Our 10 Steps to Buying a Home
In this first meeting we will exchange important information and get to know each other. I will walk you through the buying process. I will learn about your unique goals, timing, and preferences. We will discuss the financial plan of acquiring the property and explore some funding options/plans together. If you do not yet work with a lender I will recommend a few of them to you, those that I think could help you and your unique situation most efficiently. We will talk about all these things that we need to have ready and handy so once we find the property we would be ready. In the end of this meeting we will have our plan, goals, timeline, budget and criteria.
Based on our conversation and your preferences I will conduct research and configure an automated search for you. You will now have a personal portal in which you will have all the tools to see up-to-date market activity and listings that meet your criteria. Your feedback on the search results will help me apply additional screens to help us narrow down the list or include additional areas so we are all on the same page and make sure the results reflect your criteria. The portal will let you mark all these properties that you like, consider, or dislike. I will immediately be notified on all them by the system. This will also allow my team and I to start and do some research on these specific properties that you have chosen and get ready for our home tour.
Before we start the car and go visit properties, If you plan to obtain a mortgage you will need to contact a lender who will pre-qualify you and provide you with a pre-approval letter. Based on your personal situation, if you are not yet working with a lender, I will provide you with referrals to lenders that I know and trust. I’m always available to join you and attend the meetings if you find it helpful. From my experience I can, in most cases, give some recommendations and some tips during these meetings. The meeting with the lender is essential at this early stage especially because the lender will let you know your purchase power and also will be able to give you heads up on issues (if any) that will need to be addressed.
The fun is about to begin… We are now ready to go out and visit some properties, basing our itinerary on properties that you marked on the portal and some others that I will be recommending to you. We will patiently visit each and every property and I will learn about things that you like dislike in a property. This will help me fine-tune the search for the future visits. I will help you explore the features of the properties, give my recommendations on optional renovations, I will let you know what I think about the property in general and its systems in particular, after hundreds of home inspections I have accumulated wealth of knowledge that I’d love to share with you.
Once we identify a property that you like we will work on putting an offer together. The offer package will actually become the contract once signed and ratified. The offer includes a large variety of local, state and federal legal forms, a lot of terms and conditions and the sellers’s disclosures on the property. Before we even start working on the offer I will prepare a CMA (Comparative Market Analysis) for us. This CMA will help us figure out the estimated market value of the subject property. The CMA includes comps of recent sales in the immediate neighborhood and in the general area. We will be comparing our subject property to these comps and come up with a price range. I will also do some general research on the ownership, building permits and sale history.
There are a lot of things to consider like what inspection contingencies we want to include, timing and many other topics that are specific to your plan and to the property that we will be writing an offer for. I will be in touch with the listing agent and learn about the needs and preferences of the sellers. We will, together, “tailor” the optimal offer in a way that it would work best for you.
Now that we are “Under Contract” a few things will take place simultaneously. We will provide your chosen settlement office and the lender with the ratified contract. While doing all of the inspections, the settlement office will research on the property and its history. The lender will qualify the property and verify the initial information that they received from you. If the property is a part of a condo or Home Owners Association (HOA), the lender and the settlement office will do their research and gather information on them as well.
The home inspection is the first time we will have this great opportunity to be at the property with professionals who will provide feedback. This is a great time to ask questions and most importantly spend time in your future home without any pressure. As the buyer you have the right to choose all the vendors in the transaction. If you do not know any home inspector in the area I will recommend a few of them to you to choose from. It is very important to choose an inspector with experience and patience, one that is willing to get dirty and go into the crawl spaces and attic, and one that is willing to take the time to answer your questions and provide you with valuable information that will help you make the right decisions. I will explain the process of conducting the inspections and the procedure of communicating with the listing agent and the sellers, as well as the importance of doing it all on time before the deadlines and how it works exactly.
There are many inspections that have become available for buyers during the years. We will discuss these at the time of writing the offer. Among them are Lead Inspection, Radon Inspection, Mold Inspection (air quality), Asbestos and others. If the property has a fireplace it might make sense to have a chimney company come to inspect as well, if the neighborhood is older it might make sense to bring a plumbing company to inspect the sewer line. It will all depend on your preferences, budget and the specific situation of the specific property.
The Importance of Applying for Home Owner’s Insurance Now
I recommend reaching out to the insurance agency and starting the process of applying for Home Owners Insurance early in the game. While pulling the information on the property for the process of obtaining the policy, the agent will access the insurance system and will be able to help us get some additional history on the property from their perspective. Having this information within the inspection contingency period is very helpful.
