The Purchase Process

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The Purchase Process

Purchasing a home has several processes involved and more that one person that work to get the transaction completed. Here is a basic overview of the process of purchasing a home. My goal is to make the purchase process simple and as organized as possible. Following these steps and recommendations are designed to help you the homebuyer.

  1. Pre-qualification
  2. Home search consultation
  3. Preview homes
  4. Offer preparation
  5. Negotiation and Acceptance
  6. Inspection
  7. Closing Process

Pre-Qualification

During pre-qualification, I will setup a meeting to go through financing with a preferred lender that is best suited to handle your needs. Together we will determine a monthly budget that you are comfortable, and present different loan programs that are available. We will also run a preliminary credit report to determine if there are any negative items that can be removed. For this reason, we suggest running a preliminary credit report 3-6 months before you are ready to purchase, so these items can be removed, and your credit will have time to adjust.

Home Search Consultation

During our initial consultation, I prefer to sit down with my clients and go through the home purchsase process and see what expectations you have, and answer any questions. Purchasing a home in the last year, has been drastically different than previous years. To ensure a smooth process, we want to make sure everyone in the process has the same expectations. During this interview, we will determine your home needs, and the items you don't necessarily need, but want. From there we will arrange some times to go preview properties. Remember, utilizing a buyer agent to represent your best interests, I can show you any property that is on the market, at no cost to you. My commission is paid by the seller.

Preview Homes

Once we have determined your home needs, we will go preview homes. For all my buyer clients, I make a custom comparison sheet for each home so that you can use a quick checklist to rate each home. I will also offer suggestions as we are previewing homes based on the criteria you are interested. Several buyers prefer to preview homes during evening and weekends, but I'm not opposed to showings during the day as well. I recommend giving your list of homes at least 1 day in advance for scheduling time and preparation. If you are looking in an area and price range that has many foreclosures, I can even preview the newer foreclosures, just in case we need to arrange an immediate showing for you. The best foreclosure deals are usually sold within the first week on the market.

Offer Preparation

Once you have identified the home that you want to write an offer, I will get the necessary discosures and addendums from the seller, and we will go through the offer paperwork. I will research solds within the past year for the immediate square mile that the property is located, so we can see all the sold properties, and how much they sold for. I will also give the home information to the lender, and they can give a prelimiinary estimate of your payment and closing cost information. We will also verify current property tax homestead rate, and give an estimate of future tax increase. While there is no definite way of showing what the future property taxes will be, we can usually produce some examples in the same area so you have an idea.

Negotiation

During negotiation we will formulate a plan that is reasonable and realistic. We will consider different aspects, whether the property is bank owned, private owned, or if there are other offers on the property. We will also consider condition of the property as well as area solds that support our offer price. If the property needs some repair, I have qualified contractor prices that will help you with your pricing. Usually with a private owned home, you can expect to get an answer to your offer in 1-3 days, either an acceptance or a counter offer. Bank owned offer responses generally range from 48hrs to 1 week.

Inspection

Unless you are comfortable without an inspection, I usually submit all my offers with an inspection contengency that gives you a week to inspect the property as you see fit following offer acceptance. I have recommended inspection professionals that complete several inspections every week and have a routine process for identifying repair items as well as major problems that need to be repaired. Keep in mind that every home is going to have repair items, even new construction homes. What you are looking for, is major items that can be very costly. If you are inspecting a bank owned property, be prepared to turn the utilities on, in your name, for the inspection, so the inspector can properly inspect the homes. Occasionally the utilities are on, but most of the time they are not, and the banks are not negotiable on this. Banks also will usually not negotiate any further if there are repairs that are needed to the property. Most will tell you upfront in there addendum that the property is "as-is" and they will make no repairs. Most banks won't even make a $1,000 repair, even if they received $10,000 more in asking price! Seems backwards, but it's the reality of how banks negotiate.

Closing Process

Following your acceptance of the home inspection, the lender will request you to submit updated copies of all necessary documents that are pertinant to your financing program, and sign necessary documents to process your loan, and order an appraisal. During this time, an appraiser will verify property worth, and the title company will research title to ensure that title is free and clear from any leins, and that all property taxes are paid. The buyer is responsible for supplying all necessary documents to the lender, and starting to research property insurance that has to be purchased before closing. After closing your next year of property insurance will be paid from the mortgage escrow account. I will also notifiy the buyer when it is time to schedule a utility transfer, and a final walk through of the property, so we can make sure the property is in the same condition as when you submitted your offer.

Closing

Closing generally takes about 1 hour, and there are real estate documents as well as mortgage documents that need to be signed. With bank owned properties, you may not be able to get keys the same day of closing, possibly the day after.

 

For reading purposes, I tried to keep each of these items shortened to the basics, but I could really write a full page on each item on everything that needs to be considered. Most items I will inform you about as we are going through the process. If you have any questions, don't hesitate to ask, I sell real estate every day, and I'm familiar with the process, but don't hesitate to ask several times if you forget an item, I'm here to help you!!