Congratulations! Buying a home, whether it is your first, your last or somewhere in between it can be the most rewarding, exciting and sometimes very frustrating process. Here at Frank Smith, our agents take pride in helping you through this roller coaster of emotions in purchasing.
Here are some steps to purchasing your home:
Define Needs for Your Home
Do you have a mental picture of what you need? Have you separated the must haves to would like? Your “perfect” home should have a mix of both. What is the timeframe? You should have a rough time line.
Pre-approval versus Pre-qualification
Now that you know what you want in a home, you need to see what you can afford. Frank Smith Real Estate agents work with great lenders and can direct you in finding a perfect lender for your needs. Pre-qualification is simpler of the two processes. It can be done on-line or on the phone.
Usually you will be asked some basic information, what you earn, where you work, and basic information to give a rough idea of how much loan you will qualify for.
Pre-approval is more in-depth and the lender will pre-form an extensive look at your credit, how much debt you have to income. This is more reliable estimate and can be powerful when placing an offer.
Now we are ready to look. By now you are receiving MLS (Multiple Listing Service) emails with homes. Isn’t it great how you get the address, pictures and all the details? As great as these listings are on-line, it is important to drive by the homes. Don’t forget, people don’t just buy the house; they buy into the neighborhood and the location.
You may need to make another list: time to work, amenities close to hobbies, schools, highways and demographics of the area.
Make an offer
Okay, so it may be the first home you look at…be prepared for this. If it matches your list, is in your price range, be prepared.
Frank Smith Real Estate will help you determine the offer price by reviewing recent sales of homes in neighborhood; we can help you create an offer that will have the best chance to be accepted.
Usually this is bond with a $100.00 check made out to the listing agent’s office. Check is best form of payment as it is traceable for the bank.
Contract should include:
- Legal description of the home and purchasers legal names
- Offer price
- Down payment
- Financial arrangements: mortgage terms or cash terms
- Amount of deposit: Generally 5% of offer price
- Inspection rights and days allocated to have inspection
- Closing date
- Contingencies: things to happen in order to close (i.e. sell a home, appliances to be left, closing costs).
This form is a legal document, make sure to ask questions and be certain to address with us right away.
Once the offer is made you may need to negotiate with the Seller to reach a mutual agreement. It is important to remember, everything can be in negotiation when purchasing.
- Some things to negotiate could be:
- Appliances and or fixtures
- Occupancy time
Counter offers happen frequently and it is important to be in close contact with us to review changes. Most importantly, bargaining is a business process that takes compromise and mutual respect.
Purchase and Sales contract
Legal contract that connects the Buyer and Seller with agreed upon terms.
This is where you will be placing the deposit made out again to Sellers agent’s firm.
Service provider coordination
After the Purchase and Sales contract is signed, your Frank Smith Real Estate agent will coordinate the activities of service providers and act as your advocate. Things that can include but not limited to:
- Home Inspection: An inspection of the property, the foundation, and the surrounding environmental may be needed and should be inspected by a licensed insured home inspector. These inspections are important and can bring issues or inconsistencies to light; it may delay or even nullify the agreement.
- Appraisal: Your bank will organize an appraisal to make sure the property is selling for market value. They do not want to invest in a property that is overvalued.
- Home Insurance and Title Insurance: Insuring your new property is another step in the home buying process. Experts recommend you obtain title insurance to equal to the full replacement value of the home. This kind of insurance is purchased at closing and protects the buyers in the unlikely event that the title to the property comes invalid. Home insurance protects against theft, fire and liabilities. It can include personal items, other structures of sheds, furniture and jewelry. Flood insurance is generally only necessary for flood prone areas however not a bad idea to consider as we live in a coastal community.
Before you Close
As the closing date draws near it is important to be in contact with your agent, escrow attorney and utility companies.
- Escrow company: to determine exactly how much you will need to bring to closing
- Frank Smith Real Estate agent: to schedule final walk-through on property to make sure everything is as you stated in the Purchase and Sales agreement
- Utility company: you will need to transfer water, gas (oil), electric into your name.
Bear in mind, the best laid plans can and do have some snags. There are many times closings get delayed whether it is title issue, bank funding problem or repairs not being completed: these items are not uncommon.
Closing on the Home
Closing is where legal ownership is transferred from the Seller to the Buyer. It can be a formal meeting where all attend including real estate agents, Buyer, Seller and bank attorney or it can be done separately or through the mail depending on the parties involved.
Each party need to bring documentation verifying they are who they are. In addition, you most likely be bringing a check for the fees, verify the form of acceptable payment for closing costs.
Don’t forget to get your new keys, garage door openers, find out trash day and possible alarm codes.
Congratulations on your new home! Take a few minutes from the chaos and enjoy the wonderful feeling of owning your own home!
Please contact us at (508) 675-5557
We are local, we are friendly and knowledgeable!