Congratulations on your decision to buy a home! It’s an exciting time, and the right agent can help you to make this a fun and successful experience. Whether you are a first time home buyer or an experienced investor, I look forward to helping you achieve your real estate goals!
In this section, I describe the steps involved in purchasing a home and what you can expect.
Steps to Home Ownership
Obtaining pre-approval for a home loan is the critical first step in the home purchase process. Pre-approval helps you to determine what you can afford and how much you’ll need for a down payment and closing costs, thereby eliminating surprises and disappointments. Pre-approval also shows sellers that you are a serious and motivated buyer, ensuring your offer is taken seriously. Please view my financing page to learn more about this important step.
Your new home will most likely be the largest purchase of your life, and the right agent can help to streamline the process and make it an enjoyable experience for you. Skilled agents are knowledgeable in the geographical area, market trends, home construction, contracts, negotiations, financing options, real estate law principles, inspections, the closing process, and much more. Best of all, as a buyer, there is no cost to you to have a skilled agent represent your best interests in the purchase process as the seller typically pays a commission to both the listing and buyer agents. Because my business is built through reputation and referrals, your satisfaction will always be my ultimate goal.
With loan pre-approval and a skilled agent in place, you are now ready to begin the search for your new home. It is helpful to identify those things you consider an absolute must in your new home, and those things that you consider nice to have but optional. For example, you might decide that your home must have at least three bedrooms, two bathrooms, a two-car garage, and be no more than 30 miles from your workplace. At the same time, you might prefer to have a wood burning fireplace and a mountain view, but consider those features optional and not a minimum requirement for properties you would like to view. The more specific you can be about your desired home attributes, the fewer the homes that will match your search, but the more accurate the results. By using resources such as the Multiple Listing Service (MLS), a search can be conducted for properties based on various criteria. I can help you to locate properties that match your specific requirements.
Once you find your ideal home, it is time to make an offer. I will help you to determine the ideal offer by analyzing the asking price, comparable sales, and any known issues disclosed by the seller. To protect you in this transaction, your offer should be contingent upon your ability to secure financing and a satisfactory home inspection. Other contingencies might include your request to have the seller address specific issues with the home, but you can also address those issues by adjusting your offer to compensate for that future expense.
After an offer is submitted, the seller can either accept, reject, or counter your offer. If a seller presents a counter offer to you, then it might include a higher purchase price than what was offered by you or an alternate means of addressing a contingency (e.g., reducing the purchase price by $1000 rather than performing a $1000 repair). When you receive a counter offer, it is now your turn to either accept, reject, or counter the seller’s offer. This process could go back and forth a few times, but a motivated buyer and seller can generally come to agreement quickly.
Once an offer has been accepted, it’s now time to perform your due diligence. While a home inspection is not required, it is highly recommended. A home inspection will uncover any issues that were unknown to or not disclosed by the seller. Because your purchase should be contingent upon a satisfactory inspection, this is your opportunity to obtain peace of mind, have any issues addressed by the seller, or simply walk away from the transaction. You can further solidify your peace of mind by purchasing a home warranty (not to be confused with home owner’s insurance), which generally covers unexpected repairs during the first year of home ownership. As your agent, I will be present during any inspections to ensure your best interests are represented.
While some buyers purchase with cash, most require a bank loan in which case, your home will serve as the security for your debt. The lender will protect its investment by requiring that the property be appraised to ensure its value is sufficient to secure the amount of the loan. The appraiser will conduct a process similar to that performed by me and the seller’s agent to determine the market value of the home. The appraiser’s objective is to determine whether the value is sufficient to protect the lender, not to discover some hidden extra value in the home. The appraised value will most likely match that of the agreed upon purchase price. As your agent, I will be present during the appraiser’s inspection of the home.
Once the home is appraised, the lender will finalize your loan, complete the paperwork, and prepare the funds for closing. Because you are pre-approved, you will already know the loan terms and closing costs, so there should be no surprises here.
The closing process is where everything comes together and the transaction is completed. The closing agent is typically an escrow officer with a title company. Simply put, the seller submits the deed, the buyer and his lender submit funds, and the escrow officer manages the distribution of those funds and the recording of the deed. The escrow process will be based on the instructions provided in the purchase and sale agreement, which includes the closing date agreed upon by the buyer and seller. Escrow ensures that both parties are protected, that the transaction will occur as agreed, and does not require either party to be present.
Unless you made other arrangements with the seller, such as renting the home back to her for one week, you can expect to take possession of the home on the day of closing. Congratulations, you are a home owner!
Please contact me today if you are ready to make home ownership a reality!