One day…
you drive past a neighborhood filled with nice homes, or maybe kids playing, and you say to your self: I like this…I wish I lived there. You start to dream about a nice large kitchen, family parties, and fond memories of the home you may have grown up in. You then decide…it may be time to get a home.
So what are the steps to buying a home?
1. Determine Necessities:
How many bedrooms? How many bath? Location?
At this point you may not know the style of you home like, but you have some idea of what you might not like. When clients call us they usually have some criteria in mind that is a requirement for the new home. Although price may be a factor, we like to get all of you most important, and your wish I could haves right out on the table.
2. How much can you afford?
Just because you have good credit, or you can afford a certain monthly payment, does not mean the banks see eye to eye. Determining your buying power is a key. We recommend a mortgage lender we have worked with and trust, or suggest you reach out to someone that can do a pre-approval for you. Last thing you want to do is find the right home, and find out you can’t get it.
What will the loan officer ask? How much you earn, check your credit, employment history, debt information, (how much you make vs how much you currently spend) and anything else that may help or hurt your purchase. Note: being honest and upfront with your loan officer is key – they will find out sooner or later, but sooner is better so they can have time to help you repair credit concerns, etc.
3. Free MLS Search:
Once the loan officer tells us a price range we plug your home description into the MLS (Multiple Listing Service) and see what homes fit your financial and physical criteria. We share this search with you with a Real-Time MLS email search, and determine your availability to show you the selected properties.
4. Showings:
Upon determining your schedule, we set up appointments to preview homes you may have interest in. During this initial time we are listening for your likes and dislikes to create filters for the search and customize it to your better liking. For example: If we are previewing condo’s and I hear you say – “I really like a balcony” – we adjust the MLS search to include a balcony and find homes that keep going closer toward your liking.
5. You find a home you really love.
At this point we encourage you to visit the home a couple of times to ensure the feelings last. Meanwhile, we give the details pertaining to the home to the mortgage lender, so he/she can start running actual numbers on how much the home will cost you monthly. We sit down and fill out an offer and discuss any specifics regarding price, timing and answer any further question which are important to you.
6. Negotiation.
Although this process is very situation specific and varies from home to home, the general idea is buy low, and get as much as you can for the money. This also means, that in a perfect real estate scenario, both buyer and seller will lose – it a meeting of the minds based not only on price, but also timing, comfort of financing, repairs, and many other factors we can go in when the time arrives.
7. The Contract.
Upon having an accepted contract both buyer and seller have to sign off on all the agreed terms and conditions. We then forward the executed contract to your attorney for review, and schedule a home inspection. We also ask you for the Earnest Money – which represents your interest in the home and security that the seller can soon take it off the market for you, with the hopes you will stay in contract and fulfill the agreed terms. The amount of Earnest Money usually represents an amount large enough that expresses your serious consideration of the home and will prevent you from walking away from the deal without a process.
8. Home Inspection.
This process occurs right away upon an executed contract as you usually have 5 business days to voice any concerns to your attorney. The home inspection process is great because you get to see the house in greater detail, and often begin to learn things about it that you might have not by just glancing. The downside is that home inspectors are there to find “problems” and they often do, even on new construction. The outcome is often your personal comfort with the found items, and also the ability to discuss repairs with the seller. Each situation and level of concern is different and best to addressed upon actual events.
9. Attorney Review.
Your attorney usually has 5 business days from the date the contract is signed by the seller, to address any concerns on the contract, including issues raised during a home inspection. If both you and the sellers agree to the terms of the home inspection, and you have already agreed to the terms of the contract, the attorney ensures there isn’t anything weird with the paperwork, and may make some modification regarding tax pro-rations, closing dates, and eventually approves the contract. Sellers have 5 business days to respond with any modifications they see fit, and this attorney review time is still an unsecured time for the buyer and the seller. Either party may still be able to walk away.
10. Start packing and preparing to move.
Although this time moves fast for some and really slow for others, after all the legal and due diligence steps have been taken, it time to continue to work with your loan officer, as well as began moving preparations. We stay in touch with you, but you will notice a small void of attention as we are all in a waiting pattern patiently awaiting 2 things: 1. When your financing is due. 2. The closing date which follows the mortgage commitment.
11. You’re getting closer.
By this time you have a pretty good grasp on your moving plans, you understand how much your monthly payments will be, you have sorted out any repairs, and the closing date is approaching.
12. Final Walk Through.
24-48 hours before your closing, we will want to walk through the home to make sure every thing is moving along, if the seller was to make repairs, they did, and that the home is still standing just the way you left it. Any concerns that may have been previously obstructed by furniture or boxes are raised at this time, if applicable. The sellers are probably going through a moving phase and may be juggling a bunch of their steps as well.
13. Pre-Closing Preparations.
The closing date is here: Bring your checkbook, bring a check for the down payment and closing costs which your attorney should be giving you the amount for, and you may want to take a half-day off work as this may take a few hours.
14. The Closing.
During the closing the entire transaction will take place at a Title Company or remote attorneys office with: Your Realtor, Seller’s Agent, You (the buyer(s)), often the sellers, rep. from the title company and buyer+seller attorneys. During the closing you will sign many forms which will be explained to you page by page by your attorney. You financing will also arrive paying for the home in exchange for the mortgage you promise to pay in return. Upon closing, there will be no money left on the table, as any overages will be credited to you, seller will get their check if applicable, and you will walk out with the keys to your NEW HOME!
15. Celebrate!
This is a brief explanation of how the most common real estate process goes from a-z. Please keep in mind, that home buyers use agents for representation because real estate is unique from home to home and transaction to transaction. Every scenario poses different concerns, questions, and events. Sometimes the process varies from what is described above, and we treat each experience in a unique and attentive fashion.
I hope to share this exciting experience with you, when you are ready.
