The overall home purchase process hasn’t changed in years, however, the specifics of each step, and customizing your purchase is what changes every year.
1. BUYER CONSULTATION
Whether it’s your first home purchase, or you’ve bought and sold properties before, I always recommend we meet for a consultation so that you have current information available.
The Buyer Consultation we will review the following:
- Purchase Process Overview
- Agency Law – Who represents you in a transaction?
- Wants/Needs Assessment (This is all about YOU!)
- Current Market Conditions for Your selected Area
- We will go into very specifics for each of the following topics below
2. PREQUALIFICATION
It’s important for you, the lender, and the Realtor, to know exactly what is possible, and what isn’t. Remember, just because you qualify for much more, may not mean that you should spend above your budget or your comfort level.
One of the biggest misconceptions today is that you still have to put a down payment of 20%. Most common lending programs now allow for 0%-3.5% minimum down payment amounts, and is some cases, myself with my experienced lenders can pair the loan product with a down payment program to get you into the house with little out of pocket expenses, $500-$1000!
During the consultation we’ll evaluate your financing options, but there’s a purchase strategy that I’ve been using the past 2 years that allows buyer’s to pay cash for their house, then finance after they move in, possibly beating out other offers, after all, Cash is King!
3. HOME SEARCH
When searching for a home the age old saying comes into mind; “Location, Location, Location!”. This will always be the case when looking for a home as need #1. In this section we will run some preliminary searches, and go through what may work for you. Consider the following Acronym when selecting an area, as most every buyer will be influenced by these factors:
F.O.R.D.
F – Family – This may pertain to the distance your new home is to existing family members, friends, or specific school district. This may or may not influence your descision
O – Occupation – Location of work may be influenced by your daily drive to work. Things to consider may be how often you go into the office. Many employers are now splitting work time between in-office, and work from home. We’ve got specialized calculators for drive times as well.
R – Recreation – Work hard, play hard! You may want to be close to different features such as parks, rivers, lakes, or even acreage. Consider your overall lifestyle.
D – Dreams – This may also encompass your overall financial plan. Buy the house of your dreams, or purchase conservatively and retire early? Some may not up north traffic every weekend and choose to combine their up north lakefront home with their primary home, so you have a primary lakefront home!
4. PREVIEWING HOMES
Once we’ve identified your optimum purchase price range, type of home, and location, we’ll schedule showings and preview homes. Here is another benefit of using me as an experienced agent who has built homes and remodeled homes. As we walk through homes, I’ll identify and point out possible problems and concerns that can help you form a pros/cons list of every home to compare properties. Generally we’ll start with 5-6 homes at once and walk through looking at the basic details such as:
- Location: Not just the F.O.R.D. items, but also consider the neighborhood, and neighbors to the house you are viewing. Are they taking care of their properties?
- Layout: This is an expensive item to change. Consider room sizes and useable layout of the home
- Upgrades: Comparing houses will probably make a list of expensive upgrades that are already done, or will have to be paid out of pocket when you move in. Consider getting a home that may be more expensive but major upgrades are completed, rather than getting a fixer-upper that will take out of pocket money and considerable time and contractor hunting.
5. SUBMITTING AN OFFER
Once you’ve identified your home that you want to purchase, we’ll review the following:
- Are there currently any offers on the property? This is valuable information when structuring your offer
- What is the Property Worth, how much to offer? Here we’ll consider time on market as well as recent area sales. Price is only one aspect of the offer, and you may be able to compensate the price with one of the other items listed below.
- Contingencies? Home Inspection, Appraisal, etc. are all items included in the offer for your protectin
- Waivers: We’ll discuss whether it’s in your best interest to waive any contingencies as well as the possible outcomes. Some are waiving home inspections, and others are giving a appraisal guarantee.
- Earnest Money Deposit: This is a deposit that you deposit into an escrow account that tells the seller how serious you are for them to take their property off the market until the property closes, then this money is either returned to you, or credited toward the money you need to bring to closing
- Closing Timeframe: Another benefit of working with me is that I have lenders that can close some loan programs in as little as 2 weeks! This may appeal to a seller who is comparing other financing offers.
- Occupancy: Seller may want to get the deal done quickly so they know the cash is in the bank, before completing their move to their next home. This may be a valuable consideration for the seller, typically 30-45 days is common. However, beyond 60 days of occupancy we will have to consult with the lender, as some loan programs may not allow extended occupancy.
6. INSPECTION
Congratulations! Sometimes getting to this point is easy and sometimes you may have to make multiple offers. Once your offer has been accepted and it’s now time to complete your contingencies (if you have them). Some purchasers are comfortable waiving some contingencies, but I recommend getting the home thoroughly inspected. In an inspection, a majority of the items are repair/maintenance items. I have several qualified and experienced inspectors that I work with and can recommend based on their past performance. Remember: even a new construction home will have items that repaired and need to be maintained, no house is perfect. Everything can be fixed, everything has a price tag for a repair. Majority of these items we should be able to identify prior to making an offer with the exception of sewer drains or septic systems, and the house attic condition and insulation.
7. APPRAISAL
Making it through the offer negotiations and inspection are 2 important milestones. The appraisal is an important step if you are financing your purchase. Offering Cash? On to closing! For those who need an appraisal, this is where the lender will send a licensed appraiser to determine if the value of your home matches the purchase price. Remember, this is solely for the lender to protect their mortgage investment. Generally the value comes in at the same price range for your offer price. The reason for this, is the appraiser has a copy of the purchase agreement, and they are there to justify the valuation for the lender.
8. CLOSING
You are almost done with your home purchase process! During this time, the lender will ask for updated bank statements, paystubs, employer verification, and last minute credit check. Remember: don’t have ANYONE other than the lender run your credit report from the time you sign a loan application, until you leave the closing table. Don’t apply for a new car, new furniture or even a credit card. The lender has to factor all these credit lines and even credit inquiries into your approval. Please don’t make the mistake of compromising your credit and your loan at the last minute!
9. POST CLOSING
Congratulations on closing your new home!! For many this is a life changing event. There are a few documents that have to be recorded after closing, but I’ll either do this for you, or guide you through the process at the local municipality. If you are giving the sellers occupancy, we’ll stay in close contact to coordinate your move.
THANK YOU for your trust and joining the hundreds of past clients that have placed their trust in my skills and expertise to get you into your new home!