10 Easy Steps to Buying a Home

Buying a home is the largest investment decision most people will ever make. But it’s more than a financial asset. It is where you hope to start and end each day, where you plan to build a life with your family and friends. It’s a place that should bring you comfort and satisfaction. Our agents understand this. When it’s time to buy, we use a 10-step framework to help find the best home for you.

THE PLAN

It is vital to start with a plan. Home buyers often attempt to do much of the planning themselves before engaging a REALTOR®. We have significant experience representing buyers and sellers and are in this business because we love helping people. Take advantage of our experience! Go ahead and engage us at the start.

THE PLAYERS

Dozens of people can be involved in a single real estate transaction, the majority of whom you will never meet. Your two primary advocates throughout the transaction will be your agent and your mortgage broker. The mortgage broker (also referred to as the lender) is the person responsible for securing a loan so you can purchase a home. We have worked with many lenders and can help you choose the one that suits your specific needs.

The three other major players in your transaction will be the property inspector, the insurance agent and the escrow company – more on all three later.

PRE-APPROVAL

After you have met with us and selected a lender, the next step will be to work with your lender on a pre-approval of your loan. The mortgage broker will present various financing options and should provide you with an estimate of your monthly payments and funds needed to buy a home. The lender will run a credit check, verify monthly income, asset statements, debt-to-income ratio, etc. and determine how much money you can borrow. Afterwards they should be able to provide a pre-approval letter that we will submit with your offer to reassure the Seller that you are qualified to buy their home.

Many listing agents and sellers are now following a standard practice we’ve always followed at Homes from Jason where a buyer’s pre-approval letter or proof of funds are required before an offer is deemed complete. Sellers will remove their home from the market upon accepting an offer and want confidence that buyer is ready, willing and able to buy.

THE SEARCH

After you have met with us and selected a lender, the next step will be to work with your lender on a pre-approval of your loan. The mortgage broker will present various financing options and should provide you with an estimate of your monthly payments and funds needed to buy a home. The lender will run a credit check, verify monthly income, asset statements, debt-to-income ratio, etc. and determine how much money you can borrow. Afterwards they should be able to provide a pre-approval letter that we will submit with your offer to reassure the Seller that you are qualified to buy their home.

Many listing agents and sellers are now following a standard practice we’ve always followed at Homes from Jason where a buyer’s pre-approval letter or proof of funds are required before an offer is deemed complete. Sellers will remove their home from the market upon accepting an offer and want confidence that buyer is ready, willing and able to buy.

OFFER & NEGOTIATIONS

When you have identified the property that meets your specific needs, it’s time to make an offer. We will help you identify the right offer for the home that you choose on the basis of comparable properties that have recently sold. Price is only one of the many terms included in an offer, and we can help you present terms that will optimize your offer’s chance of being selected by the sellers. What happens after the offer is submitted depends on the seller and the level of other offers or interest there has been in the property. Negotiating terms with the seller can be quick or can take some time. The key is having an agent who is on top of the process the whole way through. That’s why you’re working with us!

INSPECTION

When you are under contract and the home is “locked down,” the next step will be to schedule a general property inspector to examine the house. Your agent can recommend inspectors and coordinate the process for you. For many buyers the home inspection is the most anxiety-ridden step in the process. Suddenly you discover that your dream home is not without flaws. At this point it is good to remember you are not alone. Almost every buyer (especially first time homebuyers) feels these same emotions and, like them, you too will get through it. The key is to understand which are major issues and which are more minor issues. That’s why an inspection is important.

Occasionally, the general inspector will recommend that you engage another inspector that specializes in foundations, roofs, electrical, HVAC or plumbing. If this is the case, your agent will help you coordinate with these service providers.

All of this will be done during the option period negotiated by your agent. The option period allows you to a) negotiate any repairs or credits for repairs or b) terminate the contract should an insurmountable defect be revealed. Generally speaking, your option period will last 17 days and all amendments or cancellations must be completed in writing by the last day.

HOMEOWNER INSURANCE

If you have not already contacted your homeowners insurance provider, now is the time. We can recommend several insurance providers we have worked with in the past. The insurance agent will provide a policy quote they feel best suits your needs. When you have decided on your provider and policy, the insurer will contact your lender and escrow officer to relay policy details. You will pay for the first year’s premium at closing.

One point of confusion for many buyers is the difference between homeowners insurance and home warranties. If your home burns down, you would pursue a claim on your homeowners insurance. If the air conditioner breaks, you would seek a claim with the home warranty. Homeowners insurance is required by your lender. A home warranty is not required.

APPRAISAL & SURVEY

If you are getting a loan on the property, the lender will send an appraiser to give his independent assessment of what the house is worth. The appraiser has the final word on whether the home you are buying is worth the contract price. Should the home not appraise for the sales price there would be several avenues to discuss what happens next. It is not common for this to happen, but if you are buying in a “hot” market (where new sales exceed the comparable values of prior sales) this is an important hurdle to overcome.

You may also be required to have a survey of the property. The survey is a depiction of the boundaries of the property and of the dimensions of the structures on the property. If the seller has an existing survey, and nothing has changed that would need to be reflected in the survey, you can opt to use this existing survey. However, it is advisable that you get your own survey as it is the surest way to confirm that the property is accurately catalogued.

FINAL APPROVAL

In the final weeks before closing, your lender will be working diligently to finalize the paperwork on your loan. At this point the lender may request additional paperwork from you. Returning these remaining items in a timely fashion will be important to ensuring closing on time. When final underwriting is complete and your lender issues a full approval, it will send instructions to its closing department. These instructions will then be forwarded to the escrow officer (also known as closing officer). It will be the escrow officer who actually handles your closing and preparation of the final HUD Settlement Statement.

It should be reiterated that any major purchases after you are under contract should be discussed with your lender. Taking on new debt or lowering your cash reserves could impact final loan approval just before closing. Lenders may do a last minute credit check and verification of employment just before closing.

THE BIG CLOSE

On closing day you will review all of the documents needing your signature to finalize the purchase of the home. We make it a point to attend closing to ensure that everything agreed to in the contract is reflected in the closing documents. After you and the seller have signed all the documents, the escrow company will alert the banks involved, asking permission to fund the loan. After all the money has been transferred between banks, the house officially becomes your home. You might hear the term; “we are funded,” meaning you are the new owners!

Your relationship with us does not end there. We will still be there for you when you decide to sell your home down the road and for all the years in between. We are able to connect you with professional service providers who can help you with all aspects of your home ownership and should be your primary resource in all matters involved in your home sweet home.

Buyer’s Request Form