Buying a home requires a lot of time and effort, but these steps can help make the home buying process manageable and help you make the best decisions possible.
1. SELECT A REALTOR
Buying a home is a major financial and emotional undertaking and the process is complex. With the internet and websites like Zillow, Trulia and Realtor.com, you can find homes for sale in your area. So do you need to use a Realtor? The answer is yes. Buying real estate is a big decision. The best advice is to find a REALTOR® who will guide you through the local market conditions. (REALTORS® aren’t just agents. A REALTOR® is a professional member of the National Association of REALTORS® and adheres to its strict code of ethics).
The Listing Agent is working for their client “the Seller” and trying to get top dollar for their home. The Buyer should always have a Buyer’s Agent who represents them exclusively. In return for that exclusivity, you’ll likely have to sign a contract saying that you won’t work with any other broker for a specified period of time. The Buyer’s Agent will work protect their client’s interest, to negotiate the best terms and price for the buyer, show the Buyer all properties the Buyer is interest in that fits their criteria and budget, and assist the Buyer with service providers for the inspections, mortgage, and home warranty. And best of all, the buyer agent’s services are free to the buyer. In most situations, the commission for the sale of a home is paid for by the seller, not the buyer.
2. GET PRE-APPROVED
Potential buyers benefit in several ways by consulting with a lender and obtaining a pre-approval letter. During the pre-approval process the Buyer has the opportunity to discuss loan options and budgeting with the lender, the lender will check on the Buyer’s credit and alert the buyers to any problems. The pre-approval gives the Buyer the maximum amount they can borrow so they can determine the price range for their home search. Sellers are more willing to negotiate with people who have proof that they can obtain financing.
3. ANALYZE YOUR NEEDS /SELECT PROPERTIES
The Jeff Buffo Team always conducts a CITO (Buyer Consultation) so we have an opportunity to meet with the Buyer to evaluate and determine your wants and needs. During this process the Buyer can determine their “Must Have Features” and “Features They Want”. We have access to all properties on the local listing service (in our area it is FMLS – First Multiple Listing Service and GAMLS – Georgia Multiple Listing Service). We will search homes that meet your criteria, share with you all available properties and you can determine which properties you would like to view.
4. VIEW PROPERTIES
The Jeff Buffo Team will schedule showings and accompany you on each appointment. When you walk through a home, you should consider how the space functions for your lifestyle and which of your criteria is met. Discuss each home you see with The Jeff Buffo Team, and provide candid feedback. Your expectations and the marketplace will begin to converge, and The Jeff Buffo Team will be able to adjust certain parameters such as location and features in order to present you with alternatives. It is a good idea to use the property printouts we will provide to compare each listing.
5. MAKE AN OFFER TO PURCHASE/NEGOTIATE TERMS
When you decide on a home and are ready to make an offer, The Jeff Buffo Team will help you formulate an offer based on comparable listings and sales, and current market conditions which is a Comparative Market Analysis or CMA. Remember, when you find a home you absolutely love, someone else may love it too so it’s important to act quickly and make an educated offer based on the CMA. To start the process, The Jeff Buffo Team will draw up a contract that includes your offering price and other terms and contingencies. Buyers often focus on price, but there are other important terms to a real estate contract. You can include any terms you like, but the more you add, the more likely the seller is to object. The most common elements of a real estate contract include financial contingency, inspection contingency, earnest money, closing attorney and closing date.
6. REMOVE CONTINGENCIES
Financial Contingency – A financial contingency stipulates that you will buy the home subject to obtaining a mortgage. Now that the contract is signed, it’s the time to start talking to your mortgage broker or banker about the current interest rates and types of loans. If you cannot obtain a mortgage, then the contract will be void. The terms of the mortgage must be stated in the contract, and you will also need to establish a time frame for securing financing.
Home Inspection Contingency – The buyer is responsible for hiring and paying for a thorough inspection of the property by a licensed home inspector protects you against structural or material problems that are not detectable in a casual walk-through. An inspector will make sure that all mechanical systems are working properly and will report any repairs that need to be completed. The inspector will probably find some defects. The parties will negotiate who will be responsible for the repair of the defects. If no agreement is reached the contract may become null and void.
Appraisals – An appraisal is an unbiased professional opinion of a home’s value. Appraisals are almost always used in purchase and sale transactions to determine whether the home’s contract price is appropriate based on the home’s condition, location and features. Lenders want to make sure of the value of a property because the home serves as collateral for the mortgage.
Title Search – The closing attorney will do a title search of the public records. Records searched include deeds, mortgages, paving assessments, liens, wills, divorce settlements and other documents affecting title to the property. This is when verification of the legal owner is made and the debts owed against the property are determined.
The Jeff Buffo Team will work closely with you, your lender, the closing attorney, and the seller’s agent to make sure everything is in place for a smooth and efficient closing. The closing attorney reviews the new lender’s instructions and requirements, reviews instructions from other parties to the transaction, reviews legal and loan documents, assembles charges, prepares closing statements, and schedules the closing. As of October 3, 2015, The TILA-RESPA Integrated Disclosure (TRID) rule from the Consumer Financial Protection Bureau® is in effect, which brings changes to the transaction process. Lenders are required to provide your Closing Disclosure three business days before your scheduled closing. You should thorough check that all the details are correct. Important details to check for are the spelling of your name, loan term, loan amount, loan rate, loan prepayment penalty, estimated monthly payment, escrow items, estimated closing cost and estimated cash to close. If something looks different from what you expected, ask why. Now is the time to resolve problems. You will be responsible for bringing the balance of your down payment and any closing costs (such as lender fees, title company fees, and state and city transfer taxes) to the closing in the form of a cashier’s check. At the closing, the attorney will guide you through the many documents you need to sign.
CONGRATULATIONS, YOU ARE A HOME OWNER!