Breaking it Down: TheBuying Process
The reasons for buying a home are personal, so the first thing to consider is what you want to achieve in purchasingahome.
Buying a home is filled with both strategic thinking and emotions With ever-changing market conditions and other variables, various factors may affect the path you takeinfindingthepropertythat?sright for you
Asyour consultant,an Engel & Völkersadvisor helpsyou understand the market landscape and determine, based on your goals, if now is in fact the right time to buy and thenidentifyingthecorrect approach
Asfar asthepropertyitself,it?swiseto invest thetimeto outline the key factors and features relating to your search,including(seenext page):
So, you'reready to buy ahome. Here's your next 111t o-dos:
AccordingtoRealtor com®
Get Informed - Do Your Research
1 Researchtherealestateindustryandlegalservicesto understandwhat'savailabletoyou,includingtheentire process andnecessityfor legalrepresentation
2 Achieveproficiencyinfederalandstatefair housinglawsthat protect your rights Youwant tobesurethat you'renot being deniedtheopportunitytomakeanoffer onahomeor secure financingbasedonyour race,religion,nationalorigin,sex, disability,and/or familystatus
3 Researchlocalandnationaldownpayment assistance resources Theseprogramsconhelpmakeyour homepurchase moreaffordable
4 Checkyour eligibilityfor downpayment assistanceprograms
5. lf you'reaVeteran,researchhomeservicesandloan programsavailabletoyou
6 If you'reaVeteran,determinewhether youqualifyfor a zero-downVAhomeloan Makingadownpayment isasignificant hurdlefor moneyhomebuyers Programslikethesecanopenthe door tohomeownership,for thesewhoknowabout themand qualify
7 Learn about local home prices, inventory levels, and market demand in your desired area. If you are in a hotter market, high demand for homes may affect your buying process and offer strategy
8 Ensurethat allpersonalandfinancialinformationremains confidentialtomitigateriskof identitytheft.Researchthesteps that youcantaketoprotect your identitywhenbuyingahome
9 Throughout theprocess,knowtherisksof postinghome searchdetailsonsociaImediatoavoidbeingtargetedfor fraud
10 Dosomeresearchonwhat homefeaturesarecurrently popular tohelpidentifyyour preferencesandhowthismay affect thevalueof thehome
Set Homeownership Goals and Budget
11 Obtainacopyof your credit report,includingyour credit score,toassesswhereyoustand,andensureyouhavetimeto disputeerrorsandimproveyour score Thebetter your credit score,themorelikelyyouaretobeapprovedfor amortgageand receiveabetter rate
12 Consider all your homeownership wants and non-negotiable needs You may need acertain number of bedrooms based on the size of your family, or afirst-floor bedroom and bathroom if you plan to age in place
13 Set your budget andbemindfulof thecompletecost of
homeownership.Consider thepurchasecost of thehomeand anyongoinglivingandmaintenanceexpenses Thoseongoing expensesmayincludebut arenot limitedtorealestatetaxes, heating,AC,water,yardandappliancemaintenance,repairs, homeownersassociationfees,andcommutingcosts
14 Assessyour financialabilitytopurchaseahome Thetypical ruleof thumbisthat your totalmonthlyhousingpayment (mortgage,taxes,insurance,etc )shouldn't bemorethan30% of your grossmonthlyhouseholdincome,but individual situationsmayvary
15 Assessyour desiredmarket'scompatibilitywithyour budget basedoncurrent incomeandother considerations
