As a Carlsbad home buyer, getting from "home search" to the closing table means you have a number of hoops to jump through. And, as a result, there is always the possibility of a glitch somewhere along the way.
Ask any agent, or any buyer or seller - no matter how smoothly a transaction may be going, before you know it something pops up to burst the bubble.
Be prepared for this.
While it might not happen, chances are it will, so being prepared mentally will help keep you sane when things don't go as planned.
Here are some hoops and some things to watch out for:
PRE-APPROVAL - get this done right away so you can be in control. Knowledge is power. Don't let anyone tell you not to worry. Bad credit? Not enough income? This can limit you. You might not be able to change your income or your debts, but find out how to fix your credit if this is an issue.
FINDING THE RIGHT AGENT YO HELP YOU - do your homework here. Get a referral if you can, but make sure you work with someone you trust, who provides YOU with the information you need, and who clearly has YOUR interests at heart. Lots of people out there can DO THE JOB, but they won't necessarily be looking out for your fiduciary interests. Make sure they are!
OFFER - this causes lots of anxiety for many: figuring how what to make the offer on, how much to offer, etc. Get the info you need to make an informed decision. Again, knowledge is power. Know your limits (and your budget, not just what the bank tells you you can afford). Be prepared to negotiate, and expect to get a counteroffer, unless you offer full price and the terms and conditions are what the seller wants (probably rare in this market). Can your agent present your offer in the most positive light? And understand the terms and conditions of the contract before you sign - your agent is, or should be, the expert here. You should also verify the MLS info you are provided - mistakes and inaccuracies are fairly common.
HOME INSPECTION - a prudent thing to do (not mandatory, but don't you want to know what you are buying?). Ask questions, learn what you can about any defects (recognize that no home is perfect), necessary repairs, maintenance. The inspector is working for YOU! Afterwards, consider what you are willing to deal with, the possible costs, the return on your investment, and make an informed decision about what you would like the seller to fix or otherwise resolve (more negotiation here), or decide to walk if the issues are too substantial (say, major structural damage).
The process varies from state to state as do the forms for this. Many sellers will be willing to work with you on some or all issues (fix them, provide a credit), but again know your limits. If you can't reach agreement you can decide to walk away. But understand under what conditions (see the contract) so your deposit is not at risk.
CONTINGENCY PERIOD - this varies by state, but you will likely have documents to review and approve as part of the transaction. Keep the time frame in mind and make sure you get what you need in a timely manner. Ask questions if you don't understand, and sign-off on disclosures, etc. once you are comfortable with the info. A title search may be done during this time and there could be title problems (usually fairly easy to remedy). Keep copies of everything.
LOAN COMMITMENT - you have been pre-approved but you still need the commitment from the bank, based on the appraisal and the full financial file. Some lenders have complex requirements for paperwork you need to provide - find out what these are. If you are getting gift money, find out how the bank will look at this and their requirements (some want the monies in your account for a month...or longer). Keep watch over the rates and talk with your lender about locking in if it makes sense and time permits (often no sooner than 45 days before closing). Make sure the bank is moving the process along and you can meet the deadline.
FINAL WALK-THROUGH - your chance, before closing, to check on the home and make sure it is as it was when you made the offer. The seller's personal stuff should be out (depending on the arrangement and timing), and all the things you agree would be left are there. Take a camera, and make notes. Any problems will have to be worked out before closing can occur.
CLOSING/SETTLEMENT/CLOSE OF ESCROW - you may get a bunch of documents to review and sign before there is the actual closing, or it can all happen in a room with the lender (or an attorney) or the escrow company - this varies from state to state. Read it all carefully and make sure the info is correct. Check the loan (rate, payments, fees); check the title and other documents (I saw a closing where the wrong address was on all the documents). Check names (are the names correct? is everyone on the deed who should be?), dates, money (especially the math) social security numbers, etc.
Good luck and enjoy this exciting time. Your agent is there to assist YOU - make sure you take advantage of his or her expertise. And remember - there are no dumb questions.
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If I can provide more information about Carlsbad and surrounding areas, or the housing market in general, or otherwise assist you in your homes search, please contact me by phone or text at (760) 840-1360
or email me at JDowler@remax.net.
All content copyright © 2007 Jeff Dowler Carlsbad Homes and Real Estate Tidbits
