Home Buying Process

Know the difference between pre-approval and pre-qualification.

Pre-approval is:  

• an evaluation by a lender that determines if you would qualify for a loan. It also shows how much the lender would be willing to lend you
• gettingpre-approved is the first step towards getting a mortgage, but it does not guarantee a loan
• a tool to help you identify and resolve any issues you may encounter in your application
• based upon a preliminary credit score

Pre-qualification is:

• a process whereby a loan officer takes information from you, a borrower, and makes a tentative assessment of how much the lending institution is willing to lend you
• not a full mortgage approval, but a basic estimate of what you can afford in a home loan
• a more comprehensive analysis and commitment of a loan

Understanding Mortgages

What to expect of a mortgage:

• the loan needed to make up the difference between the down payment and the purchase price of the home
• there are a variety of mortgage programs available, with adjustable time periods and financing options
• loan application processes and timelines vary
• the actual time depends on how promptly the lender can:
  • get an appraisal of the property
  • a credit report
  • verification of employment and bank accounts

View Homes

Our Web site is a one-stop resource for finding your ideal home, featuring unlimited search capabilities and complete property profiles on thousands of homes. If it’s on the market, it’s on our Web site.

After finding a realtor, it’s a good idea to explain your goals and coordinate a plan with him or her. Touring homes with your agent and visiting open houses in the neighborhoods you are interested in is one way to familiarize yourself with the market and develop a relationship with your realtor.

Make an Offer

Once you find a home that fits your needs, your realtor will draw up a Contract of Sale, or Purchase and Sale Agreement. This document defines the proposed purchase price, the terms, and the timing of the close on behalf of the buyer. The contract also serves as direction to the escrow company to close the transaction. With the help of your realtor, you and the seller can then negotiate and come to terms on a mutually acceptable contract. Of course, the seller is free to accept or reject any offer, or to propose a counteroffer revising the original terms.

In addition to the price you are willing to pay, the formal offer will consist of specific deadlines, including an offer expiration date, a closing date, and possession date. When securing your offer, you must also outline the earnest money deposit amount, which you place in an escrow account or client trust account as a good faith intention to complete the transaction. Your offer is based on contingencies related to financing and inspections. If you have a house to sell, your offer may also be contingent on its sale. Help me Sell My House.

Negotiating

During the home buying process, your realtor can provide you with valuable negotiating expertise. He or she can offer you valuable market information by assessing current competition and past sales of similar homes. By preparing a Competitive Market Analysis, your realtor can help you formulate an offer for your desired property. Your agent will also provide you with assistance in evaluating any counteroffers and contingencies that may arise in the process.

Contract Preparation – Crossing the T’s, Dotting the I’s

The Contract of Sale, or Purchase and Sale Agreement, is a legally binding document whereby the homeowner and buyer agree to terms under which the buyer will acquire the seller’s property.

Who is paying the various expenses of the sale, including closing costs?

Both buyers and sellers incur expenses during the transaction process. Buyers are typically responsible for costs associated with the down payment placed on their new home, any home inspections, a portion of the escrow fees, the portion of the title insurance policy that benefits the lender, and any loan costs. Sellers generally pay for a portion of the escrow fee as well as a standard title insurance policy. The responsibility of the annual expenses of property taxes and homeowner association fees is typically shared between buyers and sellers and prorated based on the closing date.

What is the actual closing date?

The closing date of a real estate transaction is the date in which proceeds from the sale are available to the seller and the transfer of the title has been recorded by the county. The lender is responsible for providing the buyer with a good faith estimate, which will provide a close approximation of the buyer’s financial requirement to close the transaction.

What is the date of occupancy?

The date of occupancy is agreed to between the buyer and seller during the negotiation process. If the seller remains in possession after closing, there should be a rent back agreement in place prior to closing.