16.Professionallyadvocatefor yourself throughout theentire process Todothat,youshouldpromoteanddefendyour interestswhilekeepingemotionsinchecktoensureyouget your desiredoutcome
St art Your Home Search
17. Establishandadheretoaschedulefor househunting, mortgageapproval,andclosingtomeet your desiredtimeline If youmissanymilestonedeadlines,youcouldbeat riskof losing your downpayment or losingthehomefor purchase
18.Learnhowlocalmarketscouldaffect your buyingandowning process Fewer homesfor sale,futuredevelopment plans, schoolratings,accesstotransportation,andcommunity amenitiesareallelementsthat mayaffect demandinagiven market
19 Scout listingsandonlinemarketplacesfor suitable properties
20 Set up real-time alertson home search marketplaces to get notifications when matching homes hit the market, and for open housesand price reductions
21 Comparepropertiestoyour wantsandneedslist toensure theyalignwithwhat you'relookingfor
22 Tapyour personalnetworktouncover additionalproperties of interest that arenot yet publiclylistedandmaybecome availablefor salesoon
23 Contact homeownersindesiredareastoseeif theyare consideringselling
24 Gather informationabout anyhomesthat might befor sale but arenot activelybeingmarketed
25 Virtuallypreviewpropertiesthat you'reinterestedin
26 Select homesfor viewingthat alignwithyour specific needs
27 Schedulemultiplein-personhomeviewingsbycontacting eachhome'slistingagent Scheduleseparateappointmentsat timesthat suit thelistingagent but maynot alwayssuit you
28 Periodicallyreevaluateyour needsandrefocusyour propertysearch,asnecessary
29 Exploreallavailableresourcestolearnmoreabout
prospectiveneighborhoods.Besuretospeaktolocalexperts whounderstandtheneighborhoodandwillgiveyouhonest feedback
30 Tour theamenities,schools,andpointsof interest,andtest commutetimesinyour chosensearcharea
31. Cross-referencelocalcrimeregistriesfor theneighborhoods youaresearching
32 Educateyourself onwhat tolookfor inpropertydisclosures of homelistingswhileyousearchtomakeinformeddecisions Requiredpropertydisclosuresvarybystateandmayinclude,but arenot limitedtorightsof way,upcomingspecialassessments, whether thohomeisinafloodzone,post termitedamage,and thepresenceof leadpoint.
33 Staycurrent withthelistingmonthsof market inventory As withdaysonthemarket,thisindicateshowcompetitiveagiven market isandshouldinformyour offer
34 Consider measuresof homevaluebeyondpriceper square foot.Theseincludeneighborhood,proximitytoworkand communityamenities,andcommunitydevelopment plans Be suretoconsult withalocalexpert toget themost comprehensiveinformation
35 Researchmunicipalservicesandother relevant neighborhoodinformation
36 Beinformedabout potentialneighborhoodnegativessuch asnoiselevels,venues,or operationsthat couldimpact your propertyvalue
37 Checkapplicablezoningandbuildingrestrictionsif youplan torent out your homeor addaunit togenerateshort-termor monthlyrentalincome
38 Understandpublic propertyandtaxinformationfor potential homes It'simportant tobeinformedabout thepossibilityof futuretaxincreasesandpropertyassessments,whichwillaffect thepropertytaxesyouowefromyear toyear
39 Gather andconsider important dataonutilityavailabilityand costs For example,you'llwant toconfirmif thehomehasgood high-speedinternet access
40. Research any environmental factors and risks that could affect your home, such as flooding, wildfire, heat, air quality, and noise Some of these factors will effect the cost of ownership For example, if the home you purchase is in aflood zone, you will need to obtain flood insurance
