Buying

Once you have decided you are interested in purchasing a home, it is time to find your Realtor®.

In a brief presentation, we will discuss your goals, what you are looking for in a home, a little about me and what my team can do for you, current market trends, and the lending process.

While both real estate agents and Realtors® must be licensed by the state, a Realtor® must be a member of the National Association of Realtors® (NAR), which mandates that their members to adhere to a “Code of Ethics” and “Standards of Practice” higher than the law, which requires re-training every two years.

Your home is your biggest investment and your most cherished possession, so choose a real estate agent who is proven, knowledgeable, and has a philosophy that you agree with. Read their client reviews. Visit the agent’s website. Take a look at their past sales. Then take a moment to think of some thoughtful questions to ask your real estate agent:

• Are you full-time or part time?
• What are the current market conditions?
• What is going on with interest rates?
• What is your process to connect me with local service providers?
• How well do you know the area?
• Do you have an assistant or team? Who will I be working with primarily?
• What separates you from your peers?
• Besides offer price, what are some other ways to make my offer more attractive?
• Typically, how quickly can we see a home?
• What is your process to determine a fair offer price?

There are many things you can do to help you prepare for the mortgage loan process. One of the most important things is to create a budget to help you decide how much you would like to spend.

You could also work on decreasing debt, saving for a down payment, improving your credit score, or maybe even asking for a raise at work.

Most importantly, do not make any large financial decisions (changing jobs, buying a car, or opening new lines of credit) without consulting your lender.

We always say that you want to choose a lender who makes you feel like you are the priority – one who is knowledgeable, communicative, and patient throughout the process. Ensure you are fully informed by thinking of some questions that are important to you:

• What types of mortgages do you offer?
• Which loan options would you recommend for me?
• Are any of your fees negotiable, or are there any special promotions?
• How much is Private Mortgage Insurance?
• What are your escrow requirements?
• Is the loan and/ or its servicing transferrable to another company?
• Can the interest rate be locked in? What if the rates drop?
• How much will I be paying total over the life of this loan?

If you are looking to finance your home, you may find it difficult to navigate all of the financing options, so we take the time to help you coordinate with some local lenders to assist with the process.

There are a variety of loan products, so it is important to take your time and fully understand, without any pressure, which type of loan is best for your financial goals. The lender you choose should guide you towards the loan product that best fits your needs.

We highly recommend you request a Loan Estimate from each lender for easy comparison. Shop the lenders and let each of them know why you are thinking about choosing another lender, in case they can make any adjustments in your favor.

Generally, “pre-qualified” and “pre-approved” are terms that are used interchangeably, but the small difference is that you are pre-qualified before the review of your financial documentation and pre-approved after the verification of your financial documentation. Understand this is not a guarantee of a loan. This part of the process will help you know what you can afford.

In addition, a pre-approval is typically required by some sellers in today’s competitive real estate market, so it is always nice to have this to attach to an offer to show you are ready to make a deal.

Once you have your pre-approval, feel free to look around to see what is available in this price range. Distinguish your “wants” from your “must haves” before you start house hunting and try not to get wrapped up in everyone else’s opinions. It is natural to want to get reassurance about such a big decision, but be sure you are focusing on the best decision for you.

To help you with the process, we use a great tool called Collaboration Center, a portal to the Multiple Listing Service (where real estate agents input all of their properties). With this platform, you are notified in real time of new homes listed for sale, including homes that are “Coming Soon” – a feature not always included on 3rd party websites like Zillow, Trulia, and realtor.com.

Once you have given us the criteria for the property you are looking for, you will get instant notifications of all properties fitting this description. You can then sort these homes as Favorites, Possibles, or Rejections, so we can see the properties for which you may be interested in scheduling a showing.

Collaboration Center also allows you to have direct access to any disclosures and documentation uploaded by the listing agent – a feature not included on traditional, 3rd party websites.

Once you have selected the homes you are interested in seeing, we will take the time to individually schedule each showing, and map out the best route to visit the homes with you.

We will also have property information readily available, so that we can all stay organized and informed throughout the process.

So you are ready to make an offer? Great! 

At this point we will create a Comparative Market Analysis on the home to determine the best offer price. We will then meet to begin reviewing the Purchase and Sales Agreement. This document includes information like the price offered, financing terms, earnest money deposit, inspection terms, and closing date.

The earnest money deposit is most often 1% of the purchase price, and can be delivered on the contract date, or up to a few days after. It is deposited into an escrow account until the closing date, at which point the money is applied to the your costs at closing.

The contract will likely also have contingencies based on the satisfactory results of the appraisal , inspections, insurance application (insurability), and mortgage application. We will take our time to review each clause in detail.

