Important Guidelines to Follow When Purchasing a Home
The home buying process from A to Z!
I had no comprehension of what stress was – until I bought a house. When I bought my first house I was not in real estate at the time and I found the process to be both exciting and overwhelming. The stress happened as a result of lack of understanding of the home buying process and a lack of communication between myself and my REALTOR. The following is a step by step guide in what to expect on your journey towards the purchase of your home!
Your Dream Home: The first step in buying a home is for your REALTOR to know the basics of your wants and needs. This is the qualifying process. How many bedrooms and bathrooms do you need? What location are you looking for? What is your price range? These are a few of the questions you should ponder in preparation for your home buying journey. A good agent will ask you these questions plus others to better pinpoint your true needs and to show you the most appropriate homes. The qualifying process saves you time and frustration by limiting the homes you see to those most appropriate for your needs. It’s also a dynamic process in that once you get out to see these homes your opinion of what’s most important may change. That’s normal and an understanding REALTOR will make the adjustments as they occur.
The Money Factor: You finally find your dream home and are ready to place your offer only to find out there is an offer coming from another buyer. Cases such as this are quite common with nice homes that are priced right. Other than offering thousands more than the asking price how do you make sure your offer is the one that gets accepted?
If you have not already been “pre-approved,” it is extremely important that you apply for a mortgage early in the home buying process. A lot of buyers talk to a lender to get “pre-qualified” but do not take the next step in getting “pre-approved.” In a competitive offer situation as described above, if you are fully approved for your loan and the other buyer has only been “pre-qualified,” your offer will receive more attention giving you a considerable edge over the other buyer.
What’s involved with getting pre-approved? Just a short meeting with a lender of your choice along with submitting a loan application. Most lenders will only charge a small fee up front to cover the credit check. In addition, lending institutions will require fees (to be paid at the time of purchase) for an appraisal of the property. The lending institution will require information concerning current income and obligations (bank account and charge account numbers). The lending agency will then verify this information. For more information see: How do you apply for a mortgage?
Need help finding a lender? There are a lot of options out there and I would be happy to suggest a lender for you based on your planned length of stay in your home, credit rating, etc.
House To House: The next step is the actual home search process which can be done in one of several different ways. If you are not quite ready to commit to a REALTOR you can still get information on homes that are for sale in the area by using the Internet, ad publications and just plain driving around. If you are ready to use a REALTOR you can get up-to-the minute information on homes for sale that have not yet been published in the other media. Usually there is a 24 to 48 hour delay in Multiple Listing Service postings to the Internet and up to a 12 day delay with the printed ad publications. Also in certain circumstances a REALTOR may also know of a home that is about to come on the market giving you a big head start over the buyers that are searching on their own.
As you go through each property you are free to inspect all facets of a home during its showing. It may be a good idea to note any comments you have about each home in order to provide your agent with feedback for the best possible service.
Time for An Offer: After an offer is written, your agent will contact the listing salesperson and set up an appointment to present the offer to the homeowners.
The sellers then have the following alternatives.
- Accept the offer as presented.
- Reject the offer.
- Counter (a change in price, date, personal property, etc.)
If a counter is made, you have the same three alternatives: accept, reject, or counter. Only when the seller accepts your offer and you accept his do you have a binding contract for sale.
Inspect and Reject: Unless the home has been pre-inspected, your offer should be contingent on a “home inspection”. After you have negotiated the price, possession and other terms of the contract you have the opportunity to make the purchase contingent on a home inspection. You hire a professional home inspector to go through the home to see if there are any issues that were unknown or undisclosed. If there are problems you can ask the seller to fix them. If the seller is unwilling to do so you can accept the house as-is or cancel your purchase agreement and keep your earnest money.
Time and Place of Closing: Although a date for closing is specified in the contract, either the lending institution, the attorneys, or the title company is responsible for determining the place of closing. The time can be set for what’s convenient with your schedule. Note – In Rochester, Minnesota buyers and sellers do not close together so you don’t have to worry about accommodating someone else’s schedule.
Prior to Closing:
- You should do a final inspection of the property.
- To eliminate mechanical problems, a 1-year Buyers Protection Plan is available to protect the vital systems of your new home.
- A paid-up insurance policy and receipt must be brought to closing.
- A couple of days before closing, the lending institution or the title company will notify you of the closing cost figures. A certified check, cashier’s check, or in some cases a personal check is acceptable at the closing.
If you are ready to get started. Click here to schedule a time to meet with Shawn.