Home Buyer's Guide: What You Need to Know
Whether this is your first time purchasing a home or your twentieth investment property, the process of buying a home remains the same. Although it may seem like a daunting task, this guide is here to break it down for you so you know exactly where to start.
First Steps
The biggest step is always the first! Just getting started will get the momentum rolling – and so will getting a real estate professional to help guide you. Using a real estate agent is generally free for buyers, as the sellers pay the commission to both the seller’s and buyer’s agent. Utilize an agent as much as possible as they have all the knowledge to guide you from start to finish. You may have a real estate agent that you have always wanted to use, or you may want to interview several. It is important to make sure you are both comfortable with each other.
As your agent, I will direct you to obtain a pre-approval from a mortgage lender. This letter will state how much you are qualified for. Pre-approvals are only valid for 30-90 days, so while you can start talking to lenders, you’ll want to wait to get a pre-approval letter until you’re ready to buy. Once one lender pulls credit, you have 45 days to interview other lenders where they can pull credit as well but it doesn’t affect your score.
Once we know your budget, we will review your home needs analysis. This will include what area you want to live in, the number of beds and bathrooms, the type of home and yard, etc. It is important to be lenient because if we set to many stipulations, it will limit the amount of homes you will see.
Home Search
Once we discuss your home needs, I will set up an automatic search through the Multiple Listing Service (MLS), which is the database Realtors use to list and search for homes. The moment a home that fits your search criteria is listed for sale, it will be sent directly to your email. If you like a home that you see online, drive by it to see if you like the location and lot before we schedule an appointment to see it inside. Remember, the lot and location are two things you cannot change so make sure you like both!
Don’t get distracted by bad paint colors, decor, or staging. These are all things that can be easily changed. Pay attention to floor layout, room sizes, and finishes of the home. Remember - this is a marathon, not a sprint! You do not want buyer’s remorse on a house. As your agent, I am here to show you as many houses as you wish. As we tour homes, it is perfectly normal to change your home needs as you will see things in homes you didn’t think about that you want or don’t want.
As we narrow down the search, you will finally find a house you can see yourself in – so now it is time to write an offer!
Writing an Offer
Writing an offer can be one of the most daunting and exciting parts of buying a house. As your agent, I will meet with you to review and complete all necessary paperwork. We submit the following forms to the seller’s agent when submitting an offer:
Pre-approval or Bank Letter if Cash
Agreement of Sale (AOS)
Buyer’s Financial Statement
Executed Seller’s Property Disclosure Statement
Deposit Money Notice and Photo of Deposit Check
Lead-Based Paint Disclosure Form if Applicable
Once the seller receives the offer, they have to let us know if they accept, deny, or will negotiate with us by the date that we assigned in the AOS. If both the seller and buyer agree to move forward, you will both sign the AOS and you’ll officially be under contract!
Under Contract
Congratulations! You are officially under contract. Now, we will work to remove all contingencies in the contract before the settlement date. Contingencies include items like collecting deposits, conducting and resolving inspection issues, issuing appraisals, getting your mortgage commitment, and ensuring a clear title of the home.
As your real estate agent, I will ensure that all these items are being handled and deadlines are being met by the various parties completing them. Once all contingencies are removed, we are cleared to close!
Final Days
In the days leading up to settlement, we will be issued a settlement statement, also known as an ALTA, that will list all the debits and credits to the buyers and sellers. Once we review that sheet to make sure that is correct, your mortgage company (or title if cash buyer) will give you instructions for transferring money for closing.
At settlement, there will be your agent, mortgage lender, title professional, and sometimes the sellers come as well. The mortgage lender will have you sign any necessary paperwork that is left as well as explain your mortgage to you. The title company will make sure that you sign the paperwork to transfer the deed. Once all signatures are obtained, you will officially own the home! Congrats!
