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Taking Your Through The Buying Process | |
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Congratulations! You have taken the fist big step if you are visiting my website because you have made a decision to purchase a home. I share your excitement in familiar ways because I too have been through the home buying process as a first time home buyer and beyond. It's exciting for me when I have the privilege of representing a buyer in the home purchase process and to be there for that first moment of celebrating ownership!. My goal is to make your home buying experience an easy and rewarding one, and in doing so I will be there with you and for you all the way through close. Please take a few moments to read my steps of "Taking You Through The Home Buying Process". It is somewhat detailed but then so is the home buying process, and I want to be sure you have confidence in my services and an understanding of how I will work in your best interest as your Realtor. After all, you deserve to know what you can expect from your Realtor BEFORE you embark on such an important journey. . So with that said...............
"Taking You Through The Home Buying Process" Every buyer that I work with has unique needs and wants. Some are buying for the very first time and will need advise and guidance every step of the way. Then there are seasoned buyers who have made prior home purchases but need the expertise, advise and negotiating skills I can offer them. I have worked with many types of buyers and believe the foundation for a successful Realtor/Client working relationship is based on trust and dedication between us. So How Do We Begin? When possible, I like to meet clients in person early on. However, our first few contacts might be talking on the phone or communicating by email. This is perfectly fine and will get us off to a good start by discussing your needs, price range, areas of interest, and time frame for buying. I consider our initial contacts an interview where you will and I will decide if we are a good match for meeting your goals. I'm Hired So now that you and I have made a decision to establish a working relationship, we will want to make it legal. Texas law requires that buyer representation begins only when a buyer and agent enter into a written representation agreement. This clearly allows me to have your best interests first. I'll also be providing you with a buyers packet of sample contract forms that we will also review at that time. How I Get Paid Contrary to what many believe, Realtors do not NOT receive a salary, company car, an expense account, vacation pay, insurance and retirement benefits, etc. In addition to these expenses, I also pay license fees, monthly Multiple Listing Service Fees and annual membership dues in local, state and national Realtor Associations. So here is how I get paid. At the time of closing, after all of the work has been completed to the satisfaction of everyone concerned, the real estate commission fee is subtracted from the Seller's Proceeds. This commission is then divided between the company and the Realtor representing the Seller, and my company and me. The Buyers Representation Agreement you and I enter into will define this source of my payment. Isn't that great! You get my professional services at no cost to you! Home Shopping Time! By now, you and I have a pretty good idea of your wants and needs in a home and we will compile a list of pre-selected homes for me to show you. Finding the right home might not happen on the first shopping trip out. In fact, it may take a little time and several shopping days before you find the perfect home. I'm prepared for this, and being available to show you homes is important so I will make every effort to accommodate your schedule. I realize your time is valuable so I provide a way for you to preview homes online before we even get in the car. This is also great for my out-of-town buyers. It works like this.... I will enter all your criteria into my "Client Match" database to generate a list of homes that match your price range, areas, size of home, etc. I will email the end results to you in a user friendly format with details of the homes including multiple pictures and virtual tours for you to review in the comfort of your own home. You then decide what homes you want to physically look at and I will coordinate to show you those home personally. My "Client Match" will automatically notify you and me when new homes come on the market in MLS that match your criteria so we NEVER miss a new home on market opportunity. You Found A Home! What Next? First, I will contact your lender and ask he/she to prepare a good faith estimate with the price that you intend to offer for the property. The good faith estimate will show you all your costs for the sale and will advise you as to what your closing costs and pre-paids will be if that is a condition that needs to be negotiated in your offer. I will notify the seller's agent that we are submitting an offer. You and I will review any disclosures and important information the seller might have about the home including what conveys. I will then prepare a market analysis from MLS data of recently sold comparable neighborhood homes so that we can justify your offering price. Writing The Contract Offer Once we´ve determined a purchase price and how much we will need for closing costs and pre-paids, we´ll sit down and work up an offer, otherwise known as a contract. This should take us approximately one hour. We will go through the offer line by line to be sure it states your terms exactly, how much you want to offer, how much you may be asking them to pay for closing costs, items you would like to remain with the property, and possession date just to list a few. If necessary, I can email, FedEx or fax contract documents if you or a party to the purchase cannot attend the contract signing in person. If there are competing offers on the home when we are preparing to submit your offer, we would enter into a 'multiple offer situation'. In this happens, it is important to make your best offer because the other offers could be more appealing to the seller and, like most multiple offer situations, you won't have the opportunity to make your offer better later. You and I will have no way of knowing what the other offers are. We will discuss our options and strategy in more detail if we should cross this bridge. Option Period and Option Fee In Texas we use what is called the option period. The option period is a period of time in which the buyer can back out of the agreement for any reason. The buyer pays the seller for this option ($100 is fairly typical). The length of the option period is negotiated between the buyer and seller, but is rarely more than 10 days. The option period begins when the contract is signed off on by all parties. The home is put under contract as pending/backup during your option period. As soon as possible during the option period, you will want to have your home inspection done, repairs negotiated and address any