Tuesday, July 2, 2019 / by Leticia Almaro Nicolini
Breaking Down the Buyers Process
For the people out there, who are looking for homes on sites like Zillow or Trulia and are getting overwhelmed with the different types of homes and numbers or being spammed by real estate agents. Here is a quick guide discussing the process that the home buyers must go through before they can buy a new home.
Signing an Exclusive Buyer’s Agent Contract
I am not even looking for homes and real estate agents email me everyday trying to get me to talk to them and sign an exclusive buyer’s agent contract. This contract means that you will exclusively work with this real estate agent during the process of purchasing a home. The contract also declares how long you will work with this agent, how they will be compensated, and the services that they will provide you.
Before you sign this contract, you will meet with the real estate agent and form a relationship to make sure that they have your best interest at hand. Not all agents are the same so take the time to meet with a few of them and learn more about their process to find out who can help you the best.
Get Prequalified for a Loan
Whether you have found an agent to work with or not you will need to get prequalified for a loan. As the buyer you will know what kind of a home you are looking for, what your price range is and the area you are looking for a home in. So, you will need to get prequalified or preapproved by a lender for a mortgage loan amount. If you do not have a lender to go to your agent will refer one that they work closely with. The mortgage loan officer or broker will provide you with a letter stating the mortgage amount that you have been approved for and the terms of the mortgage. This letter will need to be presented with the purchase offer, so it is very important to get this step done first.
Determine Your Home Preferences
You probably have a general idea of what type of homes you are looking for. The next step is to sit down with your real estate agent to discuss your preferences. If you do not have any preferences or are completely lost on what types of houses are out there, your real estate agent will help you solve those problems. If you have a significant other that you are moving with, then you both need to determine what features you both absolutely must have in a home and what you can compromise on. It is important to make sure that everyone is on the same page so there are no problems down the road.
Here are some questions to ask yourself to determine your home preferences: Do you want a condominium, cooperative apartment, single-family home, or townhouse? Is the home your primary residence or a second or seasonal home? Other considerations include the number of bedrooms, number of baths, floor plan, type of flooring, and other amenities. The exterior features desired might include a garage or other parking arrangement, yard, deck, garden, lot size, and lot location. You may consider proximity to public transportation, shops, schools, or parks as critical.
Search for Property on the Multiple Listing Service (MLS)
The Multiple Listing Service (MLS) is a website for agent to use to see which homes are on the market. Now that the real estate agent knows your home preferences they will use the MLS to narrow down homes on the market that best match your search. If your preferences do not match what is on the market they may need to get altered or else the home buying process might be delayed longer.
Real Estate Agent Shows Buyers the Homes That Meet Their Needs
Now that your real estate agent has found some homes that match your preferences, they can start showing you potential new houses. You may look at ten houses in one day or two houses in one day depending on the market at that time. During the showing process you will find the house that meets most if not all your needs, thus narrowing down your list. Once you find the home that is right, you may need to go and tour it multiple times to really feel the space out. This way you can really be sure that it is the perfect home for you and that it does not have any extra surprises. You can also bring along family or friends to give you advise during this part of the process.
Conduct Sold-Comparable Search for Buyers’ Prospective Purchase Property
Once you decide they want to make an offer on a home they’ve seen, your agent will research what comparable properties have recently sold for in the area. The comps should compare other properties in the area that are similar in age, lot size, condition, number of rooms, number of bedrooms and baths, garage, and basement. This way the agent can make sure you are getting a good deal for the property.
Make a Purchase Offer
You have found a home to purchase and are ready to write an offer. Your agent will write out a contract offer with you and fill in the amount of the purchase offer. Based on the comps, your agent will help you decide what initial offer to make and then discuss how high they are willing to go with their offer.
Negotiate the Offer to Purchase
Once you make their purchase offer, the sellers may counteroffer. You need to work closely with your agent to determine how you will respond to the counteroffer and how high you are willing to go.
Your Offer Is Accepted
Congratulations! The experience may have been pleasurable, amicable, or frustrating. But the goal has been achieved; you have accomplished what they set out to do.
What to Do After Acceptance of Offer
The first seven to ten days after acceptance are a busy period for all parties to a contract. You need to hire a home inspector to assess the general mechanical and structural soundness of the home and property, as well as additional inspections for radon, lead, pest, mold, buried oil, and gas tanks. You always should complete necessary inspections that your agents recommend. Also, during this time, you will be working on applications or completing applications to secure a mortgage. The required documents for the transaction are forwarded to attorneys, escrow companies, mortgage loan companies, appraisers, and if applicable, relocation companies.
The Time Between Contract and Closing
This time can be busy or slow depending on the contract dynamic. If you feel that something is not moving along as it should be, do not assume that no news is good news. Your real estate agent should call the transaction participants to be sure the transaction is being completed according to the terms of the contract.
All the administrative work is completed, and the transaction is going to closing or escrow, depending on what is common in your market. You now have your new house and you are all ready to move in.