BUYER TIPS
STEP 1 - CREATE YOUR PROPERTY WISH LIST
While your opinions on the type of home you want to own may change during the homebuying process, use this easy checklist to help you set your priorities and make the shopping process less time-consuming.
* What neighborhoods would you prefer?
* What school systems do you want to be near?
How close do you need to be to, public transportation, schools, the airport, the expressway, neighborhood shopping, or other?
* What architectural style(s) of homes do you prefer?
* Do you want a one-story or two-story house?
* How old a home would you consider?
* How much repair or renovation would you be willing to do?
* Do you have special facilities or needs that your home must meet?
* Do you require a fenced yard or other amenities for your pets?
Prioritize each of the following as such:
MUST HAVE WOULD PREFER
Yard (size _____ )
Garage (size _____ )
Patio/Deck
Pool
Bedrooms (number _____ )
Bathrooms (number _____ ) -
Family Room -
Formal Living Room -
Formal Dining Room -
Eat-In kitchen -
Laundry Room -
Basement -
Fireplace -
Spa In Bath -
Hardwood Floors -
STEP 2 - GET PRE-QUALIFIED AND/OR PRE-APPROVED
Now that you have your list of features you want in your new home and neighborhood, you are ready to start looking! Well, not just yet. You are going to need to know in what price range to look. Your agent can certainly give you a rough idea, but it's always best to talk with a mortgage professional. They can either get you pre-qualified or pre-approved for a mortgage.
There are some key differences between pre-qualification and pre-approval for a loan that you need to be aware of. Loan pre-qualification is a simple process. It takes into account very basic information regarding your financial status and gives you an amount for which you may qualify. This can be done strictly on a verbal level or electronically over the Internet. The pre-qualified amount is based solely on the information you provide. In most markets, pre-qualified buyers usually hold little clout compared to pre-approved buyers due to the fact that the information given during the pre-qualification process is not thoroughly investigated and therefore may be unreliable. Where a pre-approved buyer is actually approved for a loan of a certain amount, a pre-qualified buyer is only told that they might be approved for a certain amount.
Pre-approval is a much more involved process. The lender will take all pertinent information regarding your finances and perform an extensive check on your current financial status. This will ultimately give you the exact amount that you will be eligible for (depending on what type of loan you decide to go with). Being pre-approved lets the seller know that you have gone through an extensive financial background check and there should be no unexpected obstacles to buying the home. You can see how being pre-approved would be more attractive to a seller than just being pre-qualified.
Work with your agent to decide what is best for you.
STEP 3 - GO LOOK AT HOMES!
At this point you and your real estate agent will have a good idea of what you can afford and the type of area you will want to invest in. Taking that information into consideration, you are ready to embark on your property search. Your agent will use all this information to search the multiple listing services and develop a list of properties that meets your criteria. Together with your agent, you can review all the listing information, including on-line photos and tours, and agree on the homes that you would like to view in person. Your agent will make all the arrangements and appointments for you to tour your selected homes.
You can also access local publications highlighting available real estate in the area; contact and visit the local Chamber of Commerce, look on the Internet; and even drive through areas that you feel would meet your needs. Driving around a particular area looking for properties for sale is good because you can actually see the property. However it can be very time consuming and it is a "hit or miss" process.
STEP 4 - MAKE AN OFFER
Now that you and your real estate agent have found the home you would like to purchase, it's time to make an offer. Taking into account the recent sales of homes in that neighborhood which are similar in size, quality, conveniences, and amenities, what are you willing to pay for the home? Your real estate agent will consult with you and advise you on how to create an offer that will have the best chance of being accepted.
Your agent will ensure that you have everything down in written form... no verbal agreements. After consulting with your agent to put your offer in a written contract that meets all the legal requirements according to local and national guidelines, your agent will present the seller with a written document detailing what needs to be done by both parties to execute the transaction. The contract should protect the best interests of all parties involved and should be comprehensive in nature.
Remember that the legalities of this phase are very important. If you have any questions or concerns, they need to be addressed right away.
