The Home Buying Process

Below you will find the steps involved in buying a home. Buyers should use their own judgment, along with the help of a competent realtor, when buying real estate!

Pre-approval

Buyers should at least be pre-qualified for the loan on their new home. Pre-approved for the loan is preferred. This means that the buyer's income, savings, credit and debt obligations have been verified by the lender and the loans approved with the exception of a review of the property appraisal. Sellers consider a pre-approved buyer almost as good as a cash buyer. Sellers take lower offers from pre-approved buyers because they know that many "pre-qualified" buyers can not really perform.

Select Property and Make Offer

Once a property is selected the buyers real estate agent will prepare the purchase agreement. The purchase offer will usually include contingencies. The sale can be contingent on loan approval, inspections, sale of the buyers current home, etc. If there is any doubt as to the value af the property the agent can do a comparative market analysis of the home. Attaching comparable sales to the offer is a good way to support the purchase price offered. The seller can either accept the offer or counter the offer. Buyers can, of course, either accept the counter offer or make their own additional counter and so on. Hopefully buyer and seller eventually agree on the purchase price and terms. Congratulations! At this time escrow is opened by the buyers agent and the buyers deposit is held in the escrow account. The escrow company is a neutral third party that holds all funds and makes sure all funds are deposited before the property can close. Title and escrow companys also perform a title search on the property and record the property at closing.

Inspections

Usually the buyer negotiates an inspection time period (even if it's an "AS IS" offer). Often the buyer has 14 days (negotiable) to perform inspections on the property. The agreement is contingent on the inspections results and the buyer approving of the property. Common inspections are termite, home inspection, preliminary title, septic and well. During the inspection period the seller provides all other disclosures to the buyer. Some of the common disclosures are the Transfer Disclosure Statement, Zone Disclosure Report, Water Conservation and many others. If the home is a condo, a mobile home or is in an association all association documents and rules and regulations are forwarded to the buyer. It is very important for the buyer to find out all they can about the property. All documents are signed read and approved by buyer. On the 14th day (or other negotiated time period) of escrow, if the buyer accepts the homes condition, the buyer will put in writing that they remove all physical inspection contingencies. If the buyer discovers a problem with the home during the inspection period the buyer can either try and negotiate a price reduction, a credit from the seller or cancel the escrow. The buyers deposit will be returned if the buyer notifies the seller of their wish to cancel escrow during the inspection period.

Sign Loan Documents

Near the middle of the escrow period the buyers loan documents will be prepared. The buyers will sign the loan documents at the title company with the escrow officer, accompanied by the lender and the buyers agent. At this time buyers decide how they would like to hold title to the property, also buyers bring a cashiers check for the remaining amount of the down payment to be deposited in escrow. Approximately five days prior to the close of escrow the agent and buyer will do a "Buyers Walk Through" to ensure that the property is in the same conditon as when the offer was made.

Closing

On the day escrow is sheduled to close the lender will wire the loan funds to the title company. The escrow officer will record the property deed and dispurse funds to the seller. The agent will meet the buyer at the property and the buyer takes possession. Congratulations!

I perform all of these services for my clients. Do you want to work with an agent who knows what they are doing? Contact me today!