When you initially communicated with the lender to get pre-approved, you will have provided them with information on income and assets. The lender will have pulled out your credit reports and will have based their decision for giving you the pre-approval letter on your representations. Now it is time for the lender to verify the information. In addition, the lender now needs to qualify the property (and the condo/HOA if applicable). This process of getting the documents to the lender is very important. Remember, the bank is going to be a major “partner” in the deal so they want to make sure all is right. Once the application is ready and submitted an appraiser will be ordered. The listing agent will be contacted to coordinate the appraiser’s visit to the property. The appraiser will prepare their report and submit it to the bank. The report will include the appraiser’s opinion on the value (appraised value). Depending on the way the contact was written, if the value comes lower and an Appraiser Contingency is included, we will follow the procedure of reopening the contact price for negation.
The next step would be to meet the deadline of the Financing Contingency and provide the sellers with conditional Loan Approval. We will discuss the way that the contingencies work as far as deadlines and if they are automatically expiring or not.
As part of the bank verifications they will reach out to your employer to verify your employment, usually a few days before the funding.
Clear to Close is what we are all waiting for… Once the bank confirms Clear to Close we will know that we are good to go. The loan package will now be handed to the bank closing department for issuing the closing documents and handle the funding.
The settlement office will be in constant touch with the lender to exchange information and coordinate closing.
As I mentioned earlier, the settlement company will be preparing for settlement from the time they receive the ratified contract. It is very important to be in touch with them early in the process. If there are any issues that need to be addressed it is better to address them early and not in the last minute. The settlement office will send you a form or online link to fill out with all of your personal information, with questions on how you will prefer to hold title, if you’d like to get a survey (most of the lenders ask for it anyway) and other important things. If you are planning not to be present at settlement, arrangements will be made to accommodate your remote signing. Some of these accommodations require signing remotely in front of a notary public (if you are in the US) or at a US consulate if you are out of the country.
Title Insurance and Re-Issue Option
The Title Insurance Policy protects the lender and you against claims on the title. Lender’s Title Insurance is mandatory if you obtain a mortgage. Owner’s title Insurance is optional. The Lender’s Title Insurance will only cover the loan amount, the Owner’s will cover your downpayment. You will have the option to chose the Title Insurance policy, regular or enhanced, the settlement office will explain the options to you. In order to issue the policy the settlement office will run title research and will let us know if there are any issues.
Before we go to closing we will conduct the final walkthrough inspection. We will compare the condition of the house to the one at the time we wrote the offer/did the home inspection. We will verify that all home inspection items (if any) were addressed, we will make sure that all personal property (other than property the parties agreed on leaving) was removed, that the property is free of trash and broom cleaned. We will also read the electric/gas/water meters and contact the utility companies to have them start service under your name. we will promptly report deficiencies (if any) to the listing agent. I always prefer to do the inspection the day before settlement so the sellers have enough time to address last minute issues that we identified at the final walkthrough. We will get the settlement statement from the settlement office for review. The settlement office will give you directions on funds that you need to bring to closing (most of them require a wire transfer).
This is the most exciting event in the process. Today you will become the owner of your chosen property. The key for a successful settlement is the preparation. We will do all that we can to address and resolve all issues ahead of time. We will make sure you get the settlement statement ahead of time, ask and verify all the information and have the settlement office answer and make corrections if necessary. The settlement attorney, who represents the transaction (not any of the parties) will walk you and the sellers through all of the documents, answer your questions and have you sign on all the documents. It is recommended to schedule the settlement for a time that alines with the bank office hours so that there is someone available to be reached if any issues should arise. It is not recommended to schedule closing on the last day of the month, when all the settlement offices and banks are usually very busy. Please do not forget to bring your government issued photo ID and/or any other documents you were instructed to bring. After signing the documents, while the settlement office is making copies for us, it is a great time to have conversation with the sellers, get the keys and garage remotes, get specific information on mail, trash, recycle collection days and any other things that come to mind.
Last Few Things…
Let’s make sure you started service with the utility companies, to avoid the process of disconnection and reconnection, along with any fees that accompany these processes. Make sure you have the keys, manuals, warranties and garage remotes (if any). I you bought a condo let’s make sure you filled out the association forms and that you registered with their office. Some of them have restricted moving times and some of them have pool, gym and parking passes.
You are officially a property owner!
Buying a new home can be stressful, but it shouldn't be...
Learning and being familiar with the process is the first important step to make this process less stressful and enjoyable, after all buying your home or investment is an exciting thing.
Hiring a professional agent with long experience, dedication, patience and with good reputation in the area is the second important thing.
On this web page I will walk you through the process of buying a property and will give you some helpful directions on how to start the process.