Purchasing a property is most likely the biggest financial decision you will ever make and an excellent investment! Whether this is your first purchase, or you are an experienced buyer, this decision must be made carefully.
WHY DO YOU WANT TO BUY?
- Are you tired of paying rent and being told what you can and cannot have? Become a homeowner!
- Need more places to hide from your kids? Time for a bigger home!
- Adult children not quite getting the hint that it’s time to move out…downsizing is the option!
- Has your income grown? Time to buy a bigger shack!
- Are you looking for a proven way to build equity? Start an investment portfolio with your first or fifteenth rental or commercial property.
- Would you like a larger yard? Hate your neighbors? We’ll help you find new ones….or ones you never have to see!
- Do you want to shorten your commute? Work from home!
- Would you rather live in a different area? We’ll help you break out of this joint!
As you can see, having a clear sense of your reasons for buying will help you choose the right property.
Before you start shopping for your property, it is a good idea to make sure your ducks are in a row…. financially speaking, that is. If you’re paying in cash, then sit back, have some pie and skip to the next section. If you’ll need to obtain financing, grab a cup of joe and gather all of your important financial documents and select a lender. We are happy to recommend knowledgeable lenders in our area who are experienced in the residential, commercial, vacant land and investment real estate fields (we just might know a few good ones 😉 )
You’ll need to obtain a pre-approval letter from your lender of choice prior to getting started. This will help you determine what purchase price you are most comfortable with as well as what your monthly payments will be. The most common documents needed to secure financing are:
- Financial statements
- Bank accounts
- Credit cards
- Auto loans
- Recent pay stubs
- Tax returns from the past two years
- Copies of leases for all current investment properties
- 401K statements, life insurance, stocks, bonds, and mutual account information.
- Anything and everything that is somehow tied to your money (yes, that includes the money under your mattress)
CHECK YOUR CREDIT RATING.
Your credit score will have a huge impact on what type of property you can buy, and at what price. Your lender will do this for you! He/she will obtain and review your credit ratings from the three credit reporting agencies Equifax, Experian and Trans Union and guide you in the right direction amongst the many different types of financing options available.
BE CAREFUL WITH YOUR FINANCES.
Now is not a good time to make sudden career changes or large purchases. You want to approach your property purchase from a position of financial stability…so the yacht will have to wait!
You’ve chosen us! Excellent choice! We won’t let you down! We’ll ask you to sign a Buyer Agency Representation Agreement with us to solidify our working relationship and then…it’s time to shop!
Now that you’ve taken care of all the preparations and have your preapproval in hand, LET THE FUN BEGIN!! We will start sending you homes based on the criteria that we have established together. The more precise and direct you are with us, the more successful our search will be.
TAKE A DRIVE.
Get to know the neighborhoods and subdivisions that interest you. Drive around and get a feel for what it would be like to own a property in those areas.
NARROW YOUR SEARCH.
Select a few properties that interest you the most and we’ll set up a time to walk through them with you. We’ll guide you on the many different aspects to consider in choosing the right property, such as the potential long-term resale value and design/functionality ideas to fit your family’s needs.
THE PERSONAL VS. REAL PROPERTY DILEMMA
The distinction between personal property and real property can be the source of confusion in a real estate transaction. A purchase contract is normally written to include all real property; that is, all aspects of the property that are fastened down or an integral part of the structure. For example, this would include light fixtures, drapery rods, attached mirrors, trees and shrubs in the ground. It would not include potted plants, free-standing refrigerators, washer/dryers, bookcases, swag lamps, etc.
If there is any uncertainty whether an item is included in the sale or not, it is best to be sure that the particular item is mentioned in the purchase agreement as being included or excluded.
TIME TO BUY!
Once you have picked out the property you want to purchase, as your designated buyer’s agents, we’ll do the necessary research to help structure a successful offer. Furthermore, we’ll advise you on protective contingencies, customary practices, and local regulations.
We will present your offer to the seller and the seller’s agent. The sellers have three options: they can accept your offer (WOOHOO!), counter your offer (okay, okay…we can work with this), or reject your offer (moving on!). We will review the seller’s response with you and help you make the best decision.
The countdown begins! Any deadlines agreed upon in the offer start counting from the day of acceptance of the offer. This is the time allotted to you to obtain financing, perform inspections, and satisfy any other contingencies to which your offer is subject. Here are some things you can expect:
- At this time, you will need to provide an earnest money deposit which usually ranges anywhere from 1% – 2% of the purchase price. This deposit check will be cashed, held in the trust account of the listing broker, and then credited back to you at closing.
- You’ll need to select an inspector and schedule an appointment for any inspections/testing agreed upon in the offer. We have recommendations if you need them. See additional details on the home inspection process below.
- Following the home inspection, we’ll both receive a copy of the inspection report to review.
- We’ll discuss the details and any concerns you have and prepare a request for repairs to send to the seller (if applicable).
- The seller can accept or reject our request for repairs at which point some more negotiating may be needed.
- You will need to select an insurance provider for your property and further provide that documentation to your lender for approval.
- We will receive a “preliminary title report” disclosing any potential defects in the title or any liens or judgements, if there are any outstanding.
- Your lender will order an appraisal on the property to validate the accepted purchase price. Once received, your lender will share a copy with you.
- Once your lender has received all necessary documentation and underwriting has reviewed and approved of it, you will receive a final “Loan Commitment” as evidence to the seller that your financing has officially been secured.
- You’ll get the opportunity to take one last walkthrough of the property just prior to closing. This is more of a formality than anything else but is a good time to verify any agreed upon repairs have been completed, everything is the same as when you last viewed the property, there are no extra items left behind, and everything included in your purchase still remains.
THE INSPECTION PROCESS
WHEN YOU MAKE AN OFFER ON A HOME
Your offer will likely contain provisions allowing you various inspections of the property. The purpose of these inspections is to educate you as to the physical condition of the property you are purchasing. While these inspections do not provide guarantees of the condition of the property, they do provide valuable information to you as a Buyer. It is important to remember that your offer may provide for withdrawal from the contract if these reports are unsatisfactory to you, but inspections should not be considered an open door to renegotiate the purchase price.
Your offer will specify who is responsible for the cost of any inspections and/or testing. We will advise you as to what is customary and prudent.
WHAT IS INSPECTED
The Home Inspection covers items such as exterior siding, paint, flooring, appliances, water heater, furnace, electrical service, plumbing, and other visible features of the property. This is a general inspection and can call for additional inspections by specific trades if needed. Underground sprinkler systems, washers, dryers and central air conditioning units (depending on the time of year) are not generally inspected.
When all of the conditions of the offer have been met, we will contact you to schedule a closing time.
The closing agent will furnish all parties involved with a settlement statement, which summarizes and details the financial transactions enacted in the process. You and the seller(s) will sign this statement, as well as the closing agent, certifying its accuracy. If you are obtaining financing, you will have to sign all pertinent documentation required by the lending institution. If you are bringing funds to the transaction, you can elect to either have the funds wired electronically into the closing agent’s escrow account or bring a certified bank check to the closing in the amount specified on the settlement statement. The seller will arrange to have all property keys and any other important information for you at the closing.
A congratulations is now in order and you can take ownership of your new home!!