How to buy a home – Step 11 – The Final Walk through

final walkthrough

Step 11 – The Final Walk through

Once all the inspections and approvals are in you will get a “Cleared to Close” announcement from your lender. At this point your agent will book your final walk through as close to the time of closing as possible. The purpose of the final walk through is to make sure the home has been fully cleaned out by the seller and nothing was taken that was supposed to remain. If there are any issues at the final walk through a solution must be found before proceeding to closing. If you do not get an agreement prior to closing, once the title is transferred the problem is now yours. You can negotiate a holdback if the issue will take time to rectify, or maybe the seller needs to go back and get something out. The seller may have forgotten they were supposed to leave you their washer and dryer and now they will need to credit you for their value at closing. Your agent will work with your attorney to clarify the issue and find a solution so you can close on the property as scheduled. Plan on a quick 15 minute walk through if there are no issues. The final walk though is not a time to take measurements for furniture or lay out color swatches. It is also not a house warming party. Your family will have time to view the home when you live in it for he next 10 years to a lifetime. The final walk through is simply to make sure the house is in the condition you expected it to be in when you take possession of it in the next one day to one hour.

Now its on to the CLOSING!

Looking for more information about buying a home, contact us today

How to buy a home – Step 10 – Title Search

Title search is the next step once all your contingencies are cleared.  Your attorney will handle this.

how-to-buy-a-home-step-10Throughout this process your agent would have recommended you hire an attorney. This is an important step as this attorney is going to represent your best interests and make sure they read all that fine print in the hundreds of pages of documentation you will be required to sign. They are also going to work along side a title company to research the properties history and make sure there is no issue with the title search. They will also order a tape survey;  The most inexpensive of surveys. If you are thinking you may put up a fence or add a shed or put in a swimming pool, you may want to request a more conclusive survey- such as a flag or stake survey. They are more costly but you will have to do it anyway so save yourself some money and get it done now.

All legal questions should be directed toward your real estate attorney. Your agent is not an attorney and they should not be answering legal questions. When choosing your attorney, again your agent probably knows the best in the business. They probably also have communicative relationships with certain attorneys so ask your trusty agent for a few referrals. If you do decide to choose your own, avoid family attorneys and litigation attorneys. Though they may be a friend and have the legal capacity to represent you their specialties lay elsewhere. Having an attorney who specializes in real estate is key for keeping your deposits safe and keeping you on track for closing dates.

Once contingencies are cleared, loan is approved, and title search is complete, and closing is scheduled, we will do the final walkthrough

How to Buy a Home – Step 6

In Steps 4 & 5 of how to buy a home we discussed searching for homes and finding the right one.  In today’s post, we are going to talk about Making an Offer

how-to-buy-a-home-step-6Once you make the offer there will be several pieces of documentation you must sign and submit. Do not drag your feet as the offer can not be submitted without the whole package. The offer package includes: Your contract to purchase, the Massachusetts mandatory licensee disclosure form, your pre-approval or proof of funds and a check for your escrow deposit. Your escrow deposit is the first of two deposits you must put down to secure the home for purchase. The higher this deposit the stronger the offer. Typically minimum offer deposit is $1000 but it can be much higher depending on the value of the home and the strength of the offer. Even if you are using USDA or VA with 0% down payment you still need the deposits to secure the home.

You can not buy a home if you do not have at least funds for deposits, inspections, appraisal and closing costs, nor should you. You should always have a buffer in a savings account if you are to become a homeowner. You will no longer have the luxury of calling a landlord if the water heater dies or the roof springs a leak. You will need to pay to fix these items. If you have financed using 0% down it is even more important to have an emergency fund as there will be no equity to draw from if the home needs work.

Back to the deposit check for the offer- this check is typically made out to the listing brokerage. This brokerage will hold the funds in escrow. Escrow is an account that will be drawn from at closing to cover your costs, down payment and proceeds to the seller or commissions to agents. The homeowners do not have access to this account. Your escrow deposit can be refundable based on contingencies. We will discuss these contingencies  at steps #8 & #9

Once your offer package is submitted it is typical to give the listing agent 24 hrs to present the offer to the sellers. In a hot market it is not uncommon to shorten this time frame. But do keep it realistic. If you are not submitting an offer until 8pm do not have the offer expire at 8 am. The listing agent needs at least 8-12 business hours to get in touch with their client. If submitting the offer at 8 am I have written offer expirations by 5pm.  Especially if the offer is full price or above list.

What happens after an offer is presented?  Negotiations, multiple offers, escalation clauses and waivers

How to buy a home – Step 4

In Step 3 of how to buy a home we discussed getting your finances in order.  In today’s post, we are going to talk about the fun part – Searching for homes

searching for homesStep 4.  Begin your search – online, open houses and showings

This is where you fun begins.  Your agent will set you up with an online account. Try to stick to the account your agent recommends. Some buyers jump around to third party sites such as Zillow and Trulia. These sites tend to host inaccurate information that can be misleading to buyers. Zillow advertises “pre-foreclosures” – these properties are generally not for sale. These listings mean the home owner has missed some payments on the mortgage and somehow Zillow can track this through public records. They change the staus from off-market to pre-foreclosure. Your agent will be able to give you access to the MLS feed either directly through the MLS they use or their own website. When a home goes under contract or comes on the market you will get notified immediately. Third party sites can take as long as 3 days to refresh data. A home can be sold in that amount of time.

