The Buying Process

Buying a home is, or should be, an exciting process…but it can also be stressful in many ways.  Your home purchase is frequently the most expensive purchase you will ever make, and it’s a decision you will live with for a long time.  You want to be as certain as possible that the home you select will meet the needs of your family, both now and in the future.  You also want to be as certain as possible that you are making a good investment.  So, where do you start??

SELECT A REALTOR TO HELP – CALL PREMIER PROPERTIES!
Realtors are professionals trained in the entire process of the real estate search and purchase, whether it’s for a primary residence, second home, farm, multi-family or commercial property.  They have many resources at their disposal to assist in the home buying process, most of which are not available to the general public.  You want to select a Broker who has experience in the type and level ($) of property you’re interested in purchasing.  Do your research – check with friends or family who have recently purchased for their recommendations, ask loan officers for recommendations, check reviews on real estate websites, check for length of time & success in the business.  If you call a real estate firm or a particular agent, ask questions about how that company or agent works to make your search a success.  The agents at Premier Properties Real Estate have a broad range of experience and in-depth knowledge of the intricacies involved in a successful home purchase in a challenging market.  They are available to guide you through the entire process.  They are knowledgeable about other professionals needed during the home buying process:  loan officers, inspectors, contractors, etc., and can give you recommendations.

DETERMINE YOUR PRICE RANGE
Contact several loan officers (there are banks, mortgage companies and credit unions that provide mortgage loans) to discuss your financial situation.  If requested, your Realtor can give you a list of competent local lenders who can fill your needs.  These are professionals who can advise you on the types of loans you qualify for, what each of those loans require, and how much you’re qualified to borrow.  If you are already a homeowner, they can tell you whether you’ll have to sell your current home before purchasing another one, or if you’re qualified to buy without selling.  This is a critical first step, since you don’t want to start shopping for homes, find one you love, and then find out you don’t qualify for the loan required to buy it.  The loan officer you select can provide you with a pre-qualification letter, which is important to have when you’re submitting an offer.  In a very active and competitive market like we are experiencing today, some loan officers will proceed with a formal loan application where your financials are examined and fully approved by the lender.  Then all that’s involved is the lender’s approval of the property you select (through the appraisal process).  That speeds up the purchase process significantly, and makes you more competitive as a Buyer, since you have an actual pre-approval letter rather than just a pre-qualification.

DEFINE YOUR NEEDS AND WANTS
Before shopping for a home, make a list of the features you NEED to have (such as number of bedrooms and baths, basement, garage, location [school district, etc.], size of house, size of lot, etc.).  Make an additional list of other things you WANT to have…. You may only need 1 full bath, but you’d prefer to have 2 or more.  You’d love to have a swimming pool, but you can survive without it.  This includes price.  You may have been pre-qualified or pre-approved for a specific amount, but you may not want to spend that much.  You get the idea.

If there is only one person purchasing a home, then all you have to do now is prioritize your list and you’ll have a clear picture of what you’re looking for.

If there are two or more decision makers involved, then this gets a bit more complicated.  Of course, everyone has different needs, wants and priorities.  To come up with an accurate assessment of your joint list (one that everyone can live with happily), have each person prioritize the entire list privately.  Come back together and add each priority number given to each feature by each person, then divide the result by the number of participants.  The result will give you a pretty accurate combined list…with the likelihood of some lively discussion in the process.  Doing this exercise helps you discuss personal needs & wants with others involved, and helps them do the same.

This list then becomes a great guideline for your Realtor, as they help you search for “the perfect property”.

DETERMINE YOUR TIMING
Do you have a specific deadline you’re under to move?  This will determine how quickly you need to proceed with the search, and what kind of timelines need to be included in your offer.

CALL OUR OFFICE TO BEGIN THE SEARCH PROCESS
The professional Brokers at Premier Properties can help guide you through the search and purchase process, as well as assist in the multiple things that happen between writing an offer and getting to the closing table.

