CORRECT STEPS TO BUYING A HOME

"The process of finding a home involves a number of steps. The good news is that there is a fairly logical sequence by which this occurs."           

  Step 1:    Choosing a real estate agent  

 A real estate transaction should be a collaborative effort between you and your agent.   A good agent will ask specific questions to streamline the process.

                                                  HOW TO CHOOSE AN AGENT

* You can go to the websites of local agencies and read what they have to say about themselves, check out their picture etc... 

* Go to some Open Houses and "interview" them.  (Don't laugh !  The home purchase ranks as one of the higher stress situations next to marriage. It is important that you feel comfortable and trust them and their advice)

 As the "Buyer" you are not charged for their services, but in return  You should only work with one agent at a time.

* Most people ask friends, neighbors or relatives for a referral to find an agent . This can be good or bad. You need to find someone that YOU work well with. 

* Find an agent who is computer literate.

* Lastly, everyone has a friend who is an agent. This can be a tricky, sensitive situation. Working with a friend can be good or bad. (For the process and the friendship)

If you choose not to use your friend, explain to them beforehand.

Hint: Bring a token gift at the time you tell your best friend you are going to be working thru another agent. Let them know that you are aware of how they make their living but "you felt the friendship is better served by not mixing business with pleasure".

 Realtors work on commission only (No salary). Your friend may be "disappointed" with you at first if you choose to not use him or her for both social and financial reasons.

 Step 2:   Qualifying for a loan

 Picture going to the grocery store, filling up your cart and saying;

 "Someone please hold this here while I go home and get my money"                                                

 It is imperative prior to any offer to have the banks picture of what you can afford.

Before you begin looking at houses find out what type of loan you will qualify for ! A good mortgage rep can work with you to answer these questions.

This process will truly let you know what your financial comfort zone is.

Most people think the loan process would come after finding a home, but that is wrong.

"Unless you are paying cash for a home, you will have to go through a loan approval process. By completing the necessary forms in advance, your lender will have the opportunity to check credit history, employment, and other essential aspects of loan qualification." 

"Nearly every lender requires homeowners insurance. As with the pre-approval process for a loan, shop early for insurance."

  Step 3:  Looking for homes                                                                                                                                                                                          

 After steps one and two you are"ready to go".

Let your agent know your needs, wants and must haves in a home.

Much of the "leg-work "can be done on your computer. 

My clients receive the available listings via e-mail. This allows them to view inside and outside photographs of homes for sale, the school systems, current taxes  etc. .. without having to leave their desk. After selecting the ones that look interesting, then you and your agent can go see them in person.                                                                                  

A few tips;

1) If there are no inside photos of the home, there is usually a reason.   2) Don't be too restrictive in your search criteria. You may miss "a home of your dreams"     3) If it looks too good to be true, it is.

 Step 4: Making an Offer

When making an offer to purchase a home, ask your real estate broker about the strategy they use. 

Having the agent make the offer in person is usually the best.  You will have to rely on your broker to represent your interests.

"Remember, the negotiation of a sale is one of the most critical points in a transaction and can be a very sensitive time for all involved. Do your best to maintain composure during this process." 

Make sure your sources of information remain your Attorney, Agent and Broker...not friends, parents, and other well meaning but often harmful contributors.

ALMOST EVERY "FIRST TIME BUYER" STARTS QUESTIONING:

                                                I bet I could have gotten it for less.

                                    The perfect home may come on next week, for less.

                                                                        DON'T OVER ANALYZE

 Step 5:  The Attorney

                     In New Jersey the only individual authorized to write a contract is an attorney.

The document you have just signed with your agent will be re-written .The first line of every attorney review letter usually will read "We disapprove of the "contract" in its current form".

There will be a "Attorney Review" that can last anywhere from 24 hours to, well there is no real limit. That is why it is essential to use an Attorney who does a good amount of Real Estate work. 

Like a marriage, all it takes is one bad apple to derail the whole process.

Having a good attorney on both sides usually makes for a smooth transaction.

(As with the pre-approval process for a loan, shop early for an Attorney). 

 Step 6:  The Home Inspection

     Depending on the state you live in, this may or may not be part of the procedure

"The buyer can hire licensed Home Inspectors to prepare a detailed report on the home they are purchasing." In New Jersey it is popular to have a full home inspection.

These reports can be very useful in protecting you from purchasing a home with major problems. There are many items that the keen eye of an expert can ferret out, that normal individuals would look past. Unfortunately there is another side to the process.

I have seen many deals fall apart due to an "alarmist" home inspection.

This is especially true of First Time Buyers. 

Even though the agent should not comment on the report, let me just share an analogy.

Let's say you were to hire an auditor to review your finances; they would approach the task like a blood hound hot on the trail. That is what you are paying them to do.  

Depending on the mind-set of the home inspector, the report can read like a death sentence.

 There is an old joke about the man who comes back from the doctor's office and tells his wife of forty years what the doctor said..."He said I was going to die"  "Oh my gosh, when?" she replies "He didn't know exactly, somewhere in the next sixty years"

I may be losing my friends who are licensed home inspectors but I just want to say "There is not a house (or pyramid) that they could not find traumatic fault with

Don't be afraid to ask them

"If I do nothing on your list, will the house stand another 50, 30 15 (when you get down to 10 they usually answer) years?"

 Then you will get a clearer picture of the intensity of the issues at hand.

Step 7: Closing the Transaction

"As the transaction winds to a close, the pace will quicken a great deal." This is where your agent and attorney choices really will show themselves. Buyer and seller tend to become un-raveled at this point.

There will be a "walk-through" inspection before the closing to assure that the home is in "broom clean" condition.

There are MANY documents to sign. Allow a good amount of time the day of the closing for this process. It usually takes place in the office of the Buyers Attorney and runs about two hours..

                                                        Buying a home is wrought with emotion.                            

 Try not to second guess yourself, it is one of the most stressful decision making times you will have known.

As a first time buyer you are more prone to be pulled into these emotions.