41 Narrowdownyour tophomechoicesfor acloser lookbefore consideringmakinganyoffer
Prepare Financing
42 Analyzeyour financestodeterminethetotaldownpayment andclosingcostsyoucanafford.
43 Gather andassessqualitylender resources Askfriendsand familyfor recommendations
44 Consider at least threemortgagelendersduringthepre-
approvalprocess.Mortgagerates,terms,andeligibilitymayvary fromlender tolender
45 Familiarize yourself with the mortgage pre-approval process Pre-approval meansthat alender has verified your income, credit background, and other factors and has provided aconditional commitment for an approved mortgage amount With pre-approval, your offer will be considered for more seriously
46 Prepareandcollect personalfinancialinformationlikepay stubs,credit cardstatements,andother existingloans/debt,and sharethat informationwiththelendersyou'reconsidering
47 Collect andcomparemultiplefinancingoptions Beyond traditionalmortgages,lookintolesser-knownalternativeoptions likeseller financingor rent-to-ownprograms
48 Explorevariousfinancingoptionstofindthebest fit for your needs Manypeopleuseaconventional,fixed-rate30-year mortgage,but mortgageswithother terms(e.g.,15-and10-year fixedrate,adjustablerate,andassumable)might alsobeoptions
49 Coordinatewithyour lender todiscussdiscount points, whichyoucanpaytolower theinterest rateonyour loan
50 Analyzeloanestimates Loanduration,sizeof your down payment,fees,andother loantermscanaffect your overall mortgagecosts
51 Obtainapre-approvalletter fromyour lender,whichismore comprehensivethanpre-qualification Pre-approvalisawritten commitment fromalender that stipulatestheamount theywill lendyoufor ahomepurchase
52 Carefullyreviewthepre-approvalletter fromyour lender to understanditscontentsandasknecessaryquestions
Making Your Offer
53 Reviewstatisticstoseewhat percentageof thelist price sellersinyour areaarecurrentlyreceiving Thiswillhelpyou decidewhether tooffer theaskingprice,or adjust your offer belowor abovetheaskingprice,tomakeyour bidmore competitive
54 Consider thecurrent,localaveragedaysonthemarket to gaugepropertypricingandmarket competitiveness Fewer days onmarket indicatesgreater demand,whichmeansyoumay needtoraiseyour offer or offer additionalincentivestomake your offer morecompetitive
55 Payfor aprofessionalcomparativemarket analysis(CMA) beforemakinganoffer toensureit'scompetitive ACMAisa report that detailsrecent homesales,localmarket activity,and salespricestohelpyoucraft asuccessfuloffer
56 Researchindependent homevaluationinformationfrom onlineresourceslikeRealtor comtoassessanoffer pricethat considersthesaleof similar homesinthearea It'simportant to makeanoffer that'sinlinewithlocalmarket conditions You don't want tooverpayfor ahome,or makeanoffer that'ssolowit won't evenbeconsidered,soit'sgoodtotalktoanindependent Source:Realtor com®
adviser whohaslocalmarket knowledge.
57. Consider hiringarealestatelawyer for legalrepresentation asyoubuildyour offer andfor legalduediligenceasyoureview contractualdocumentation
58 Reviewasamplesalescontract topreparetomakeanoffer Thisdocument outlineseveryfacet of thetransaction,but it may not includeeverythingyouwant inthetransactionor fromthe seller,sodon't assumeeverythingisthere
59 Understand common contract contingencies and the importance of including protective clauses in your offer. These may include but are not limited to your ability to secure financing that coversthe appraised home value, inspections (home, radon, lead, etc.), closing date, date of possession, and owner lease-back terms
60 Learnabout anypurchasingincentivesthat youmight be eligiblefor Homesellersmayoffer concessionslikeapre-paid homeowner warranty,closingcosts,or allowancefor home improvements/repairsasindicatedbyahomeinspection You willneedtonegotiatetheseasyour ownrepresentative
61 Ensureyour offer willstandout asthemost attractiveinthe current market Bereadytocompete-manyhomestodayare receivingmultipleoffersandbiddingwarsarecommon
62 Craft anoffer that iswellpositionedtobeaccepted,and submit it totheseller'sagent Anoffer typicallyincludeshow muchyouarewillingtopayfor thehome,howmuchearnest moneyyoucanprovide,whenyouwant tocloseonthehome, andthedeadlinefor theseller torespond
Negot iat ions and Offer Accept
ance
63 Identifyandprioritizeyour maingoalsfor contract negotiations
64 Familiarizeyourself withnegotiationbest practices Be mindfulof howyour bodylanguageandfacialexpressionscan influenceasuccessfulnegotiation
