1. Consultation with a Mortgage Lender. This consultation will provide you with information regarding various loan programs that may be available to you based on your credit history and personal finances. The goal of the consultation is to get Pre-Approved for a Mortgage and determine the loan amount for which you qualify. When the loan amount has been established, the search for your new home can commence.
In preparation for the consultation with the lender you should gather the following documents.
· Two years for W-2
· Paycheck Stubs for one complete month (most recent month)
· The most recent two months of checking and savings account statements
· Most recent statements from your investment accounts – IRA, 401-K, Stocks & Bonds, etc.
If you would like a referral to a Mortgage Lender I can, as a service, provide you with contact information for several lender with whom I have conduced business in the past. The selection of a lender and a loan program are ultimately your choice.
2. Where is your Money? – Now is the time to move any money that you will be using for the purchase of your new home to an accessible account. If you will be using money from a 401-K or TSP account you will need to research and find out how you can access those funds and have them available in time for Settlement.
3. Exclusive Buyers Agency Agreement – This is an agreement between the Buyer(s) and a Real Estate Brokerage that obligates the buyers(s) to work exclusively with the Broker for the term of the agreement and to compensate the Broker, directly or indirectly if the buyers purchases property during the time the agreement is in effect, regardless of whether the buyer discovers the property on their own or through another agent. (Sample Document Attached)
4. Needs vs. Wants! – When searching for your new home, there are many features that are categorized as Needs and others as Wants. It is important to have a clear understanding of the distinction between the two. A Need is something that you must have while Want is something that you would like but you could live without. I highly recommended that you write down you Needs and Wants so that you can share this information with meand or your co-buyer. This information will help in narrowing your search and focus on what is really important to you. (worksheet attached)
5. Locating the Property – Once there is an understanding of what you qualify for and your list of needs and wants are finalized, the search process you home commences as follows.
· Review of the MLS (Multiple Listing Service) for properties that are currently on the market that fit your criteria.
· FREE ListingBook.com. A search tool resource that you can customize to fit your search criteria.
· Automatic updates of available properties can be e-mailed to you as they come on the market.
· Continued internet searches will be supplemented by my attendance at Broker Open Houses, research of builders, etc.
· We will then schedule a time to view properties so that you can make your selection.
6. Earnest Money Deposit – Earnest Money is evidence that the buyer(s) intend, in good faith, to purchase the property and may enhance the value of the offer depending on the amount. There is no rule regarding the amount that should be deposited. If you are purchasing a home from a builder they will dictate what their deposit requirements are. If you are purchasing a Re-sale property I will make a suggestion as to the amount of the deposit. Keep in mind, the seller can always ask for additional funds to be held. All deposits in this regard will be held in an escrow account and will be credited towards the Sales Price, down payment and or Closing Costs at Settlement. (See Regional Sales Contract, Paragraph 4. Deposit)
7. Preparing to write an offer – Once you have identified the property that you would like to purchase we will have a conversation as to how you would like to structure your offer. I will guide you through the process and advise you on how to structure an offer that protects your interests as well as shows your whole hearted intent to purchase the property.
8. Presenting the offer - Once we have worked out the details of the offer and the buyer(s) have signed the Contract and supporting documents.
· I will contact the listing agent and deliver your offer to them as they request.
· Once the listing agent has the offer they will present it to their clients, the Sellers. The sellers then have the following options. They can Accept the offer as it is written, they can Reject the offer entirely or they can Counter the offer in part or in whole.
It is my position to outline the strengths of you offer to the listing agent and overcome any challenges that may occur through the negotiations.
9. Ratified Contract – A Contract is Ratified when ALL parties involved, Buyer(s) / Seller(s) have agreed to ALL of the terms of the contract, which include price closing date, amount of earnest money deposit , etc… and the document have been delivered to each party. At this stage the completed contract will be sent to your mortgage lender and settlement agent as specified in the contract so they can fund the loan and prepare the title work that is necessary to get the transaction (purchase/sale) to settlement.
10. Hazard Insurance – From the date of ratification of the contract you have 7 days to make application for property insurance, if insurance is required by your lender.
11. Home Inspection – If you have elected to have a home inspection on the property, the inspection must be completed within the specified number of days in the contact. From my experience, I recommend the inspections be completed within a couple of days of the contract being ratified. This will give you time to call in any specialists that may need to be consulted as a result of findings of the Home Inspection. DO NOT wait until the last allowable day to have the inspection completed.
12. Appraisal - Your lender will order an appraisal of the property to ensure that the price you have agreed to pay for the property reflects the current value of the property. The fee for the appraisal will be collected by the lender from you.
13. Utilities – I will provide you with the contact information for the local utility companies that serve your new home. I recommend that you order services 2 weeks prior to settlement to ensure that there is no lapse in service. It is often less expensive to simply have the service changed to your name prior to the termination and cut off of service by the seller. When contacting the utility companies indicate the effective date that service is to switch to your name is the Settlement date in the Contract.
14. Prior to Settlement - In most situations we will be able to review a preliminary HUD-1 Settlement Statement, prepared by the Settlement Agent, prior to the closing date. This will allow us to review all of the charges that have been submitted by your lender, the real estate brokerage, HOA/ Condo Associations, etc. The HUD-1 Settlement Statement remains subject to changes until it is agree to by the buyer(s), seller(s), Lender, etc.
15. Walk-Thru - Within a couple of days or the actual day of your settlement date we will schedule a walk-thru of your new home. This is your opportunity to do a final inspection of the home and its condition before going to settlement. If there are any deficiencies that need to be addressed, such as items indicated on the Home Inspection Report that need to be satisfied, this is when we identify them and bring them to the attention of the Listing Agent. Prior to the signing of the documents any deficiencies will be negotiated.
16. Settlement – This is the time when all of the documents are signed, monies are moved between the buyer(s) / Seller(s), and ownership of the property is conveyed.
A day or two prior to settlement your lender should be able to provide you with the total amount of money that you will need to bring to Settlement. If you are required to bring funds, these funds must be Certified Funds, Cashier’s Check or wired direct to the Settlement Companies account.
17. Moving Day – Once you have been to settlement the home is now yours and you can move in. Planning is Key, whether you will be hiring a company to move your possessions or you are doing the move yourself.
If you have planned any major, immediate projects (i.e. new carpet, hardwood floors interior painting) for your new home, I recommend that you postpone your move until the project have been completed.
I hope that the above outline of the home buying process will serves to facilitate this exciting venture. Please be aware that each transaction is different and adjustments will be made as necessary to accommodate your particular situation. I am here to assist you through the entire process of buying your new home.
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