questions or concerns about the property. If you terminate the contract for any reason during the option period, you receive your earnest money back from the title company and the seller keeps the option fee. Once the option period passes you are bound to the contract terms to close and your option fee will be credited back to you at close. You are not required to purchase this option but most buyers do because they want the ability to terminate the contract if issues concerning the home cannot be resolved. The seller does not have the same unrestricted right to terminate and must abide by the terms of the contract. In the Contract: Earnest Money Before any document or agreement can become a legal and binding contract, for both sides, there has to be consideration. Something must be offered as evidence and proof that an agreement is more than just a person´s word to buy. Earnest money is that consideration. As a general rule, earnest money is between 1% and 3% of the sales price. You place earnest money at the time we write the offer. The check is payable to the title company where we will close. I take this check when I present your offer but keep it in my possession until final acceptance of the contract. What Happens To The Earnest Money? Once the offer has been accepted and all parties have signed off on the contract, I will deliver the earnest money check and fully executed contract to the title company where we will close. The seller will receive your option fee at this same time. The earnest money is placed in an escrow account with the title company and on close day your earnest money will be applied to your down payment or close costs. If your offer was declined by the sellers, I return the uncashed checks to you. In The Contract: 1 Year Home Service Plan When we prepare your contract offer, you will decide if you want to ask the seller to provide a 1 year home service plan at the sellers expense (average cost is $350-$400 the seller pays at closing). It is a great benefit for you to have this plan because during the first year of your home ownership, it helps protect against the cost of unexpected covered repairs or replacement of the home's major systems and appliances that break down due to normal wear and tear. Each time a service technician comes to your home to repair or replace an appliance or system an economical service fee of $45 is due regardless of the actual expense. The service plan can be renewed by you after the first year at a renew cost to you. Presenting Your Offer Depending on what has been prearranged between me and the seller's agent, I will be presenting your offer by fax or in person to the seller's agent including a copy of your earnest money check and your lenders prequalifying letter. Presenting the offer is brief but allows me the opportunity to go over the major details of your offer and terms. As a general rule, buyer's agents do not communicate the offer directly to the seller. The seller's agent will want to meet with the seller privately to review your contract offer and terms then decide how they want to respond back. The seller has three options when they respond. 1. Accept your offer and the terms you of your contract. 2. Reject the offer. 3. Make a counteroffer to your offer. Don't be surprised if the seller does not meet you eye-to-eye on all your terms. What Is A Counter Offer A counter offer is really a new offer. Even though buyer and seller might agree to some or even most of the terms of a purchase/sale offer, any change effectively creates a counter offer. You may have to go through a number of counter offers before an agreement is reached. Sensing what to ask - and when to back off - are both part of the bargaining process. Most counter offers correspond to these provisions: Acceptance Of Offer Once the seller has signed the offer, it is considered "in contract/pending" and the "Option Period" begins.. I open escrow with the Title Company and alert your mortgage broker that it's time to begin the financing process. If you have not already done so, you will need to provide your lender with bank account statements, latest pay check stubs, and any other information he asks for as a condition to obtain final loan approval before close of property can take place. The Home Inspection A home inspection is a very important part of your home purchase. The inspection will cost you about $250-$300 depending on the size of the home, and you will pay the inspector AT THE TIME OF INSPECTION. You will want make every effort to have it done within 24-48 hours of the effective contract date. Remember, your clock is ticking away on your "Option Period". I will be present during the inspection and highly recommend that you attend so that you can see first hand the workings of the home. It also represents an excellent opportunity for you to ask questions. Your inspector will do a visual examination of the physical structure and systems of the home. If problems or symptoms are found, the inspector will write them in the inspection report he will provide to you and may recommend further evaluation. No house is going to be perfect. If the inspector identifies problems, it does not necessarily mean you should not buy the house, only that you will know in advance what to expect. Negotiating Repairs It is up to you to decide how any problems the inspection uncovers might affect your decision to purchase. Buyers usually submit a list of repairs for the seller to take care of. Essentially, this becomes phase two of contract negotiations. The seller may agree to do all, some or none of the repairs you are asking for. If repairs terms cannot be mutually agreed to, you can terminate the contract and receive your earnest money back provided you are still in your "Option Period.". Home Owners Insurance It is important to contact an insurance professional early in the buying process. 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. 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. Appraisal Your lender will ordering an appraisal on the property prior to close to determine if the loan amount you are requesting will be adequately secured by the property value. This value assessment is based upon a market analysis of the prices of recent sales of similar properties in the area and the property´s physical condition. Usually, this requires an interior and exterior property inspection. Typically, this is a buyer fee to the lender costing an average $350 to $450. Title Insurance Title insurance is an insurance policy that guarantees the property title is free from the problems of hidden liens and claims when ownership passes to you. Public records for the property are searched to find problems in the title's ownership and history that might include liens for unpaid taxes, liens by contractors, undisclosed heirs, forgery. The purpose of the search is to verify the seller's right to transfer ownership, and to discover any claims, defects and other rights or burdens on the property. The fee for title insurance is a one time fee usually paid by the seller at close. Preparing To Close |