65 Develop anegotiating strategy to secure the best terms In addition to price, consider terms such as repairs, closing costs, or the timeline for closing
66 Negotiatethebest pricewiththeseller'sagent Theseller's agent willbenegotiatingonthehomeowner'sbehalf Youwillbe negotiatingwithaprofessionalwholikelyhasextensive experienceinthisarea,andyoumaybeat adisadvantage
67 Bepreparedfor multiple-offer situations Don't get discouraged,andhaveyour negotiationstrategiesready
68 Consider usingoffer strategieslikeonescalationclause, whichraisesthepriceyou'reofferingbyacertainamount over thepricethat another buyer isoffering;offeringflexibilityon move-in/possessiondate;or waivingvariouscontingencies
69 Exploreoptionalcontingencies,andunderstandtheir advantagesanddisadvantages If youagreetowaivethe inspectioncontingency,for example,youareacceptingtherisk of purchasingahomethat mayhavemyriaddefectsor require
additionalfundstorepair or bringuptocode
70. Beawarethat allknownmaterialdefectsshouldalwaysbe disclosedtoyou Knowwhat questionstoask,andensureyou receiveandcomprehendallrequireddisclosureformsbystate andfederallaws Thoseformsvarybystate
71. Agreetofinaltermswiththeseller,andsignthecontract.In somestatesonattorneymayberequired,
72 Verifythefinaloffer issignedbyallparties
73 Prepareyour lender for listingagent calls Theagent representingthehomeseller willcontact your lender toconfirm pre-approvalandarrangeother settlement details Thesedetails willlikelyfavor thehomeseller,sincethat agent isrepresenting their interests,soyoumaywant toparticipateinthosecallsto negotiateonyour behalf
Facilit at e Closing
74 Coordinatecommunicationseffectivelyamongallparties, includingyour lender,theseller'sagent,theclosingattorney,and anyadditionalthirdparties
75 Seekadditionalguidancefor transactionsinvolvingshort sales,foreclosures,or bank-ownedproperties.These transactionsofteninvolveadditionaltitle,ownership,and financingconsiderations,andtheymaybeas-is -meaning,the propertiesmaybedamagedor requirecostsfor repairsthat the buyer isacceptingasaconditionof purchase
76 Estimatethegrossout-of-pocket cost of completingthe transaction Thismayinclude,but isnot limitedto,closingcosts, atitlesearch,financingpoints(to"'paydown"themortgage interest rate),andtransfer taxes
77 Acquaint yourself withfloodinsurance If thehomeyou purchaseisinaFEMA-identifiedfloodzone,youmust obtain floodinsuranceasaconditionof ownership Youmayalso consider addingfloodinsurancetoyour regular homeinsurance policy,becausemost regular policiesdonot cover damagefrom flooding.
78 Learn about title insurance, and consult aqualified insurance broker Title insurance covers any pre-existing title problems that you may discover after you've purchased the home (e g tax liens, unpaid/outstanding mortgages, previous ownership claims)
79 Fullyinvestigateyour optionsfor ahomeinspector,title company,appraiser,andother services Forgoingahome inspectionisnot advisedastheseprofessionalinspectorswill provideacomprehensiveassessment of ahome'scurrent conditionandrisks
80 Createalist of requiredandoptionalhomeinspections, includingenvironmental,roofing,andmold Thiswillhelpyou determinewhat inspectioncontingenciestoincludeinyour purchaseoffer
81 Ensurethat necessarypropertysurveysareordered A propertysurveywillhelpyouunderstandwhereyour property
beginsandends,anddetermineanypotentialissues-suchas easementsor encroachments-beforeyoutakeownershipof the property
82 Discussanyconcernsarisingfromthehomeinspection Use anynegativefindingsfromyour homeinspectionreport as leveragefor repairsor credits
83 Track and meet all contract deadlines Depending on the terms of your offer, these may include deadlines for inspections, final financing/loan, down payment and earnest money deposits into escrow, title searches, and settlement date
84 Order theappraisal Confirmwhether your lender willaccept anindependent appraiser or requireonappraisalmanagement companytoconduct theappraisal
85 Questiontheappraisalreport if it affectsyour financing Checkfor errorslikesquarefootage,inadequatehome comparisons,or incorrect descriptionsof thehomeor neighborhood
86 Order thetitlesearch Acleanpropertytitlemeansthebuyer andlender agreetherearenoclaimsonthepropertythat could becomeanissueafter ownershipistransferred
87 Regularlycontact your lender toensuretheloanprocessis ontracktomeet theclosingrequirements
88 Ensureanynecessaryfunds,likeearnest moneyor down payments,arereceivedbythestateddeadlinestoavoidanyrisk of theseller terminatingyour contract
