The Home Buying Adventure: 

Yes, it is an adventure with its share of excitement, intrigue, mystery, and drama.  For most first time “adventurers”, a guide is invaluable.  Real estate agents are just that: guides who walk you through the process from the beginning to the settlement table.

In a nutshell, here are the steps involved in the process:

1.  You realize a need or desire to own a home.

2.  You talk to an agent – to evaluate needs and to explain the process.  Decide on an agent who will represent you –a Buyers Agent.  (You will need to sign a Business Relationship Agreement.)

3.  You talk to a loan officer – to evaluate how much of a loan you qualify for and what financial options are available.  It’s best to start the pre-approval process first thing so that you will have an edge over other less prepared customers competing for the same homes.

4.  With your agent, you tour homes that meet your criteria until you decide on the one you want.  Your agent can get information on any home that is for sale, no matter what company has it listed.  If you attend a Sunday Open House without your agent, tell the agent in the home your agent’s name or give one of your agent’s business cards.

5.  You put together an offer (an agreement of sale) with your agent.  An earnest money deposit payable to the listing agency is included with the offer (agreement) to demonstrate to the Seller your sincerity.  This amount is generally up to 1% of the asking price of the home.  The remainder of your earnest money amount is due at the listing office within the time chosen on the agreement of sale.  These two deposits will be credited toward the down payment at the settlement table.  The total of the down payment amount depends on the mortgage type for which you are applying.

6.  Your agent presents your offer to the listing agent of the home you chose.

7.  The listing agent makes the presentation of your offer to the Seller.

8.  Negotiations go on, through counter offers, until both sides agree upon all items on the agreement.

9.  Sellers and Buyers must sign, initial and date all written changes on the contract and deliver to both parties.  At this time your offer becomes an executed agreement of sale.

10.  You apply for a mortgage right away.  If you have already met with a Loan Officer for pre-approval, he/she will now need a copy of the executed agreement of sale.  It is recommended that you have a mortgage pre-approval, but it is not mandatory that you use the same company for your actual mortgage.  There will be duplicated charges and paperwork done by both companies if you chose another.

11.  Your agent, the conveyancer, and the Title Company you choose begin their tasks, such as ordering the title, tax certifications, mortgage payoffs and conducting any other research regarding the property which you are purchasing.

12.  You deliver your second earnest deposit check, made out to the listing office, to your agent by the deadline and for the amount agreed upon.  DEADLINES ARE VERY IMPORTANT.

13.  Inspections, selected by you on the agreement, must be completed and reported within the time frame agreed upon.  Termite, Radon, Lead, Home Inspection, Well Water, Septic, etc.  DEADLINES ARE VERY IMPORTANT.  Payments for most inspections are due at the time of inspection.

14.  Negotiate with the Seller the repair of any items that were found during the inspections within the deadline timeframe.

15.  Your mortgage company will schedule a required appraisal of the property before the mortgage commitment can be given.

16.  You will need to get hazard (homeowners) insurance for your new home.  A rider will be given to you by the company you select.  The original rider will need to be presented at the settlement table for the closing to take place.

17.  When the title is done, all inspections are satisfied or certified, the mortgage is committed, the payoffs are ordered, a Use and Occupancy certificate is issued, and the other terms of the agreement are satisfied, the settlement time is scheduled.  Settlement is usually at your agent’s office or at the office of your Title Company.  You, the buyer, can decide the settlement time, considering the Seller’s needs, the availability of a closing room space and the Title Clerk’s schedule.

18.  24 hours or sooner before settlement, you will order all the utilities for your new home; the phone, cable tv, electric, water, and sewer, change of address at the post office, etc.  Your agent will help get all the information for you.

19.  Within a week of settlement, the Title Company and your agent will give you an estimate of closing costs.  You will bring a certified check, made out to the Title Company, for the estimated amount, to the closing.  It is recommended that you bring your checkbook also to settlement.

20.  Before closing, you and your agent tour the now vacant home for one last inspection, checking for “new owner” readiness.  At this time you will confirm that all projects that were to be completed by the seller are done as agreed.

21.  Assuming everything goes well at the walk-through, settlement should go very smoothly.  There will be lots of papers for you to sign, money exchanging hands, and a whirlwind of professionals conducting business on your behalf.  Your agent will be with you to explain any questions you may have.  You will be given a settlement notice a few weeks earlier reminding you of the items you need to bring to settlement.

22.  You receive your keys to your new home, a set of all the papers from closing, and the best wishes from everyone present.