• The MLS System has a prospecting system, which allows your Realtor to enter your requirements (Remember that list??) into the system. Whenever a new listing matches your requirements, it will be automatically emailed to you.  That allows you to be one of the first to know about a new listing that might work for you.
• Your Realtor can check the Hot Sheet multiple times daily, to be sure you don’t miss something.
• Representation is important! Using a Realtor is critical in the purchase process, as this is a complex transaction with many details.  You want to have a knowledgeable professional guiding your contract negotiation, to be sure your interests are protected and to explain the details of the process (what’s standard, and what’s not, etc.).

WRITING THE OFFER

You’ve found the home you want, so now what??  Your Realtor will provide you with guidance writing the offer, explaining all the details of the purchase contract.  Premier Properties uses the forms and contracts that have been generated by the Indiana Association of Realtors, to be sure that we have the most accurate and up to date forms.  You’ll discuss price, terms and timing.  In a very competitive Seller’s market, you may have to make decisions very quickly if you’ve found a home you want, since multiple offer situations are occurring very frequently.  Some of the terms you’ll need to consider:

• Price – not only what you’re going to offer, but how much are you willing to pay if there are other offers as well. A form called an Escalation Clause is frequently used in this situation.
• Earnest money – This is a good faith deposit that shows the Seller how serious you are.
• Type of loan and terms: Are you asking the Seller to pay closing costs for you (this may be required depending upon your financial situation)?  Is the offer contingent upon another sale or another closing?
• Timing of closing – this is somewhat determined by your type of loan
• Timing of possession – what do you need vs. what is standard in the area
• Inspections – Are you going to do inspections? If so, what is the timing?
• Insurance
• Home Warranty – Is the Seller offering a home warranty? If not, are you asking them to, or are you going to purchase one for yourself?
• How are taxes to be handled?
• Other requirements/terms? (Proration of POA or Condo Fees)

ACCEPTED OFFER!
Congratulations, your offer was accepted!

• Provide your Realtor with your earnest money check asap.
• Your Realtor will provide you with a fully executed copy of your accepted offer. Either you or they will need to get this to your loan officer right away, along with a copy of the earnest money check.
• Get a list of Inspectors from your Realtor, and call asap to schedule your home inspections. There is always a time limit on when these need to be done after acceptance, so you’ll need to pay attention to these deadlines (again, your Realtor will help keep you on track).
• Attend the Inspection and respond in writing if there are any issues. This can become another negotiation.
• Apply for your Homeowners Insurance.
• Check with your Loan Officer for any documents needed, if you haven’t received a full pre-approval.
• Review closing documents when provided by your lender. Your Realtor will help you with this step as the forms can be quite intimidating.
• Wire funds to the title company for closing. Be sure you get the wiring instructions directly from the title company, and that you KNOW who you’re talking to!  In Indiana, the state requires that any funds for a single real estate transaction of $10,000 or more MUST be wired.  If you need to bring less than $10,000 to closing, you can usually bring a bank check made payable to yourself, which you’ll endorse over to the title company at the closing.  Verify this with either the title company or with your Realtor.

CLOSING DAY!
Your closing will be held either at the Lender’s office, the title company, or your Realtor’s office.  Your Realtor will be at the closing with you to help you with any questions you might have.  Be sure to have a photo ID with you.  Be sure to have wired your funds to the title company ahead of time (unless you need to bring less than $10,000, in which case you can bring a Cashier’s check).

The closing generally takes about an hour, during which you’ll sign quite a few documents.  Frequently, Buyers and Sellers will exchange contact information at the closing, so they can make arrangements for possession.  If possession has been defined in the contract as “at closing”, keys are exchanged at the closing table.  If possession is later (most common locally is possession 30 days after closing), then other arrangements will need to be discussed for the exchange of keys.

CELEBRATE!
CONGRATULATIONS, YOU’RE THE OWNER OF A NEW HOME!!!