Educate Yourself On the Buying Process
Your new home purchase will probably be one of
the most important decisions of your life. Before
you begin it is important to educate yourself
on the real estate market in your area and the
buying process. An experienced real estate agent
who knows the area can help you with both these
issues. Other excellent resources are books on
home buying and seminars for the homebuyer. You
can contact info@boardwalkrpm.com
to request a free “Home Buyers Guide”
or for information on upcoming seminars.
The ten steps of the buying process discussed in this article are:
- Your
Credit Score and “Loan Pre-Approval”
- Select
the Best Real Estate Agency
- Search
For Properties
- The Offer,
Counter Offers and Acceptance
- Disclosure,
Disclosure, Disclosure
- The Physical
Inspection
- Opening
Escrow
- Leander
Requirements and the Final Walk Through
- Closing
Escrow
- Final
Notes
1. Your Credit Score
and “Loan Pre-Approvals”
Your "FICO" score provided by each of
the three credit reporting agencies is one of
the most important factors that lenders consider
when providing a good home loan and determining
interest rates. Your bank, or a mortgage broker,
can interpret the FICO score for you and advise
you on the best course for your situation. It
is wise to apply for a "Loan Pre-Approval”.
This entails a process of complete verification
of your loan application, employment, assets,
etc. The loan approval step is critical to knowing
the interest rate you can expect based on your
credit and exactly how much home you can afford.
Furthermore, having a "Loan Pre-Approval"
in hand will strengthen your offer on any property
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2. Select the
Best Real Estate Agency
It is an advantage to the buyer to have the best
professional representation. In most situations
the seller of the property pays the real estate
commission and the services of a professional
real estate agent are free to the buyer. Our
Real Estate Agents have assisted hundreds of buyers
in finding the home of their dreams. We have one
of the most educated and dynamic staffs of any
real estate company in the local area. Because we
are a smaller office, we are afforded the opportunity
of dedicating our full attention to service and
commitment to our clients.
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3. Search For
Properties
Sometimes you find the home of your dreams immediately
and your first offer is accepted. Usually the
search takes several weeks and it may not necessarily
end with the first home you submit an offer on.
For some people the home search process will take
months. Be determined to find the perfect home
at the best possible price, regardless of whether
it takes a day or months.
Our agents use all the latest real estate
technology. It is important to your search to
be kept abreast of new homes. We monitor the real
estate market on a daily basis and notify our
buyers of newly listed properties the moment they
come to market. We will help you find all the
best properties for your consideration.
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4. The Offer,
Counter Offers, and Acceptance
You have found the right home and you
are ready to make an offer. Things included in
your offer should be: offer price, terms, conditions
and contingencies that must be met in your purchase.
It is best to submit offers on the standard form for a residential
purchase agreement. A good faith deposit check
is normally submitted with the offer. Your real
estate agent can carefully explain the purchase
agreement to you and fill it out with your complete
understanding. You then initial each page and
sign the contract.
Once the offer is presented to the seller they
may come back with a counter offer. It “stops”
your offer when the seller counters with additional
terms or conditions. You can accept the sellers
offer or make a counter offer of your own. A real
estate transaction often will have one or more
counter offers before the buyer and seller come
to an agreement on price and terms. Your real
estate agent will help you with a counter offer
and insure that you meet all deadlines and conditions.
You have a sales contract once you have reached
a successful negotiation with the seller and an
offer or counter offer is accepted by one of the
parties.
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5. Disclosure,
Disclosure, Disclosure…
The buyer should request the seller and their
agent disclose every material fact known that
may effect your buying decision on the property.
Sellers normally provide such a disclosure to
their agent. It is best to request a copy of this
disclosure when making the purchase offer or immediately
thereafter.
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6. The Physical
Inspection
There is normally a general physical inspection
of the property sometime before opening escrow.
The inspection process is designed to ensure that
you are making an educated buying decision. A
licensed inspector is hired to do a general inspection
of the major systems that relate to the property.
Your realtor can recommend an inspector with whom
they have had good experience with in the past.
The inspection usually costs between $250 and
$600 depending on the home. In some states the
buyer pays for the inspection and in other states
the seller. If defects are found in the
inspection the buyer and seller usually determine
reasonable repairs to be done by the seller or
an adjustment in purchase price. If an agreement
is not made on these issues the contract can be
mutually cancelled.
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7. Opening Escrow
Your purchase agreement including any offers and
counter offers constitutes your contract and initial
instructions to the escrow agent. The escrow agent
acts as a third party and insures that all the
conditions of the sales contract are met as well
as any lenders requirements. They handle all the
paperwork and cash. It is important to have a
good escrow agent to insure that your transaction
closes on time. Your real estate agent can recommend
a good escrow agent they have worked with in the
past. Escrow normally takes between 30 and 60
days. Now is also a good time to line up your
homeowner’s insurance. Recently obtaining
homeowners insurance has become more difficult
and takes more time than in the past.
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8. Leander Requirements
and Final Walk Through
Prior to closing your lender usually requires
a termite report, title insurance policies, and
an appraisal. The seller usually pays for the
termite report. There are normally two title policies,
an owner’s title insurance policy paid by
the seller and a lenders title insurance policy
paid for by the buyer. The buyer’s lender
will also require that the property be appraised
prior to funding. Usually there is not a problem
with the appraisal unless you overpay for the
property. You can protect yourself by stipulating
in your offer that the property must at least
appraise for the purchase price.
A few days before closing you will conduct a final
walk through to insure that the property is in
the same condition as when the physical inspection
was preformed and that any negotiated repairs
etc. are completed.
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9. Closing Escrow
Prior to closing the deal, you need to ensure
that escrow gets a copy of your new home insurance
policy and that any balance of the purchase funds
be deposited with escrow. Escrow will also provide
you with a "Closing Settlement Statement"
which discloses all of your charges (debits) and
credits in the transaction. It is imperative that
you carefully scrutinize this document to ensure
its accuracy. When your loan is fully approved,
escrow requests loan documents from your lender
and schedules a closing date and time to execute
the paperwork.
There is a considerable amount of documents that
will require your signature. For this reason,
the closing session is characteristically known
as a "signing spree". Almost all the
documents are standard forms and not subject to
change. One of life’s most exhilarating
experiences comes after closing when your
agent congratulates you on owning your new home.
Once this session is complete, escrow requests
your loan funds from the lender. Normally, the
day after the loan funds are received, the deed
conveying the title to the Buyer is recorded at
the county recorders office.
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10. Final Notes
Plan your move appropriately and make
sure to give yourself enough time to adequately
pack and unpack. Don't forget to transfer all
utilities into your name including the water if
applicable. Remember that utilities and cable
TV can require several days’ notice. Be
sure to order your new phone service and forward
all of your mail at least one week in advance.
Get references for yard services, housekeepers,
etc. Your agent can assist you in locating
the correct utility companies for your new home.
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