STEP 5 - NEGOTIATE
Once your offer is made, you and your real estate agent may need to enter some negotiation in order to reach an agreement. Keep in mind that almost everything is negotiable when you are buying a house. This can give you a great deal of leverage in the buying process -- that is, if you have adequate information and you use it in an appropriate manner. Your agent will have the market knowledge and negotiating expertise necessary to make sure that your offer is accepted at the best price and terms possible for you.
Some of the things that you may have to negotiate are:
* The price
* Financing
* Closing costs
* Repairs that need to be done
* Appliances and fixtures
* Painting
* Occupancy time frame
STEP 6 - FIND THE OTHER PROFESSIONALS YOU NEED
After your offer has been accepted, your agent will supervise the coordination of all necessary vendors and serve as your advocate when working with each vendor. Your agent will make sure that the vendors have access to the property at the appropriate times to perform their procedures and oversee the execution of those procedures on your behalf.
For instance, the property will need a thorough examination. Working with your lender, you may need to have a formal appraisal and a survey done for the property designated in the contract. A property inspection, a foundation inspection, and an environmental inspection may also need to be completed to make sure that the property is up to the standards set forth in your written agreement. If there are issues or inconsistencies brought to light during this time, it may delay or even nullify the contract depending on the contingencies set forth in the contract.
Homeowner insurance is another very important item that will need to be taken care of at this point. Insurance experts recommend that you obtain insurance equal to the full replacement value of the home. Unless you have insurance coverage on the home, the closing can not proceed. Having these procedures done in a timely and professional manner is a must. Investigate each vendor to make sure that they are reputable and have a clean operational history.
Your agent's experience in this area will be invaluable in making sure that everything is completed on time and in a professional and legal manner.
STEP 7 - PREPARE FOR THE CLOSING
Your real estate agent will contact the closing attorney and your lender to make sure that all the necessary documents are being prepared, and that they are complete, accurate, and delivered in a timely manner. Your agent will also need to confirm that the documents will be delivered to the correct location so they can be reviewed and that they will be ready for the appropriate closing date.
A few days prior to closing, you will need to make arrangements to have your local services such as electricity, cable, and phone set up in your name. Your real estate agent can help you coordinate the set-up of these local services. No doubt your agent already knows who the local vendors are for such services as water and electricity, as well as others, so he or she can help provide you with a list of contacts.
You should make arrangements to have the necessary funds available on closing day. Typically, you will need to obtain a cashier's check from your bank. The check should be made out to you for the estimated amount needed at closing.
Be sure to confirm with your agent the time and location of the closing. Your agent can provide you with a map to the closing location if you wish. Be sure to allow at least 2 hours for the closing process.
STEP 8 - THE CLOSING
On the day of closing, be sure to bring: your driver's license, the cashier's check, proof of insurance on the home you are purchasing, and any other documents your agent has requested.
"Closing" refers to the meeting where ownership of the property is legally transferred to the buyer. It is a formal meeting in which most parties involved in the buying/selling process will attend. Closing procedures are usually held at the closing attorney's office. Your closing attorney coordinates the document signing and the collection and disbursement of funds. Your agent will be present at your closing to read the documents on your behalf, answer any questions, or help to resolve any last minute or unexpected details that may come up.
In order for the closing to go smoothly, each party involved should bring the necessary documentation and be prepared to pay any related fees (closing costs). Closing costs will generally total an amount equal to 2 to 3 percent of the total loan value, not including down payment and the buyer's escrow account. You will be asked to endorse the cashier's check to pay for your portion of the costs.
Sellers sometimes pay for a portion or all of the closing costs, depending on local market conditions, terms of the purchase contract, and the seller's cash and timing considerations. Any such concessions will have already been established in writing during the offer & negotiating steps.
Congratulations on the purchase of your new home!
Be sure to keep all your closing documents in a safe place. Don't forget to make a note on your calendar for the due date of first mortgage payment.
Now comes the moving!