done at this time. Most home inspectors have kits that they can set up for you.
Don't forget to test the doorbell!
7. Hire an attorney.
Again this is not a requirement, but I recommend it. I also recommend hiring one who uses email!
****While I do understand the purchase and sale agreement and can explain it to you, I am not an attorney. I don't know precedent or what law suits could arise, so I always recommend an attorney. Most attorney's will give a price break to negotiate the purchase and sale if this attorney also represents the bank and does the closing.
Some people argue that attorney's cannot represent both but I have problems from it. The bank wants the same things as you right?
8. Sign the purchase and sale agreement and put deposit money in escrow.
Typically the buyer signs first but there is no law that forces the issue. The buyer will be required to put a significant amount of money in escrow at this point, typically 5% of the purchase price. The money will go towards the purchase price along with the first deposit made.
****Once the purchase and sale is signed the only way the sale will not go through is if you cannot get a mortgage or the title cannot be cleared
9. Apply for a mortgage.
At this point you should have already been shopping around for the best deal so now you have to choose your lender.
****You will be required to pay for an appraisal at this point but most of the closing costs will be paid at closing
10. Get a mortgage commitment letter.
A Commitment letter is the final step by the bank saying that all of the conditions have been met and they will finance your loan. This is a very important date because your 5% deposit could be in jeopardy if the date passes by and the bank rejects your loan.
****Most purchase and sale agreements require written notice and a letter from your lender denying the loan. If this happens I recommend your attorney taking care of it.
11. Confirm closing and money needed
While this sounds like a no brainer, I put it in here because banks these days are not on the same time schedule as we are and might not have all the paperwork and numbers ready in time for the closing that we scheduled. So be patient and in keep close communication with the closing attorney. It will happen it just might not be on our timeline.
12. Do your final walk through
I like to do the final walk through right before the closing. That way things cannot change and you will know exactly what the house is going to look like when you get it. Typically I go through all cabinets and drawers, closets etc. Just to make sure messes have not been left. From the walk through we usually go to the closing.
****If your soon to be new home has not been left in the condition it should have been left in or things are in disrepair, then we can figure it out at the closing table or you can not close until things are in the condition promised.
Holding back money does wonders to get things done.
13. Close on your new home!!
This is where you sign you life away. Don't be nervous it is pretty uneventful, just a lot of paperwork. FYI if you plan on reading every work of every document request them ahead of time. The closing attorney will go over what each document is but if you insist on reading every document word for word you will be there for 4 hours.
****Bring your drivers license and check book.
