The Home Buying Process
Finding the right home starts with finding a good lender. You need to know how much home you can afford, how much money you will need for down payment and closing costs, and what your monthly payments will be. A lender can pre-approve you for a loan and issue an approval letter. This is invaluable when you are negotiating on a home. If more than one comparable offer has been received the seller will always choose the buyer who has the financing in place.
The next step is determining which neighborhoods you prefer within your budget. Since the first rule of real estate is location, location, location, we always recommend choosing the best community you can afford even if it means choosing a somewhat smaller home, as long as the home will accommodate your lifestyle comfortably. Then when you are ready to sell the home and move on you will be assured of the maximum appreciation.
Once we have identified several neighborhoods to look in, our advanced computer systems allows us to customize your search to fit your special needs. We can search by size, number of bedrooms & garages, school zones, lot size, pools, fireplaces, floor plan style, etc. We will preview the homes for you, and only show you the ones we know are the best on the market for price and condition. And don’t worry, you will know the home when you walk into it! It will feel like your space.
Next we need to negotiate an offer with the seller. The two most crucial points in the contract will be the selling price and the closing date. To find the proper offer price, we will do a market analysis on the neighborhood for you and determine how much other similar homes have been selling for.
It’s okay to offer a seller less than the listed price, but don’t expect him to consider a ridiculous amount. Most sellers become highly insulted by “low-ball” offers and retaliate in kind. The key is to try and figure out an amount that is slightly less than what he was expecting to get, and that is close enough that he gets more nervous about losing a possible sale than about the sales price. Also take into consideration how you will feel if you lose the house to another buyer. Sometimes trying to save a couple of thousand dollars is not worth losing the home of your dreams.
It is also a great idea to give the seller MORE earnest deposit than he asked for. This is the “sincerity” money which is placed into escrow as soon as the contract is negotiated. Giving the seller more guarantees him you are serious about his home and can go through with the sale. It also might make him agree to a lesser sales price.
After the offer is accepted it is time to choose a home inspector. We always recommend having one, even on new construction. They will go through the home and up in the attics checking all the major systems. They will find defects a normal buyer could not reasonably expect to discover and often the seller doesn’t know about them either. A few hundred dollars invested here can save you thousands.
The lender will also be sending out an appraiser. The appraiser’s job is to make sure you are not paying more than fair market value for the property.
Then it’s time to work on turning on the utilities, transferring medical records, registering for schools, etc. while the lender is processing your final loan paperwork.
About four days prior to the recording date we will do a final walk through inspection of the home. We will check to make sure everything in the home is still in good working condition and anything noted by the home inspector has been fixed. Then you will go to the escrow company or attorney’s office to sign the final loan documents and take in a cashier’s check for the balance of the down payment and closing costs.
The day your home is recorded at the county recorder’s office is the day you get your keys. This is when title is actually transferred from the seller’s name to yours, and it’s time to open a bottle of champagne to celebrate!
Article by Diann E. Tonnesen, Realtor®
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