 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
The Home Buying Process
Buying a home can be one of the most exciting things you ever do, or it can be one of your biggest nightmares. How you experience the home buying process depends entirely on how well prepared you are and how knowledgeable the people helping you are. The following should clear up a lot of confusion you may have.
This is probably the most important step in the process.
You will be in partnership with your Agent.
You will be confiding in him on a business level and often on a personal level.
He will be the one to help you with any problems that crop up along the way.
He is the key to you finding what you want , in the area you want and for the price you want.
Look for someone you feel comfortable with and who is experienced and knowledgeable.
Do not be afraid to ask for references, most Agents are used to this and will not object.
Once you select someone you feel good about working with, sign him up as a Buyer's Agent.
It is very important that your Agent is representing you exclusively.
A very important step in the process, this is where you and your Agent prepare each other for exactly what to expect along the way. The following are the points that should be covered and fully understood in this meeting: exactly what your needs are (bedrooms, baths, etc.), where are the areas you want to look, what price range you are comfortable with and what your time line is. It generally takes 30-60 days from contract to settlement. Another thing to consider is how often you are available to look and what you expect from your Agent in terms of availability and communication (e-mail, phone, FAX). Your Agent should give you references for lenders, usually three. He should explain the difference between the various loan programs available and anything else that you might be confused about. Your Agent should give you copies of all the paperwork you will be expected to sign throughout the process and briefly explain what each form is for. Your Agents should explain Buyer Brokerage vs. Seller's Representation, and you should sign a Buyer Broker Agreement.
Most people, when selecting a lender, call various lending institutions to check on rates and generally go with the lender with the lowest rates.
You should choose a lender who has been referred to you either by your Agent or someone who has actually gone through the entire loan process with that lending institution and loan officer.
The loan officer is just as important, if not more important, than the lending institution.
Most lending institutions offer the same basic loan programs (conventional fixed rate, FHA, VA, etc.), but each might offer special products.
For example, some lenders specialize in low down payment loans, some specialize in loans for people with marginal credit, some specialize in loans for self-employed borrowers, etc.
Your Agent will know how to steer you in the right direction.
You will want to meet with the loan officer as soon as possible to make sure you understand every aspect of the loan process.
The best strategy is to get pre-approved.
It is simple to do.
Most lenders can get you approved for a loan even before you have selected a home.
Your loan will be approved, pending an appraisal of the property.
Pre-approval makes you, the buyer, much more comfortable knowing that you won't find your dream home only to have the loan turned down.
The seller is also much more likely to deal with you on the sales price if he/she knows that you are a serious, qualified buyer.
You should leave the lender meeting with a clear understanding of what your complete monthly payments will be, a pretty good estimate of how much cash you will need (from beginning to end) and what supporting documentation you will need to furnish to the lender.
This is the fun part!
It is important to limit the number of homes you are looking at in a day.
If you look at too many homes, they begin to run together and you can't remember one from another.
It is a good idea to use a checklist to help you track the properties you have seen.
It is also helpful to actually begin to narrow down the properties after each visit.
For example, if house #3 was better than house #2, immediately eliminate house #2.
Remember, communication with your Agent is crucial.
It is important to let him know which houses you like and why, as well as which houses you don't like and why.
Sometimes it takes going out and looking one time before you and your Agent really have a good grip on exactly what you are looking for.
Call your Agent and have him do the research on any properties that are being advertised that look interesting to you, that's what he's getting paid for.
A lot of new homes sites won't let you return with an Agent if you visit the site the first time on your own, so wait for your Agent before you look at new homes.
If you should become interested in a For Sale by Owner (FSBO), ask your Agent to contact the seller, before you do, to see if the seller will cooperate (pay a commission) with a Buyer's Agent.
Once you've narrowed your search down to one or two homes that you really like, you're Agent will do whatever research necessary to help you make your decision, but the decision will ultimately be yours and pretty easy to make. School reports are generally available and can give you lots of good information.