89 Ensureallpartieshaveallformsandinformationneededto closethesale Missingor latepaperworkcancausedelays
90 Checkaddendumsandalterationsfor agreed-uponterms
91. Takenoteof thelocationanddetailsof your closingmeeting.
92 Confirmandcommunicatetheclosingdateandtimetothe seller'sagent,notinganychanges
93 Scheduleandconduct afinalpropertywalk-through Create acomprehensivechecklist of your concernsregardingthehome andthenconfirmthat anyagreed-uponrepairswereaddressed or fixedbytheseller
94 Confirmtheclear-to-closestatus,indicatingalldocuments andconditionstoapproveyour loanhavebeenmet withyour lender.
95 Reviewyour closingstatement It explainsthetermsof the mortgage,theprojectedmonthlypayments,andhowmuchyour feesandclosingcostswillbe
96 Double-checkalltaxes,dues,andprorationsrelatedtoyour purchase
97 Request thefinalclosingfiguresfromtheclosingagent This isthetotalamount of moneythat youwillhavetobringtothe closingtable
98 Reviewyour titleinsurancecommitment carefullytoensure allinformationisaccurate
99. Be aware of wire fraud risks, and verbally verify all wiring instructions with the seller's agent before transferring funds Get the detailed instructions from your closing company, and be leery of any messages you receive that request changesto the original instructions
100 Providereceipt of escrowdeposit totheseller's agent/broker toverifythisfinancialstephasbeencompleted
101 Gather allrequiredformsanddocumentsfor closing Typically,you'llneedaphotoIDandacashier'sor certifiedcheck (or receipt of awiretransfer)
102 Performanyremainingclosingactivitiestocompletethe transaction
103 Reviewallclosingdocumentswiththeclosingagent or attorney Bepreparedtosignatonof paperwork
104 Distributefinaldocumentstoallinvolvedpartiesfor their records You'llwant tokeepthisimportant paperworksafe
105 Verifyreceipt of allkeys,accesscodes,garagedoor openers,andmanualsfor allequipment andappliances
Post-Closing Act ivit ies
106 Prior tomoving,consider rekeyingyour locksandchanging accesscodesasanextraprecautiontosafeguardyour home fromanyonewhomayhavehadaccessprior toyour ownership
107 Remember totransfer allutilitiesandservicestoyour new residencesoyoudonot incur costsonyour former residence Thisensureseverythingisupandrunninginpreparationfor your move-indate
108 Turnyour homeinspectionreport intoamaintenanceto-do list
109 Fileclaimswithyour homeowner'swarrantycompanyas needed Ahomewarrantyisapolicythat coversthecost of major repairsor appliances
110. Stayengagedandproactivelyfollowuponanypending itemsor concernspost-closing Keeparunningchecklist handy toensureyoustayontopof anypotentialwarranties,including their expirationdates
111.Arrangefor themove-indayinyour newhomebycontacting movers Buyyourself abottleof champagne
Congratulations, you're a new homeowner now
Or do 1t hing... Find abuyer'sagent
*Actualservicesor to-doswilldependontheneedsof thebuyer andthe transaction-not all111thingswillneedtobedoneineverytransaction
Source:Realtor com®
