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5 Steps to Home Buying

Five steps to home buying is an overview of the home buying process. As time goes by, I will review each of the five steps to home buying individually. I will be the first to agree that it is not rocket science, but I do believe that the process is made much easier with the help of a buyer’s agent. (A buyer’s agent is a real estate agent representing the buyer via a buyer-broker agreement).

The five steps to home buying are:

1. Honest evaluation of your current situation.
2. Careful determination of your needs.
3. Thorough review of possible homes.
4. Negotiation of  your offer to purchase.
5. Fulfilling requirements of contract prior to settlement.

The honest evaluation of your current situation will require that you take stock of your finances, speak with a lender regarding a mortgage and decide if that amount you are comfortable paying will be sufficient to carry your loan.  The type loan program you choose will dictate how much cash you will have to have.  In general, FHA loans require a lower amount of down payment ( around 3.5%) and conventional loans will require about a 20% down payment. There are programs that fall in between these amounts. A good lender will be able to direct you.

The careful determination of your needs should include the size, type and location of your new home. The lender will have given you a price range to work with while searching.  Often the decision will be impacted most by location. While you can certainly find bargains close to the city, prices are usually lower as you move farther from the city.  The counsel of an experience real estate agent is very valuable during this stage.

The thorough review of possible homes usually begins with an on line search of possible homes. You may have already discovered that the internet is a well stocked resource of homes. Here is another step that is aided by a good real estate agent.  The wide range of homes that show up on line are not always what they appear to be. An agent can go through listings and give you an accurate picture of homes available.  Following the on line search, you will visit homes that seem to meet your criteria. The eyes and ears and knowledge of  an experienced agent are your best resource in this phase. DO NOT…Let me repeat…DO NOT fall prey to a listing agent. The listing agent CAN NOT represent you and their only goal is to sell the home for their client (They only can represent the seller).

The negotiation of your offer to purchase is one of the most crucial points in the home buying process. In plain language, this is where the rubber meets the road in the purchase of a home. An experienced agent will make certain that your interests are protected in every aspect of the contract.  Less experienced agents may prepare an offer that does not protect you completely.  Again, this is the most important juncture of your purchase. Negotiations will determine what you pay and the condition the home MUST be in when you take possession. Things like appraisals, inspections and possession are covered in the actual offer.  You may think you are saving money by going a discount or rebate route, but you may also be putting the entire process at risk.

Fulfilling the requirements of contract prior to settlement can be a confusing process for the lay person. An experienced agent will have the time table and required actions set in a calendar.  There are many things that must occur between contract ratification and closing the sale. Some things will relate to contingencies in the contract and others will relate to your lender. It is very important that you respond to requests from your lender quickly. They may be requesting information that seems burdensome, but they are only following the direction of the underwriters. In many cases, as closing nears, you will feel the pressure build. An experienced agent has guided many clients through this process and they will gladly “hold your hand” and calm your nerves. Experience makes a big difference.

Five steps to home buying is an overview of the home buying process, but it does offer a general idea of the steps necessary to purchase a home. As you can see, while it is not terribly complicated to those in the industry, it can be confusing to the average person.  You will find other lists and other thoughts on this process if you Google “home buying steps”.  This is based on my years of experience as an agent in the Maryland and DC area.  My clients are all treated the same way and they do experience the difference.

If you have any questions about the process, feel free to contact me, I really do love my job.

Buyers – Don’t swim naked…put your blue fin on

 

So, you went ahead and found yourself a house to buy.  Maybe, you walked into an open house and the helpful agent told you that he or she could present your offer and you would save a bundle of money.  Maybe you just don’t trust real estate agents.

From the outside looking in your choices do seem limited. On one hand, you can go with your old college pal that is now a real estate agent.  Of course, you get a little nervous when you have flashes of him partying with you or you have memories that are best left unmentioned in mixed company. On the other hand, you have a group of folks past middle age that still use publicity stills from their senior prom. I mean, if they can not discern fantasy from reality when looking in the mirror in the morning, how in the world will they be able to see your situation or find you a home.

Faced with these choices, you set sail as the pilot of your own ship.  You called some lenders and found someone that you trust.  You know how much you can spend. You did the online searches for  homes.  You went looking on your own.  Maybe you called a few agents to see homes and never signed an agreement.  Now you have found the home you want to buy.  You checked on line and discovered OPPS… there are lots of forms to fill out.  You are ready to drop anchor and swim to shore.

When you go swimming in the home buying waters

it can be very scary.

You have done a little more research or maybe a friend mentioned it or maybe you stumbled across one of their flashy flyers..some how you heard about REDFIN.  Hey, they have a real deal.  Just stop by with an address and they will fill out the forms for you.  After settlement, they will give you a big fat rebate check.  Now that is a bargain. After all, you did all the work, why should an agent get all the money.  Good questions.  That guy from REDFIN  won’t tell you. The guy from REDFIN will not even ask you to sign a buyer-broker agreement.  He can’t. He may ask you to sign a form that gives him permission to fill out your forms ( and you can bet it will include a big ole disclaimer relieving him from any responsibility for anything other than having the forms filled out correctly).  Remember, you are captain of your own ship and should your ship sink…you sink with it.

We offer an alternative

If you are at the point where nothing is left to be done but write the offer and get you to settlement, we will step in and assist you with the complete coverage provided by a buyer-broker agreement.  Now,  just to sweeten the deal, we will make sure you have the coverage of a home warranty for the first year you are in your new home. But wait, there’s more.  We will also write you a rebate check after settlement.  Our rebate check will be in addition to full protection and a warranty.  The amount of the rebate will depend on the amount of the purchase and the amount of money the seller is offering.

Now,  relax, we are professionals.  We have done this hundreds of times. We know what we are doing.  We have even done this from start to finish with some people. Go figure. During the cold war, there was a saying “Better dead than red”.  We’d like to add …Singing the Blues never felt so good.  Buyers – Don’t swim naked … put your blue fin on!

Interested … give us a call.  John MacArthur and Lourdes Tudela ReMax Realty Centre  301-509-5111