Buyers are welcome to call the local Chambers of Commerce for any statistics they might be interested in.
Local zoning & planning offices are a good source for future road plans, etc.
Once you've selected one home to focus on, your Agent will do a Comparative Market Analysis on that property.
This involves determining "fair market value" by looking at what other buyers were willing to pay for properties similar to yours in the same neighborhood.
When making an offer on a property it is important to decide ahead of time how much you are willing to pay and at what terms. Since you already know what fair market value is, now you have to decide: what price will you offer, how much earnest money deposit you will offer, what personal property you wish to have conveyed (everything is negotiable), how much you are asking the seller to pay towards your closing costs, when you plan to settle (close the deal) and what inspections you plan to have done. When negotiating with any seller, it is best to remember not to take anything personally.
Also, try to put yourself in the seller's shoes.
Figure out what's not negotiable to you and be willing to give a little on the things that are negotiable.
Your Agent should be able to give tons of advice as to how to structure your offer.
Once your offer has been presented, the seller will either accept your offer outright, reject your offer outright, or counter your offer.
The counter process can go back and forth many times.
It's important for all parties to keep their cool and focus on the goal.
Once the buyer and the seller agree to all the terms, you will then have what is called a Ratified Contract.
Timelines in the contract begin ticking at this point.
If, as part of your offer, you asked for time to be allowed to have inspections done to the property, you have written what is called a contingent offer.
Offers can be contingent on loan approval, inspections, the receipt of acceptable home owners or condo association disclosure packets, the sale of property and many other things.
It is important that all deadlines be met and that all contingencies are removed exactly the way the contract calls for.
Your Agent is responsible for making sure this is done.
The sales contract will dictate who gets to choose an attorney to represent the transaction.
Usually it is the buyers decision.
If you don't know an attorney or a title company, your Agent can recommend someone.
The attorney will take care of ordering a survey, title insurance, title search, and drawing up all the documentation.
They will also conduct settlement.
Most people don't know that the attorney or title company doesn't actually represent the buyer, they represent the sales contract.
Their job is to make sure that all the terms that have been previously agreed to, get met.
If any problems that require representation were to arise, each party would need to hire their own attorney.
Most sales contracts will give the buyer the right to one pre-settlement inspection.
This is your last chance to find any problems and have the seller correct them.
Read the contract carefully, but most contracts read that all electrical systems, plumbing, appliances, heating & air conditioning need to be in working order at time of settlement.
These are the items you check for at walk-through.
You are also checking for any other items the seller previously agreed to fix or replace.
If anything is found to be defective or missing, there are several options: the seller can remedy the problem prior to settlement, the seller can credit you the amount of money it would take to hire someone to remedy the problem, or the seller can promise to correct the problem and place into escrow with the attorney the amount of money you will need to pay someone else if the seller does not perform as promised.
This is the day you "sign your life away", as most clients say!
Not really.
You will be signing all the loan documentation, which can seem never ending.
The person conducting settlement should be able to explain every document to you in a satisfactory manner.
Do not ever feel intimidated.
If you don't understand...don't sign.
Your Agent will help your understand everything.
If you like, you can request blank copies of the documents you will be signing in advance so that you can carefully review them.
You will have to present whatever down payment and closing cost funds you were expected to pay.
This check must be certified, they will not accept a personal check.
This is the last and probably the hardest step in the home buying process!
A little bit of planning and forethought, though, will make for a much smoother move.
You will want to make arrangements with a moving company as soon as you can.
Call at least two to get competitive quotes.
They will usually ask to come to your home to get an idea of how much they will be moving and how much distance they will need to travel.
Be sure to change your address with the Postal Service, your banks and any creditors at least 30 days in advance.
To avoid late payments, it's a good idea to actually call and verify receipt of the address change whenever possible.
Call to order your utility, phone, cable hook ups approximately 10 days prior to your move.
|
|
||||||||||||||||||||||||||||||||||||
 |
|