Purchasing a property is most likely one of the biggest financial decisions you will ever make. Whether you are a First-time Homebuyer or you are an Experienced Buyer, the decision must be made with care and knowledge. Our job is to educate you on the home buying process and find you the best home options to fit your needs. The process can feel overwhelming but please Contact Us so we can help you with your search and make it a great experience!
Why Do You Want To Buy?
People buy homes or go shopping for a different home for several reasons. Have you outgrown your current home? Are you looking to invest in a rental property? Would you like a larger yard or outside living space? Do you want to explore getting a vacation home? Would you just rather live in a different area? By having a clear sense of your reasons for buying, you will help yourself in searching and choosing the right property to purchase.
Property ownership is an excellent investment. This is true whether you are looking for your dream home, a vacation property, or to expanding your current investment portfolio. Owning real estate is one of the best ways to build equity or to obtain a greater return on your initial investment.
Before you start shopping for your property, it is a good idea to make some preparations, so Contact Us so we can help you with the process!
Preparations to Take as a Buyer
Gather Your Files
Before getting approved for a home loan, it’s important to gather a number of important financial documents. In order to secure financing on your property you will likely need the following documents:
- Bank Accounts Statements
- Investments – 401K statements, life insurance, stocks, bonds, etc.
- Debt – credit cards, auto loans, student loans, etc.
- Work History – recent pay stubs and employment history
- Tax returns for the last two years
- Copies of leases for investment properties
Check Your Credit Rating
Your credit rating will have an impact on what type of property you can buy, and at what price. It is first recommended to check your credit rating with an experienced lending institution and discuss financing options. After that, we can also determine the amount you are pre-approved to borrow and what home price you can afford. The lender will research your credit ratings from the three credit reporting agencies Equifax, Experian and Trans Union. If you have questions about which lending institutions may be able to help you, please Contact Us. We will be happy to recommend experienced, knowledgeable lenders in the fields of residential, construction, commercial, or investment real estate.
Be Careful With Your Finances
If you are in the market for a new property then now is not a good time to make sudden career changes or other large purchases. You want to approach your property purchase from a position of financial stability. Buying a property requires making many important financial decisions, understanding complex issues, and completing lots of paperwork. It helps to have experienced experts in your corner when undertaking such a large purchase. We can guide you through this process, find suitable homes, and advise you of your options.
Here are some factors to consider when choosing your real estate professional:
- Look for a true professional – one who has experience completing transactions similar to yours.
- Interview a few agents – Are they familiar with the area in which you are interested?
- Ask how much time the agent will have for you, and if they are available at night and weekends.
- Ask about their credentials and education – A good agent will continually strive to improve and gain knowledge…this will be a huge benefit to you if you choose them to represent you!
- Ask to see client testimonials or a list of professional references.
- Choose an agent who listens to and responds to your needs and concerns.
- Does the agent return your calls, texts, and emails promptly? Communication is key!
Once those preparations are out of the way, it is time to find the right property for you….
Take a Drive
Get to know the neighborhoods, complexes, or subdivisions, which interest you. Drive around and get a feel for what it would be like to own a property in the area. Start getting a sense of the properties available in those areas.
Get a List of Homes
Do a detailed property search based on the wants and needs you have in your next home. Looking at home styles, pictures, and options through the Internet can help you get a better idea of homes that you prefer.
Narrow Your Search
Select a few properties that interest you the most and have Team Baker make appointments for you to visit them! Ask questions about the potential long-term resale value of the properties you are considering.
Now It’s Time to Buy
Once you have picked out the property you want to purchase, we can help you make an offer that the seller will accept. An agent will investigate the potential costs associated with the new property and if it fits within your budget.
The Buying Process
So you have found your favorite home and are ready to make an offer! Purchasing a home is a process that has several steps. As you move forward with buying a home you want to make sure you have all the facts and make sound decisions. You will want to work with an agent who is seasoned in the buying process and has your best interests in mind. If you work with us you can rest assured we will represent you in the best possible way and offer you answers and results throughout the entire process.
Offers and Negotiation
Once you have found the home that best fits you needs we are ready to write an offer for that property. Writing a offer is simply making a formal offer to buy a home…it gives the sellers a first offer price, terms or the agreement, and proposed timeline for closing.
Purchase Agreement and Deposit
An effective purchase agreement is a legal arrangement between a potential purchaser and the property seller. We will help you write an effective purchase agreement and make sure you have any important areas covered before you submit the document for review. Generally when making an offer, buyers include a check as a deposit. This deposit is referred to as the earnest money deposit. The amount varies from purchase to purchase but the basic reason for the deposit is to show the seller you mean business and “earnestly” intend to purchase their property.
