The Process, Step-by-Step
Make An Offer
There are many ways that The Sam Joseph team buying agent can have what is just words on a page actually convey how much you really want this house to be your home in the legal document they will prepare to send to the seller.
You need to approach this process with a cool head and a realistic perspective of your market. The three basic components of an offer are price, terms, and contingencies
The right price to offer must fairly reflect the true market value of the home you want to buy. The Sam Joseph Team buying agent will do market research regarding what is currently on the market and what has closed recently, and assist you with deciding on the correct amount to offer.
In this highly competitive market, the notation of getting a ‘bargain’ is no longer viable. Most of the homes that are in good condition receive multiple offers and there are bidding wars. So take their advise seriously regarding a fair and equitable offer.
The other financial and timing factors that will be included in the offer are:
- Money Deposits
Obviously, the higher the amount you can afford to put down, the stronger your offer will be viewed by the seller. This makes a statement to the seller about how serious you are and also protects the sellers from the possibility of your unexpectedly pulling out of the deal.
How soon can you close? Are you flexible? The more flexibility, the better. The seller may have stipulated they want a ‘quick’ close or perhaps they want to stay in the home as long as possible. You need to adjust to what the seller has in mind.
There are other terms that the Sam Joseph Team buying agent will advise you about putting into the offer, such as waiving certain home inspection issues, etc. They know this market and know what sellers expect to see in an offer, so they will advise you which is the best approach for you.
Your offer has been accepted!!! Congratulations! Now it’s time to choose an attorney. If you are not familiar with attorneys who specialize in real estate, we can always recommend them.
After the contract is fully executed and a copy is provided to the buyer and seller, the attorney review period commences. You typically have three days from receipt of the fully executed contract to have an attorney review the contract and disapprove of it. At this stage, either party can disapprove of the contract and render it null and void. If the contract is not disapproved within the attorney review period, you are bound by the contract as written. Therefore, it is important to contact an attorney immediately.
An attorney will advise you of your rights and recommend certain modifications to the contract that may be appropriate. If there are certain changes to be made to the contract, the contract is disapproved and the modifications provided to the other side for consideration. After all modifications have been considered and agreed upon by both sides, the attorneys issue a statement declaring that the attorney review has concluded, upon which time, the contract is now binding.
How to Hold Title
You may wish to consult an attorney or tax advisor on the best way to hold title. Different methods of holding title have different legal, estate and tax implications, especially when selling or upon death of the title holder.
Once your offer is accepted by the seller, you will need to have a licensed property inspector inspect the property within the time frame that was agreed upon in the effective contract to purchase. You may elect to have different inspectors inspect the property, if you wish to obtain professional opinions from inspectors who specialize in a specific area (eg. roof, HVAC, structure). We can recommend several different inspectors.
Depending on the outcome of these inspections, one of two things may happen:
Either each milestone is successfully closed and the contingencies will be removed, bringing you one step closer to the close, or
The buyer, after reviewing the property and the papers, requests a renegotiation of the terms of contract (usually the price).
Appraisal and Lending
It is imperative that you keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application and fund your loan. If the agreement is conditional upon financing, then the property will be appraised by a licensed appraiser to determine the value for the lending institution, via a third party. This is done so that the lending institution can confirm their investment in your property is accurate. Appraisers are specialists in determining the value of properties, based on a combination of square footage measurements, building costs, recent sales of comparable properties, operating income, etc. When you are within two weeks of closing, double check with your lender to be sure the loan will go through smoothly and on time.
If the property that you are purchasing is conditional upon an association approval, request the rules, regulations, and other important documents from the seller as soon as you have an effective agreement to purchase. Make sure that the application documents and processing fees are submitted to the appropriate person at the association by the required time. Fill out all of the information completely and legibly so there is no delay in processing the application. If you are required to meet with the association for your approval, make an appointment as soon as possible for the interview. Most associations require a certificate of approval before move-in. Your closing agent will request that the original copy of this approval letter be brought to the closing, so that it can be recorded with the deed in the county public records.
If you are obtaining a loan, you will be required by your lender to purchase a certain amount of insurance on the property. The value will depend on the lending institution and the purchase price of the property. You may be able to save hundreds of dollars a year on homeowners insurance by shopping around for insurance. You can also save money with these tips.
- Consider a higher deductibleIncreasing your deductible by just a few hundred dollars can make a big difference in your premium.
- Ask your insurance agent about discountsYou may be able get a lower premium if your home has safety features such as dead-bolt locks, smoke detectors, an alarm system, storm shutters or fire-retardant roofing materials. Persons over 55 years of age or long-term customers may also be offered discounts.
- Insure your house NOT the land under itAfter a disaster, the land is still there. If you do not subtract the value of the land when deciding how much homeowner’s insurance to buy, you will pay more than you should.