Home Warranty – Why You Should Offer a Warranty

To decrease the chances that you’ll have to pay for repairs on a home after you buy it, invest in a home warranty. The Premier Properties Home Protection Plan will cover many of the costs of repairs or replacement systems to your new home. From water heaters to septic systems, to central air and heating, the Home Protection Plan protects against the normal wear and tear of your new home’s covered major mechanical systems and built-in appliances for a specified period of time after the close of the sale.

To lessen the stress of buying a home, and for peace of mind that comes with a home warranty, it makes perfect sense to call your Premier Properties agent today for more details.Click here to contact us about Premier Properties’ Home Protection Plan coverage.

The Importance of Home Inspections

It’s common for buyers to make an offer contingent upon one or more home inspections, which the buyer arranges and pays for with the seller’s consent. If the inspection findings are acceptable to you, the closing process can begin. If the inspection uncovers problems, your agent can provide valuable suggestions on how you might work with the seller toward a mutually acceptable resolution.

A home inspection should be conducted by a qualified professional. We recommend that buyers be present when an inspection is performed so that the inspector can describe the process and findings to you personally.

The Inspector Should:

• Look for any structural, mechanical, and/or other defects in the property.
• Examine all systems, including heating, air conditioning, electrical wiring, and plumbing.
• Spend time checking the exterior of the house, including the roof, foundation, and chimney.
• Check the attic and interior for proper venting, insulation, and electrical outlets.
• Test all appliances and plumbing fixtures to verify working condition.
• Check all bathrooms to see if moisture has affected the areas around the tub or shower.
• Inspect for other items such as insects, termites, and other pests.

Appraisal – The Value of Your New Home

An appraisal is a professional evaluation of a property’s monetary value, usually completed at the request of the lender and for the lender’s benefit. Appraisers consider numerous factors such as square footage, construction quality, design, floor plan, amenities, energy efficiency, lot size, topography, view, and landscaping. Other issues appraisers take into account are neighborhood quality and a property’s proximity to transportation, shopping, and schools.

Homeowners’ Insurance – Protect Your Investment

Once you have found a home to purchase, you’ll want to protect your investment with insurance. Most buyers invest in a comprehensive homeowner’s insurance policy, which provides coverage for fire damage, water damage, personal possessions, personal liability, vandalism, theft, and loss of use of the house. If you are financing your home purchase, your lender will require you to buy at least basic hazard insurance, which will fund the cost of rebuilding your home. It is important to contact your insurance professional early in the buying process. They will be able to advise you of their ability to provide coverage as well as to quote the rates and terms of the policy.

Title and Escrow

The final stage of the transaction process occurs with the transfer of title from seller to buyer. After closing has occurred, the policy is sent to you by your title and escrow professional, the third party who transfers the money and documents (including title and deed) from the buying and selling parties. The escrow company prepares documents, draws up the closing statements, obtains necessary signatures, records documents, and receives and disburses funds.

Closing the Deal

At the closing appointment, you will review and sign final paperwork, and bring the balance of the funds required for the down payment. If either seller or buyer cannot attend, he or she can sign papers in advance, and/or grant power of attorney to a representative. The buyer will be asked at closing to sign the mortgage and any other papers that the lender, and/or other interested parties, may require. Upon conclusion of the closing process, the deed and mortgage will be recorded and all previous obligations of the seller will be discharged. Once the closing papers have been executed and the deed recorded, you can take legal ownership of your new home.

Get Your Keys

Once you’ve been handed the keys to your new home on the agreed possession date, it’s helpful to keep in mind that some practical and cosmetic matters need attention. Before you take possession of your new home, utilities will need to be changed to your name. And services such as electricity and phone may need to be reactivated. Also, check in with the nearest post office to assure proper mail forwarding. Consider hiring a cleaning service to thoroughly clean the home before you move in. And for security purposes, it may be prudent to change the locks and install a theft deterrent system.

Once you have the keys, we’re your link to everything needed to make your house a home.