What a Buyer Needs to Know About the Homebuyer Process

This is a great paper provided by our Board of Realtors, I hope this is informative to anyone looking to purchase. Thanks

For a first time homebuyer the thought of making the leap to homeownership can be daunting. Whether you decide that new home construction or a resale home is the right choice for you, here are some tips to help you through the process

Connect with a lender
The home searching process will be easier if you are pre-qualified with a reputable lender. This will help narrow down the search based on what fits your budget. There are a variety of first- time borrower programs available. You’ll want to interview lenders to determine that they are familiar with the programs that will best benefit you. Not all lenders participate in all first-time
homebuyer programs so it may take some research. A REALTOR® can help in identifying a lender.

Finding a REALTOR®

Finding the right REALTOR® is equally as important as finding the right lender. You may start by asking for recommendations from friends who have had an exceptional experience with a REALTOR®. Even with a recommendation, you’ll want to make sure the REALTOR® is a good fit and understands your needs. Assisting the first-time homebuyer through the process takes
patience and a unique ability to communicate all the intricacies in layman’s terms.

Finding a home
Now that you have connected with a REALTOR® and are pre-qualified with a lender, the search begins for the home that meets your criteria. In today’s market, inventory is tight. With low inter- est rates and affordable prices, competition is high. First-time homebuyers in the sweet spot of
$150,000 – $250,000 are competing against investors with cash. Your REALTOR® will counsel you on structuring an offer that suits you and may be acceptable to the seller’s bottom line.

Making the offer
Once you find the house that meets your needs, being pre-qualified will enable you to react quickly with an offer. Many first-time homebuyers often misunderstand why a full price or close to full price offer is not acceptable to a seller. If your offer is full price, but asks the seller to pay closing costs, pay for inspections, or extraordinary repair costs, this all affects the sellers net and makes your offer less competitive than a slightly less than full-price offer with no condi- tions. Don’t be discouraged, it may take time and making offers on several properties before you are successful.

The offer is accepted, now what?
You and your REALTOR® are finally successful in locating the right home and getting an of- fer accepted. The work now begins in the background. An appraisal will be ordered by the lender. The appraisal provides the lender with a statement of valuation to ensure the
amount of the loan is not over the value of the property. Your REALTOR® can assist by providing the appraiser with known comparable sales in the neighborhood.

Inspections will be ordered which will include a pest inspection that must be clean in order for the loan to be processed. Other inspections may include a structural and/or well/septic
inspection. Your REALTOR® will review and advise you on the results of the reports.

One of the final steps before closing is your walk-through inspection. This is your opportuni- ty to verify that any agreed upon repairs have been completed. You’ll want to confirm that personal or real property that was included in the offer is in place (e.g. refrigerator or the dining room light fixture). You are also confirming that no damage has occurred since your first viewing of the property.

Close of escrow
You are near the finish line and the last step is the signing of documents at the title compa- ny. You will have been provided with a Good Faith Estimate on your costs to close the es- crow. This is the lenders estimate on costs associated with buying the property. Many of the closing costs (mortgage interest, sewer fees, property taxes) are pro-rated based on the date of closing. For this reason, the costs of closing will change each day the escrow is de- layed or accelerated. The lender’s Good Faith Estimate presented before closing provides a
good rule of thumb of costs to close the escrow. Your REALTOR® should accompany you to the closing and the escrow officer will explain the numerous documents you will be signing.

After the signing, the documents will be recorded and you can begin living the dream of homeownership.

Information on the home buying process, consult your REALTOR® or go to www.rsar.net.