The home purchasing process can seem like a very daunting task. My job as your buyer’s agent is to make this as smooth a process as possible. How do we get from here to there?
There are a number of steps in the journey:
1. Find an agent. A good agent will be able to answer your questions or give you quality referrals to sources that can (some questions we can’t answer for liability purposes, etc., but we should always have someone who can on speed dial). Also, consider the agent will likely ask you to sign a buyer’s agency agreement. As an agent, this protects our time. It also protects your financial interests and time, too, through formalizing a contractual relationship with your agent.
2. Prequalify/preapproval. Most sellers will require a pre qualification from a lender. Your agent will also ask if you are pre qualified and ask you to contact a lender if you aren’t. This protects all parties time, too. It is not uncommon for people to want to window shop homes; this isn’t a bad thing, but please disclose up front to the agent if this is the case.
3. Search for homes. This is the fun part…house shopping! Sites like Zillow and Trulia are not bad sites; however, know the values listed on these sites are not necessarily accurate and can be off by 20% in either direction. Also, the data on the sites is days out of date, at best. Your agent has access, through the MLS, to the most up to date information…a critical advantage in hot markets.
4. Make an offer/under contract. This can involve several iterations of back and forth negotiations but the short of it is you make an offer through your agent, the seller’s agent presents it to their client…and the negotiations (or acceptance) start.
5. Home inspection. After contract acceptance, several things happen concurrently. One of these items is the home inspection. Averaging $300 (this is a buyer’s cost), a certified home inspector will come visit the property and provide a detailed report of any issues he/she finds. They will likely categorize these findings as major, minor, safety, etc.
5A. Inspection objection. Through your agent, you will have a chance to object to any unsatisfactory findings in the home inspection. Typically, you’ll want to object to any “health, hazard or safety” items. There are a number of strategies involved in this part of the negotiations – some of which include asking for repairs, asking for seller’s concessions, asking for a lower purchase price, etc. Also, bear in mind the seller does not have to fix anything (but you don’t have to buy the house), so there is some give and take here.
5B. Inspection resolution. This is the seller’s official response to your objection. This document states what they are willing to do in response to your objection. If all parties are able to come to a successful resolution, the contract continues.
6. Home appraisal. Your lender will order an appraisal of the home. Depending on the lender, this may cost you app. $400 upfront, or it may be rolled into the home loan. If your home appraises at or above your offered price, there is no issue. If the appraisal comes in low, there are some issues that must be addressed. Can the appraisal be challenged? If not, will you as the buyer make up the difference between appraised value? Or, will the seller lower the purchase price of the home (preferred from the buyer side!).
7. Additional deadlines. In Colorado (the only state I can specifically speak to), there are several additional deadlines and buyer protections. As time permits, I will detail these here. In the short term, these include (not all inclusive) the Title Resolution deadline, Association Documents deadline, Off-Record Title deadline, Loan Application deadline, Survey deadline and Property Insurance deadline.
8. Loan processed and underwritten. As the above steps unfold, your lender will be asking for a list of documents they need to make your loan happen. Once they have your documents, your loan will go to processing and underwriting. When it clears these steps, they will give you and your agent the “clear to close.”
9. Closing! Welcome to your new home. 🙂
This roadmap, courtesy of Veterans United, gives some additional information! Questions, please don’t hesitate to call Rob Thompson at 719-440-6626 or email me at firstname.lastname@example.org.
DISCLAIMER: Always consult a licensed or certified expert in the associated field you are looking for (real estate, taxes, law). The above information is general in nature and is not all inclusive.