Important tips to keep in mind:
- Keep Records of Everything – It will be extremely useful to take all verbal agreements including counter-offers, addendums, amendments and to convert them into written agreements to be signed by both parties. We will assist you in drafting all the paperwork associated with your purchase and make sure that you have copies of everything.
- Stick to the Schedule – Now that you have chosen your offer, you and the seller will be given a timeline to mark every stage in the process of closing the real estate contract. Meeting the requirements on time ensures a smoother flow of negotiations so that neither party involved is ever in breach of their agreements.
- Communicate with Your Agent – As you move through the process you should be in contact with your real estate agent on a regular basis. If you choose to work with Team Baker we work to answer any and all questions, helping clients understand every step of the process so they are comfortable all the way to closing. During the process we will keep you constantly updated, so you will always be prepared for the next step.
The Closing Agent
Generally a title company or an attorney will be selected as the closing agent. The closing agent will research the complete recorded history of the property to ensure that the title is free and clear. There may be recorded easements, encroachments, restrictions, and/or agreements that would limit the rights to use of the property.
Once the seller accepts your offer, you will want to have a licensed property inspector inspect the property. This needs to happen within the timeframe that was agreed upon in the purchase agreement so timing is critical. Contact Us and we can recommend several different home and property inspectors that specialize in certain markets or types of property.
Depending on the outcome of these inspections, one of two things may happen:
- Either each issue is successfully closed and the contingencies will be removed, bringing you one step closer to the closing table, or
- The buyer, after reviewing the property and the inspection documents, requests a renegotiation of the terms of contract (usually the price).
Appraisal and Lending
It is necessary that you keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application. If the agreement is conditional upon financing, then the property will be appraised by a licensed 3rd party appraiser to determine the value for the lending institution. This is done so that the lender can confirm their investment in your property is accurate. Appraisers are specialists in determining the value of properties, based on a combination of square footage measurements, building costs, recent sales of comparable properties, operating income, etc.
If you are obtaining a loan, you will be required by your lender to purchase a certain amount of insurance on the property. The value will depend on the lending institution and the purchase price of the property. You may be able to save hundreds of dollars a year on homeowners insurance by shopping around and speaking to several insurance professionals. You can also save money with these tips.
- Consider a higher deductible — Increasing your deductible by just a few hundred dollars can make a big difference in your monthly premiums.
- Ask your insurance agent about discounts — You may be able get a lower premium if your home has safety features such as dead-bolt locks, smoke detectors, an alarm system, or one of several other quality and safety features.
- Insure your house NOT the land under it — After a disaster, the land is still there. If you do not subtract the value of the land when deciding how much homeowner’s insurance to buy, you will pay more than you should.
Please Contact Us and we will be happy to recommend experienced knowledgeable insurance agents for every property type.
If you have come this far, then it means that we are almost to the point of congratulations, but not yet. Do not forget to tie up these loose ends:
The final inspection takes place a day before, or the day of your property closing. You will visit the property to verify that all is in working order; everything is the same as when you last viewed the property, that there were no extra items left behind, and that everything included in your purchase is still at the property.
Home Services and Utilities
Once you go to the closing table the home is yours and so are the utilities. As we approach the closing date, we will provide you with a list of useful numbers for the activation of home services and utilities for your new home.
We are ready to assist you should an unforeseen issue arise, even in the final stage before closing. Something at the property breaks down, or some other minor detail – no need to worry. We have encountered these problems before so we know how to handle them efficiently and in a stress-free manor.
Going to Closing
The closing agent will furnish all parties involved with a settlement statement, which summarizes and details the financial transactions. You and the sellers will sign this statement, as well as the closing agent, certifying its accuracy. If you are obtaining financing, you will have to sign all pertinent documentation required by the lending institution as well. If you are unable to attend the scheduled closing, arrangements can be made depending on the circumstances and the notice that we receive.
If you are bringing funds to the transaction, you can elect to either have the funds wired electronically into the closing agent’s escrow account, or bring a certified bank check to the closing in the amount specified on the settlement statement. The seller should arrange to have all property keys and any other important information for you at the closing so that you may receive these items at this time.
CONGRATULATIONS, you are a homeowner!!
Purchasing a home is a very exciting event but the process can be overwhelming at times. Contact Us today if you are looking for a home or would like more information on some of the options you have in your area.