Once online and getting daily emails from your agent you will begin to notice a trend in the homes you are receiving. Pay attention to the trend. If most houses in your price point are 1500 sq ft and you see a home listed in the same price point with 3000 sq ft- you know there has got to be a catch. Is it distressed, a short sale, foreclosure, failed septic? Check in with your agent to find out why this properties pricing is so far off from all the others.

Start visiting open houses. Don’t forget your agents card, or at least be sure to sign in with your agents information. Agents get paid for representation based on procuring cause. Procuring cause is the how a buyer came to find a property. If you want your agent to have the ability to represent your best interests if you decide to write an offer, you better give their name to the agent hosting the open house or procuring cause can go to the agent hosting the open  house and that agent does not have your best interest in mind as they represent the seller.

The best way to truly explore a home is at the private showing with your agent. In most cases you will get exclusive access to the home with just your agent. This allows you and your agent to explore the home and discuss the benefits and drawbacks of each home you view. If you want to take a second look, you can go back through the house. Most showings are scheduled for a half an hour. If you have high interest in the home and take a little longer the sellers don’t usually mind. But if you have no interest, move through the showing and leave on time; Try not to stay behind and discuss other homes inside the house you do not like.

Before all showings make sure you do a drive by on all properties you want to view. Do you like the neighborhood? How is the property’s curb appeal? What about the neighbors or view from the home? You can get a good feeling if you would like to live there by simply driving by. This is important because if you don’t like the neighborhood or what the home looks like, you can save yourself, the seller, and your agent a lot of time by not scheduling the showing.  If you do not have time to drive by, pay courtesy to the agent and seller by at least viewing the homes interior while there for the appointment. The agent took time out to bring you there; the seller probably cleaned up and made the house show ready for your arrival. There is nothing more distressing than getting to a home a buyer requested to see and having the buyer say they do not even want to enter. Use this home as a comparison to other homes you will look at. It never hurts to look, especially if you are already there.

In a showing of a house you are considering for an offer be sure to notice the condition of things such as the roof, systems, and other visible items. You should not attempt to renegotiate on items that were clearly visible at you showing after home inspection. You agent should be able to point out items that would decrease the value or bring up cause for concern in an appraisal.

Step 5 – You have decided on a match

Once you think you have found a match, your agent will then go over the pros and cons of that house. They should be pointing out the items you said you wanted and comparing this to properties of similar value. You agent will then run a market analysis on the home to determine its value. In a rising market it is important to make sure that the home will appraise at the offer price. In multiple offers many buyers are offering over appraisal value making it difficult to finance. If your agent believes this home is good match they will tell you one way or the other.

In the next step we will discuss Making an Offer

Here is an example of what your home search could look like

How to buy a home – The Process

How to buy a home

home buying stepsBuying a new home can be an exciting thing but its not as easy as it is portrayed on HGTV.  We are a full service real estate team working with buyers and sellers and we take the time to meet and have a consultation with each client so they fully understand the home buying steps.  In this series we will outline the steps to buying home to help you better understand how this works.  Contact us today to schedule a private one on one consultation.

Step 1. Find a professional real estate agent

After you have decided you want to start the process, the first thing you should do is find a professional Real Estate Agent you can Trust (preferably a REALTOR® rather than just a Real Estate Agent) (Preferably US – The Pros Real estate team)

Why is this so important? – see following 12 steps in this series.   Every real estate transaction is a unique and beautiful thing to a real estate agent. To a buyer, especially a first time buyer, it can be a stressful, overwhelming experience that just might make you run for a rental. With the right guidance your home purchase can go smooth and you can feel assured that you and your money is protected. You will feel as though you can make an educated decision based on a non-bias parties opinion of your needs vs the condition, location and valuation instead of emotion.

Most Buyers these days get to choose who they want to represent them. This means there is a sole agent looking out for your best interests. Agency describes the direction in which loyalty is given. A listing agent represents the best interest of the seller.  If you go unrepresented directly to the listing agent, keep in mind that agent is being paid by the seller to get them the highest price possible for that home and to protect the interests of their client. Some buyers think that if they go directly to a listing agent they can buy the house for a better price. This is not always true. The listing agent typically signs a contract that pays the agent a full commission they would otherwise split with a buyer agent. If there is no buyer agent, the listing agent is still paid the full commission. Going directly to the list agent does not save the seller any money on the net sales price. Yet you have no representation so you are now negotiating the sales price on your own behalf against an agent who negotiates for a living.

It cost nothing to consult with a buyer agent. Meet with one and see how you feel about this agent. Will you get along? Do you trust them to do a great job? What is their sales history? Do they have enough time to get you into property on your schedule? Are they full time agents or do they do this in their spare time?  Are they educating you on the process or trying to sell you a product? Look for someone who is a consultant and adviser- someone who will guide you. It’s great to have an agent with a sales background too, as they will be negotiating on your behalf. You just may want to avoid having to negotiate with them. You don’t want someone so aggressive they don’t give you time to compare homes and make an educated decision but you also don’t want someone so laid back your shopping for a home for years. You are hiring this person – so interview them. Once you feel confident, sign the contract.

Continue to Step 2.  Analyze your needs

Check out these great first time home buyer homes in Worcester County!

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