BUYING PROCESS
Initial Buyer Consultation: The first step in buying a home will be to meet to discuss your needs and wants in a home, establish a timeframe and create a strategy for your home search. We will also provide you with market information, team bios and sample agency agreements. We encourage constant communication throughout this entire process, please feel free to reach out via phone, email or text should you have any questions!
Pre-Approval: Lender pre-approval is critical for two reasons. The first is to ensure that we are looking at the right price point for you in the market. The second reason pre-approval is important is to show a seller that you are willing and able to purchase a property. To get pre-approved you will need to call a lender with information regarding your salary, assets and credit score. We have several lender partners that we can refer you to that would be happy to help you with the pre-approval process.
Home Search: We will set-up an auto email based on your search criteria to ensure you see properties as soon as they hit the market. In addition to the electronic search, we will be reaching out to colleagues in the area to see if we can find your perfect home before it is even on the market. Once you have identified homes of interest, we will gather information about the property prior to showing the home.
Viewing Properties: This is the exciting part! We will schedule showings based on the properties of interest. Every listing has different showing instructions. Typically we will need to provide the homeowner with 2 hours notice and we can view the property 15 – 45 minutes at a time. Also, we encourage you to attend open houses and tour model homes. While attending either event, please make sure to register us as your agent. If you fail to do so, you may risk losing representation in the sale. It will also prevent you from being bombarded with follow up calls from the builder or other agents, we will be your point of contact.
Writing An Offer: Once we have found a property you would like to purchase, we will write a sales contract. We will review various contingencies, such as home inspection, appraisal and financing. Once the offer is written and you have signed, you will need to write a check for your earnest money deposit (EMD), which is typically 1% of the sales price. The pre-approval letter, sales contract, any applicable addendums and EMD will be submitted to the listing agent. Once the listing agent receives the offer, there could be a negotiation period where the seller and buyer may submit counter offers. Once both parties have agreed to the terms and conditions and the contract has been signed by both parties, the contract is ratified.
Ratified Contract: Once the contract has been signed and returned to both parties, the contract is ratified. The day after the date of ratification is day 1 when computing dates within the contract. We will provide timelines and updates throughout the entire process to ensure all deadlines are met per the sales contract. Once the contract is ratified, your EMD check will be deposited into escrow which will be held by the title company. We will send the ratified sales contract to both your lender and the title company to begin the lending and title process. You must make written application for financing and any lender-required property insurance within 7 days of the contract being ratified. If there are any inspection contingencies in the contract, we will set up these appointments.
Home Inspection: The home inspection will be conducted within 10 days (negotiable) after ratification. If applicable, we may ask the seller to make repairs for unsatisfactory conditions to major systems like electrical, plumbing, roof, etc. If the seller agrees to the addendum, all items must be completed before closing. If not, we will negotiate until all parties can agree to which items will be repaired. If an agreement cannot be met, the buyers can void the contract and have their EMD check returned.
Home Owners Documents: If the home is in a Home Owner’s Association or Condo Association, the seller must provide a disclosure package from the association. This packet will include information regarding the financial and legal status of the association. The seller may have to remedy any violations that may be found. If you are not satisfied with the information provided in the association documents, you have a 3 day right of rescission from the time you receive the HOA or condo documents. If you choose to void the contract within those three days, your EMD check will be returned.
Termite Inspection: In the majority of cases, we can negotiate which party conducts and pays for the termite inspections. However, your loan program may dictate who is or is not allowed to pay for this inspection. Given the low cost, if allowable, we recommend the buyer pays for the inspection so that they can select a trusted company. If there is any evidence of damage or termite/ wood -destroying insect activity, it is the responsibility of the seller to make necessary repairs and treatments.
Appraisal: If you have an appraisal contingency, and the property does not appraise for the sales price, there are 4 options:
- The buyer can pay the difference in cash
- The seller can lower the sales price to the appraised value
- The buyer and seller can negotiate and meet somewhere in the middle.
- In the event that an agreement can’t be made, the buyer has the right to void the contract and their EMD check will be returned.
Walk-through: During the 7 days leading up to settlement, we can conduct as many walk-throughs as needed to ensure that all appliances, utilities, and fixtures are in normal working order. Also, we will check that the items agreed to in the homes inspection addendum have been completed. At this time we will also transfer all utilities into your name. If there are any remaining issues, they can be resolved by a seller credit at closing or through escrow.
Settlement: Settlements can take place in person or remotely, depending on your preference. Please let us know ahead of time what you prefer so we can schedule appropriately. On the day of settlement, you will sign the closing documents, loan trust documents and deed. You will also receive the keys to the property. Congratulations on your new home purchase! If you have any questions after settlement, please call us first. We are your support before, during and after the home buying process!
BUYER’S FEES
When purchasing a home, most people focus on the price of the home and their monthly payment. While these are very important, there are several other factors that will need to be considered when buying a home. Some fees can be rolled into your loan and others will need to be paid up front or at closing. Below is a list of expenses a buyer should plan for when purchasing their home:
Earnest Money Deposit (EMD) – This is a cash deposit that is sent with the buyers offer to purchase the home, typically 1-2% of the sales price. This is evidence that the buyer intends, in good faith, to purchase the sellers home. This will be held in escrow until closing and will be rolled into the money the buyer must produce to purchase the home. Should the buyer breach the sales contract, the seller may be awarded with the EMD.
Down Payment: A down payment is typically a percentage of the home’s sales price that a buyer will pay at closing to secure the loan. There are some loan programs, such as VA or USDA, that don’t require a down payment. However, the majority of people will need at least 3% for a conventional loan or 3.5% for FHA loan.
Lender Fees: There are certain fees your lender may charge as a result of securing the loan. Some fees may include lender origination fee, application fee, credit report fee, or discount points. Please let us know if you would like to speak to one of our partners so they can provide you with an estimate.
Title Fees and Title Insurance: The Title Company that you select, will provide several services in preparation for closing. Some include: title search, owner’s title insurance, lender’s title insurance (required by the lender), title binder fee, courier fees and recording fees. Please contact us if you would like an estimate of your title fees.
Survey: Unless a survey is required by the lender, this is optional for the buyer. A survey can vary depending on the size, location and irregularity of the lot. However, typically these can range from $400 – $600.
Appraisal: An appraisal is typically required by the lender to assess the market value of the property. The bank does this to protect their investment and ensure the property is not being sold for more than it is worth. This must be paid prior to closing. An appraisal can vary depending on the size and location of the property. These can range from $400 – $500.
Inspection Fees: Depending on the terms of the contract, the buyer may have negotiated to obtain certain inspections for the property. These inspections may include: home inspection ($200 – $600), radon inspection ($150 – $200), Termite Inspection ($50).
Transfer Tax: The buyer will need to pay a transfer tax to the county.
Please feel free to contact us, we can provide you with an estimate of fees.