Upon receipt of the initial offer, the seller may accept, counter, or reject the presented contract. This isn’t always about a higher offer price, but may be about specific terms. It is all dependent on the motivation of the seller, and we will be there every step of the way to make sure you are informed and that we are appropriately responsive to the contractual deadlines.

The best offer will have the most preferable price, terms, and closing timeline, but there are ways to give yourself an advantage. Things that tend to be prudent in strengthening your offer are:

• Working with local lenders
• Increasing your earnest money deposit
• Shortening contingency periods
• Being flexible with the closing date

Dealing with a rejected offer can be frustrating, but it is a great way to learn if our strategy needs to be re-examined.

It is important to note that negotiations may come into play again after the appraisal, inspection, and financing processes.

Congratulations! Your offer has been accepted, and the clock starts ticking! We will send you a Contract Dates of Importance form as well as documents containing of all the pertinent information, and dates in which we need to get things accomplished. 

These dates are contractual, and missing something could mean the loss of the home and/or the earnest money deposit, so we will be in very close contact with you to ensure we stay ahead of the curve.

One of the most important dates on this form is the last date the buyer can cancel the contract, or the end of the contingency period.

The Seller’s Property Disclosure document must contain anything known that could negatively affect the value of the home.

Other common disclosures include the Homeowner’s Association Disclosure and Lead Based Paint Disclosure. We will review these in detail to ensure full understanding of all documents.

At this point you should have chosen a lender, completed your loan application, and given instructions to order your appraisal and credit report.

Once your loan application is approved, you will enter the underwriting process with the lender. Underwriting is a loan process step in which the conditions and terms of the loan are determined. You may be asked for additional documentation or verifications of previously supplied information.

After the completion of the final loan application, the appraisal is ordered by the lender.

An appraisal is an unbiased estimate of the fair market value of the home. It is a process that takes into account the home’s condition and the values of similar homes in the area.

The success of the transaction can depend on the appraisal confirming the value of the home is equal to, or greater than, the purchase price.

A crucial piece of the process, the inspections, will give us an idea of the home’s overall condition, so that you can make an informed decision. There are several types of home inspections you may want to consider, but the two most common are a general home inspection, and a Wood Destroying Organisms (WDO) inspection. These inspections are typically ordered by and paid by the buyer. We have an extensive list of local service providers to offer you, so this process will be less overwhelming. We can even help you coordinate the inspections.

A general home inspection is an objective, visual examination of the physical structure of the home from the roof down to the foundation.

A WDO inspection is an examination of the home for visible evidence of an infestation or damage by termites, beetles, or fungi.

During this inspection period, the clock is still ticking, so we want to work closely together and communicate often to ensure everyone involved is up-to-date. Once inspection reports are in hand, we can plan to meet to discuss the findings and begin further negotiations, if necessary.

Title insurance and homeowners insurance are both extremely important, and often required by lenders.

Title insurance may protect you from certain losses in the event an issue arises with the title after closing. Typically, title insurance will be required for both the lender and the buyer.

Homeowners insurance policies typically cover damages caused by fires, lightening, windstorms, and hail. It is important to understand what is covered in the quote, and look for additional insurance for damage caused by certain natural disasters, as well as flooding.

It is also helpful to ask if a Wind Mitigation or 4-Point Inspection would save you money on insurance rates. The Wind Mitigation (or Windstorm Mitigation) Inspection verifies the home's wind resistant features. A 4-Point Inspection verifies the condition of the roof, electrical, plumbing, and HVAC. It is helpful to order these to occur at the same time as the home inspection (usually for a marginal cost) rather than paying for an additional visit to the home.

The survey confirms the land boundaries, identifies conditions, looks for easements or encroachments, and is important to determining the plot of land you will be purchasing. We suggest this is ordered after the contingency period has ended to avoid being liable for the cost of the survey if the contract is terminated. However, if there are not more than a few weeks between the contingency end and the closing dates, it may need to be ordered sooner in order to ensure delivery by closing.

The final walk-through of the home should be no earlier than the day before closing. You will assess the house is in the same condition it was in when we placed the offer, that all negotiated repairs were completed, and that all items included in the Purchase and Sales Agreement are in the home. You will also be provided with helpful closing reminders.

Here we will compare the Loan Estimates from the lender to the Closing Disclosure to ensure accuracy and understanding. These documents will provide a summary of the expenses paid by you.

Always find out how funds are needed for closing (certified check, cashier’s check, etc). If the wiring of funds is needed to complete the transaction, NEVER follow instructions sent via email. Always call the closing officer noted on the first page of the Purchase and Sales Contract for money transfer instructions.